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2017 (10) TMI 1603 - AT - Income TaxIncome from house property - Annual value determination - Any distinction between a house property used for residential purposes or not ? - whether a house property owned by the assessee, held for being either sold, as in the case of residential flats at Victoria Towers, or for being let, as in the case of the shopping complex, is liable to be assessed as income from house property u/s. 22? - HELD THAT:- As apparent from the clear reading of the relevant provisions, and which again represent trite law, the actual letting of the house property is not a condition for income thereof to be assessable as income from house property u/s. 22. As afore-noted, it is the ownership of the house property per se which is the source of income, and not the fact whether the same is occupied by the assessee only or someone else – at a consideration (viz. a tenant) or otherwise. In that sense, it is the income potential of the house property that is subject to tax. The only exception, covered by the provision itself, is where the property is occupied by the owner for the purpose of his business or profession. Fiscal statutes, it is again trite law, have to be strictly construed. What all is therefore relevant, and the only caveat, is that the annual value assessed should capture the fair rental value of the property, qua which we observe no dispute in the present case; the AO having adopted the same on the basis of reliable data. We, therefore, find no legal infirmity in the Revenue assessing the fair rental value of the, since completed, unsold residential flats at Victoria Towers to tax as income from house property u/s. 22. In fact, sec. 23(5) stands inserted by Finance Act, 2017 (w.e.f. 01.04.2018), specifically providing that the annual value of a house property held as stock-in-trade of his business by the assessee shall be taken at nil for a period of one year from the end of the year in which a completion certificate is obtained in its respect. Further endorsing, if it was necessary, that the annual value of a house property held as stock-in-trade is equally assessable u/s. 22, i.e., irrespective of whether the same is actually let or not. The same, it needs to be appreciated, is not in occupation of the owner, much less for the purposes of his business, but represents the inventory of his trade, to be sold or even let. Coming to the rental value, based on factual letting or otherwise, of the unsold shops at the shopping complex ‘Corromandel Plaza’. The Revenue has already assessed the rental (annual) income of these shops, being regularly let, as a part of the assessee’s business income u/s. 28. Where, then, we may ask, is the question of the Revenue, contradicting its’ own stand, seeking an assessment of the lettable value or the rent received as income from house property u/s. 22? Where it considers the AO’s stand as untenable in law, the only course available to it in law is the revision of his order u/s. 263. The claim for additional depreciation on plant and machinery and car park facility (so that it is not regarded by the assessee as part of the building) has not, as afore-noted, been adjudicated by the ld. CIT(A) per the impugned order, so that the matter shall have to necessarily travel to his file for adjudication after hearing the parties, i.e., in accordance with law, per a speaking order.
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