Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (2) TMI 1587 - AT - Income TaxIncome from house property - annual letting value (ALV) of the unsold units of properties lying as stock in trade - taxing hypothetical income - source of income - deemed income - AO computed deemed rental income u/s.23 and added it to the assessee’s total income - levy of income tax in respect of properties held by the assessee as an owner even if the same have been held as stock in trade - HELD THAT:- It is no doubt true that section 23 deems the determination of income from house property, which is not let out, but it is equally trite that a deeming provision cannot be extended beyond its ambit, so as to cover the heads of income or the sections, to which it does not operate. No attention has not been drawn by the DR towards any specific provision under Chapter IV-D of the Act which deems rental income on the properties held as stock in trade, waiting for sale and not actually let out, as chargeable to tax under the head “Profit and gains of business or profession”. As the assessee admittedly did not earn any rental income from letting out of these two units, which position has also not been disputed by the AO, taxing any hypothetical income, which is otherwise not sanctioned by any provision under Chapter IV-D, cannot be permitted. Even otherwise, section 5 of the Act clearly stipulates that a person who is a resident can be subjected to tax in respect of income from whatever source which is received or is deemed to be received in India or accrues or arises or deemed to accrue or arise to him in or outside India during such year. As the instant imaginary income charged to tax by the AO is neither a deemed income under the head ‘Business income’ nor is received or deemed to be received or accruing or arising or deemed to accrue or arise, not falling in any of the categories given in clauses (a) to (c) of section 5(1) - there is no rationale in charging it to tax. - additions to be deleted - decided in favour of assessee.
|