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2023 (3) TMI 1188 - AT - Income TaxRevision u/s 263 - Income from house property - deemed rent on un-sold flats - as per CIT assessment order as erroneous as well as prejudicial to the revenue and directing the AO to make fresh assessment by taxing the annual value of the property forming part of the closing stock, under the head “Income from House Property” - annual value shall be computed as per the provision of section 23(1)(a) of the Act and deduction if any admissible u/s 24 of the Act shall be allowed while computing the income from house property - HELD THAT:- AO had carried out investigation into the flats including that of unsold flats which was held as stock in trade by the assessee. Moreover it is noted that the assessee was not into the business of letting out the property for rent and its business was Real Estate Development as well as re-development. And we also note that the AO had framed the assessment order on 24.04.2019, and so it can be seen that the AO’s decision on this issue, not to tax the deemed rent on un-sold flats was after the Parliament has inserted sub-section (5) in Section 23 of the Act vide Finance Act 2017, w.e.f 01.04.2018, ie., from AY. 2018-19. Since CBDT Circular/Instruction are binding on AO and Income Tax Authorities, the AO can be presumed to have taken note of CBDT classification dated 15.02.2018, while framing assessment order on 24.04.2019. Therefore, AO has rightly followed the CBDT Circular (supra) and did not determine the notional income from unsold flats held by assessee as stock-in-trade. AO has discharged his dual role as an investigator as well as adjudicator. As noted he has examined the relevant facts of unsold flats as well as decision not to determine ALV is in line with the CBDT Circular dated 15.02.2018 and therefore his decision cannot be held to be erroneous as well as prejudicial to the revenue. Therefore, we find the Ld. PCIT has erred in invoking revisional jurisdiction u/s 263 of the Act, only for imposing his view, which is not permissible; and so we are inclined to quash the impugned order of Ld. PCIT. Decided in favour of assessee.
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