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2023 (11) TMI 540 - AT - Income TaxRevision u/s 263 - Deemed rent - ALV of the unsold stock (held as stock in trade) farming part of the inventory - PCIT has taken the view that since this project has been developed on ownership basis assessee company was owner of the property till it is sold and the annual letting value (ALV) of the unsold stock (held as stock in trade) farming part of the inventory should have been brought to tax as deemed rent under section 23(1)(a) whereas the assessee has neither offered deemed rent of unsold flats nor the AO brought the same to tax - HELD THAT:- AO has duly conducted the investigation by examining the detail facts regarding the unsold flats which was held as stock in trade by not determining ALV by following the guidelines given in the CBDT circular No.2/2018 dated 15.02.2018. Moreover Hon'ble Supreme Court in case of Chennai Properties & Investments Ltd. vs CIT [2015 (5) TMI 46 - SUPREME COURT] held that unsold flats which are in stock in trade should be assessed under the head "business income" and there is no justification in estimating the rental value from those flats and notionally computing annual letting value under section 263 of the Act. Therefore invoking the jurisdiction u/s 263 by Ld. PCIT is not sustainable in the eyes of law, hence impugned order passed under section 263 is ordered to be set aside. Appeal filed by the assessee is allowed.
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