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2024 (1) TMI 742 - AT - Income TaxDeemed income from house property - Addition made by the AO being the estimated ALV on unsold stock @ 8.5% after deducting 30%, as income from house property - CIT(A) deleted addition - HELD THAT:- With the insertion of section 23(5) of the Act by Finance Act, 2017 w.e.f. 01.04.2018 it becomes clear that computing of annual value of property held in stock in trade certain moratorium period has been given for such treatment, however, newly inserted provisions contained under section 23(5) of the Act are to be applicable w.e.f. A.Y. 2018-19 and not to the case at hand. So the Ld. CIT(A) has rightly decided that the assessee is not entitled for taking benefit of the amended provisions contained under section 23(5) of the Act. However, the issue in question has already been decided in favour of the assessee by the co-ordinate Benches of the Tribunal in case of Bengal Shapoorji Housing Development Pvt. Ltd. [2021 (5) TMI 636 - ITAT MUMBAI] and Sheth Developers Pvt. Ltd [2022 (6) TMI 1271 - ITAT MUMBAI] by holding that “deemed notional rental income with regard to unsold flats held as stock in trade cannot be taxed. The co-ordinate Bench of the Tribunal in case of Pegasus Properties Pvt. Ltd [2021 (12) TMI 1210 - ITAT MUMBAI] by considering the decision rendered by the Hon’ble Delhi High Court in case of Ansal Housing Finance & Leasing Co. Pvt. Ltd. [2012 (11) TMI 323 - DELHI HIGH COURT] held that such addition is not sustainable up to 2017-18. Thus we are of the considered view that the Ld. CIT(A) has rightly deleted the addition made by the AO on account of deemed rental income qua the unsold stock of flats held in stock in stock in trade up to A.Y 2017-18. Addition u/s 43CA being the excess value of the fair market value than the sale consideration value taken by the assessee - difference of 1.67% in the sale consideration vis-à-vis stamp duty valuation - HELD THAT:- The co-ordinate Bench of the Tribunal in case of Sai Bhargavanath Infra [2022 (8) TMI 799 - ITAT PUNE] held that first proviso to section 43CA inserted by Finance Act, 2020 with effect from 01.04.2021 is applicable retrospectively and thus where difference recorded between sale value of flats sold by assessee and stamp value of such flats was within 10% margin, no addition to be made. In the instant case the difference between the sale value and stamp value is 1.67% and as such within the threshold limit of 10%, so following the order passed in case of Sai Bhargavanath Infra [2022 (8) TMI 799 - ITAT PUNE] we are of the considered view that the Ld. CIT(A) has erred in confirming this addition which is ordered to be deleted. So ground No.1 raised by the assessee in its cross objections is hereby allowed.
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