TMI Blog2015 (5) TMI 1161X X X X Extracts X X X X X X X X Extracts X X X X ..... and income arising on its sale is liable to be taxed as business income. No justification in the order of AO for estimating rental income from these vacant flats u/s.23 which is assessee s stock in trade as at the end of the year. AO is directed to delete the addition made by estimating letting value of the flats u/s.23. Claim of deduction u/s.54EC - Held that:- The assessee is also aggrieved for restricting the claim of deduction u/s.54EC to ₹ 50 lakhs as against ₹ 1 crore claimed by the assessee. From the record we found that the assessee has shown long term capital gain of ₹ 40,15,660/- on sale of equity shares of India Finance . Construction Co. Pvt. Ltd. after availing deduction u/s.54EC amounting to ₹ 1,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r disallowing claim of deduction u/s.54EC. - Decided in favour of assessee - ITA No.4277/Mum/2012 - - - Dated:- 13-5-2015 - SHRI R.C.SHARMA, AM AND SHRI SANJAY GARG, JM For The Assessee : Shri S.M.Bandi For The Revenue : Shri Asghar Zain VP ORDER PER R.C.SHARMA (A.M): This is an appeal filed by the assessee against the order of CIT(A)-16, Mumbai, dated 31-5-2012 for the assessment year 2009-10 in the matter of order passed u/s.143 of the I.T.Act, on the following grounds :- 1. The Learned CIT(A) has grossly erred in law as well as on facts in confirming the action of AO in charging notional Income as Income from House Property in respect of the 3(three) unsold shops shown as Stock-in-trade. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision as regards to the rateable value has also been recently decided by the Hon'ble Delhi High Court in the case of Moni Kumar Subba reported in (2011) 333 ITR 38 has held that operative words in s. 23(1)(a) are lithe sum for which the property might reasonably be expected to let from year to year. Having regard to the provision, the AO is expected to make an enquiry as to what would be the possible rent that the property might fetch. If he finds that the actual rent received is less than the fair rent for the reason that the assessee has received abnormally high interest-free security deposit, he can undertake necessary exercise in that behalf- However, by no stretch of imagination, the notional interest on interest-free security ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 180 (Delhi) in support of the proposition that even in respect of unsold flats by the developer is liable to be taxed as income from house property. 5. We have considered rival contentions and perused the record. The issue under consideration has been restored by the CIT(A) to the file of AO to compute the annual value. Recently the Hon ble Supreme Court in the case of M/s Chennai Properties Investments Ltd. Vs. CIT, reported in (2015) 42 SCD 651, vide judgment dated 9-4-2015 has held that where assessee company engaged in the activity of letting out properties and the rental income received was shown as business income, the action of AO treating the rental income as income from house property in place of income from business show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gain of ₹ 40,15,660/- on sale of equity shares of India Finance . Construction Co. Pvt. Ltd. after availing deduction u/s.54EC amounting to ₹ 1,00,00,000/-. The.AO noted that assessee company sold equity shares of India Finance Construction Co. Pvt. Ltd on 31.03.2009 and earned long term capital gains of ₹ 1,40,15,680/- on which assessee has claimed deduction of ₹ 1,00,00,000/- u/s. 54EC and declared LTCG at ₹ 40,15,660/-. The AO also noted that proviso to sub-section (1) of section 54EC of the Act wherein the Legislature has prescribed limit of ₹ 50 lakhs for the purpose of deduction under that section by the Finance Act, 2007 which is effective from 01.04.2007. The assessee had invested ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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