TMI Blog2018 (12) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Respondent : Shri V.Vidhyadhar, D.R ORDER PER RAVISH SOOD, JM The present appeal filed by the assessee is directed against the order passed by the CIT(A)-51, Mumbai, dated 20.03.2017, which in turn arises from the order passed by the A.O under Sec.143(3) of the Income Tax Act, 1961 (for short Act ), dated 31.03.2015. The assessee assailing the order of the CIT(A) has raised before us the following grounds of appeal: 1. The learned Commissioner of Income Tax (Appeals) erred in confirming the action of the Assessing Officer computing deemed income under the head Income f rom House Property in respect of unsold f lats in the project. 2. The learned Commissioner of Income Tax (Appeals) erred in holding that deemed income from House Property is to be computed u/s 22 even when these are unsold flats lying as stock-in-trade of completed projects. 3. The learned Commissioner of Income Tax (Appeals) erred in confirming the Gross Annual Value of ₹ 4,51,29,000/- in respect of unsold flats of total area 75,215 sq. Feet in the project RNA Mirage at Worli, Mumbai at the rate of ₹ 50 per sq. feet per month. 4. The learned Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee carried the matter in appeal before the CIT(A). The CIT(A) after deliberating at length on the contentions advanced by the assessee was however not persuaded to subscribe to the same. It was observed by the CIT(A) that the A.O had rightly assessed the deemed income of the unsold flats in possession of the assessee as per the provisions of Sec. 22 and Sec. 23 of the Act. Further, it was observed by the CIT(A) that the assessee had also not objected to the working of the ALV and computation of its income from house property by the A.O. In the backdrop of his aforesaid observations the CIT(A) dismissed the appeal. 5. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The ld. Authorized Representative (for short A.R ) for the assessee at the very outset of the hearing of the appeal submitted that the lower authorities had erred in determining the notional lettable value of the unsold flats held by the assessee developer as stock-in-trade and had wrongly brought the same to tax under the head Income from house property . In support of his aforesaid contention the ld. A.R placed heavy reliance on the judgment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Delhi in CIT Vs. Ansal Housing Finance Leasing Company Ltd. (2013) 354 ITR 180 (Delhi) wherein it was observed by the High Court that the unsold flats held as stock-in-trade by the assessee were liable to be taxed as its income from house property, it was submitted by the ld. A.R that the aforesaid judgment of the Hon ble High Court of Delhi was deliberated upon by the ITAT in the case of M/s Haware Construction Pvt. Ltd. (supra). It was submitted by the ld. A.R that the Tribunal in the aforesaid case by taking support of the judgment of the Hon ble Supreme Court in the case of CIT Vs. Vegetable Products Ltd. (1973) 88 ITR 192 (S.C) had concluded that as the judgment of the Hon ble High Court of Gujarat in the case of Neha Builders Pvt. Ltd. (supra) was in favour of the assessee, therefore, the same was to be preferred as against that of the Hon ble High Court of Delhi in the case of Ansal Housing Finance Leasing Company Ltd.(supra). The ld. A.R further relied on a host of certain other orders of the coordinate benches of the Tribunal. 6. Per contra, the ld. Departmental Representative (for short D.R ) relied on the orders of the lower authorities. The ld. D.R relying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08) 296 ITR 661 (Guj). The Hon ble High Court while disposing off the appeal filed by the revenue in the case of an assessee company which was engaged in the business of construction of property, had observed that where a property is held as stock-in-trade, then the same would become or partake the character of the stock, and any income derived therefrom would be income from business and cannot be held as income from property. The Hon ble High Court while concluding as hereinabove had observed as under: 7. From the order passed by the learned CIT(A), it would clearly appear that the case of the assessee was that the company was incorporated with the main object of purchase, take on lease, or acquire by sale, or let out the buildings constructed by the assessee. Development of land or property would also be one of the businesses for which the company was incorporated. 8. True it is, that income derived from the property would always be termed as income from the property, but if the property is used as stock-in-trade , then the said property would become or partake the character of the stock, and any income derived from the stock, would be income from the business, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Haware Construction Pvt. Ltd. [ITA no. 3321 3172/Mum/2016; dated 31.08.2018] had after deliberating on the aforesaid judgments of the Hon ble High Court of Gujarat in Neha Builders (P) Ltd.(supra) and that of the Hon ble High Court of Delhi in Ansal Housing Finance Leasing Company Ltd.(supra), had by taking support of the judgment of the Hon ble Supreme Court in the case of CIT Vs. Vegetable Products Ltd. (1973) 88 ITR 192 (SC), had followed the decision of the Hon ble High Court of Gujarat in Neha Builders (P) Ltd. (supra), and had concluded that the notional lettable value of the unsold flats held by the assessee cannot be determined and brought to tax under the head Income from house property . Still further, a similar view had also been taken by the Tribunal in the case of M/s C.R Development Pvt. Ltd. Vs. JCIT-8(1)(OSD), Mumbai [ITA No. 4277/ Mum/2012; dated 13.05.2015]. It was observed by the Tribunal that estimating of the rental income of the flats held by the assesses as stock-in-trade was not justified, as the said flats were neither given on rent nor the assessee had any intention to earn rent by letting out the same. We further find that another coordinate benc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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