TMI Blog2019 (3) TMI 1656X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent by : Shri Abirama Karthikeyan, DR ORDER Mahavir Singh, These appeals filed by the assessee are arising out of the orders of Commissioner of Income Tax (Appeals)-51, Mumbai [in short CIT(A)], Appeal No. CIT(A)-51/IT-312 280/2016-17 even dated 05.09.2017. The Assessments were framed by the Dy. Commissioner of Income Tax, Circle-3(3) Mumbai (in short DCIT/ITO/ AO ) for the A.Ys. 2013-14 2014-15 vide order dated 29.03.2016 24.11.2016 under section 143(3) of the Income Tax Act, 1961 (hereinafter the Act ). 2. The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in computing the deemed rental income under section 22 of the Act under the head of income from house property even when these unsold flat lying as stock in trade in completed project. For this assessee has raised the identically worded grounds in both the years except the quantum. The facts and grounds, we will take up from the assessment year 2013-14. The grounds raised in AY 201314 reads as under: - 1. The learned Commissioner of Income Tax (Appeals) erred in confirming the action of the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken that there are two different views of High Courts namely Hon ble High Court of Gujarat in the case of CIT vs. Neha Builders P. Ltd. (2008) 296 ITR 661 (Guj) has held that the property hold as stock in trade becomes or partake character of the stock and no income derived therefrom, whatever, income from business cannot be held as income from house property. Similarly, the opposite view is taken by Hon ble Delhi High Court in the case of CIT v. Ansal Housing and Construction Ltd (2013)354 ITR 180 (Del). The learned Counsel for the assessee stated that the Tribunal particularly in the case of Chamber Construction Pvt. Ltd. vs. DCIT in ITA No. 4418/Mum/2017 vide order dated 30.11.2018 (in assessee s own case for AY 2012-13) has considered this issue vide Para 7 to 10 as under: - 7. We have heard the authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record. We find that our indulgence has been sought by the assessee by preferring the present appeal, for adjudicating as to whether the CIT(A) is right in law and facts of the case in concluding that the deemed notional lettable value of the completed un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 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, and not income from the property. If the business of the assessee is to construct the property and sell it or to construct and let out the same, then that would be the business‟ and the business stocks, which may include movable and immovable, would be taken to be stockin-trade‟, and any income derived from such stocks cannot be termed as income from property‟. Even otherwise, it is to be seen that there was distinction between the income from business‟ and income from property‟ on one side, and 'any income from other sources'. The Tribunal, in our considered opinion, was absolute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 bench of the Tribunal i.e. ITAT, Mumbai Bench G , Mumbai in ITO-2(1)(1), Mumbai Vs. M/s Arihant Estates Pvt. Ltd. [ITA No. 6037/Mum/2016; dated 27.06.2018] had relied on an earlier view taken by the Tribunal in the case of M/s Runwal Constructions Vs. ACIT in [ITA No. 5408 5409/Mum/2016; dated 22.02.2018], and after deliberating on the judgment of the Hon ble High Court of Gujarat in CIT Vs. Neha Builders Pvt. Ltd. (2008) 296 ITR 661 (Guj) and that of the Hon ble High Court of Delhi in Ansal Housing Finance Leasing Company Ltd. (2013) 354 ITR 186 (Del) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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