TMI Blog2020 (11) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... s backed by the factum of ownership, and the aspect, that as to whether the assessee carried on a business or held the property as a landlord would have no bearing on determination of the ALV. A.R had tried to support the order of the A.O, on the ground, that the view of the A.O that the ALV of the property held by the assessee as stock-in-trade was not liable to be brought to tax under the head house property was supported by certain orders of the coordinate benches of the Tribunal. Claim of the ld. A.R, that the A.O while framing the assessment had deliberated upon the aforesaid aspect and had arrived at a possible view is concerned, we are afraid that the same does not find favour with us. Perusal of the respective queries that were raised by the A.O vide his letter dated 03.05.2016 and the reply filed by the assessee vide his letter dated 12.09.2016, reveals beyond any scope of doubt that the same pertained to the issue as regards the valuation of opening and closing WIP of the assessee s project and determination of the cost of sale of the same. We are unable to comprehend as to on what basis it is canvassed by the ld. A.R that the A.O while framing the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id and was unjustified. 2. The Hon. Pr.CIT erred in setting aside to the f ile of the assessing off icer the assessment framed u/s 143(3) of the I. Tax Act, 1961 on 07.12.2016, holding that as the ld. AO had not taken into consideration the ALV method on the unsold flats held as closing stock by the appellant firm to derive house property income, the order u/s 143(3) on 07.12.2016 was erroneous in so far as it is prejudicial to be interest of revenue. 3. The appellant craves leave to add, alter, amend and/or vary any of the grounds at any time before the decision of the appeal. 2. Briefly stated, the assessee firm which is engaged in the business of a builder and developer had filed its return of income for A.Y. 2014-15 on 05.11.2014, declaring its total income at ₹ 1,06,91,500/-.Original assessment under Sec.143(3) was framed on 07.12.2016, wherein the income of the assessee firm was assessed at its returned income of ₹ 1,06,91,500/-. After the culmination of the assessment proceedings the Pr.CIT in exercise of the powers vested with him u/s 263 of the Act called for the assessment records of the assessee. Observing, that the A.O while framing the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order passed by the Pr.CIT under Sec. 263, dated 19.03.2019 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 present appeal involved a delay of 20 days. It was submitted by the ld. A.R that the aforesaid delay had occasioned, for the reason, that the old residential house of one of the partner of the assessee firm where the order of the Pr.CIT under Sec. 263 was stated to have been served, during the relevant period, was locked, as the partner who owned the said house had shifted his residence. As such, it was the claim of the ld. A.R that due to the aforesaid circumstances the impugned order of the Pr.CIT under Sec.263 of the Act was not delivered to the assessee firm and had remained unattended. It was further submitted by the ld. A.R, that it was only when the assessee firm received a notice dated 29.05.2019 from the ACIT, Circle 32(3), Mumbai, with regard to the set aside assessment, that, it was only then that the assessee firm on the basis of inquiries learnt about the order passed by the Pr.CIT under Sec. 263 of the Act. In order to for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards the unsold flats held by the assessee as its closing stock was duly queried and deliberated upon by the A.O while framing the assessment. Accordingly, it was submitted by the ld. A.R that now when the A.O had after calling for the requisite details formed a possible view that the ALV of the aforesaid property was not liable to be brought to tax under the head house property , therefore, the Pr.CIT had exceeded his jurisdiction by revising the assessment order with a purpose to substitute his view as against that arrived at by the A.O. Further, it was submitted by the ld. A.R that the law did not prescribe any method for determination of ALV of property held by an assessee as its closing stock. It was submitted by the ld. A.R that sub-section (5) to Section 23 of the Act, which therein mandates determination of the ALV of a property held by an assessee as stock-in-trade had been made available on the statute vide the Finance Act, 2017, w.e.f 01.04.2018, and was thus not applicable to the year under consideration. Insofar the judgment of the Hon ble High Court of Delhi in the case of Ansal Housing Finance Leading Co. Ltd. (supra) as was relied upon by the Pr.CIT, it was submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed into service by them. Admittedly, the assessee firm which is engaged in the business of a builder and developer was holding unsold flats (valuing ₹ 10,05,08,511/-) as part of its inventory of stock-in-trade during the year under consideration. As observed by us hereinabove, the Pr.CIT was of the view that the failure on the part of the A.O in not taking cognizance of the fact that the ALV of the unsold flats held by the assessee as closing stock of its business as that of a builder and developer was not offered by it for tax under the head house property , had thus, rendered his order erroneous insofar it was prejudicial to the interest of the revenue in terms of Explanation 2 to Sec.263 of the Act. On the basis of his aforesaid observation the Pr. CIT by relying on the judgment of the Hon ble High Court of Delhi in the case of Ansal Housing Finance Leasing Co. Ltd. Vs. CIT (2012) 354 ITR 1820 (Del) , had concluded, that incidence of charge of ALV of a property was backed by the factum of ownership, and the aspect, that as to whether the assessee carried on a business or held the property as a landlord would have no bearing on determination of the ALV. On the ot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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