TMI Blog2019 (1) TMI 1879X X X X Extracts X X X X X X X X Extracts X X X X ..... from house property was not justified insofar as these flats were neither given on rent nor the assessee has intention to earn rent by letting out the flats. The flats not sold was its stock-in-trade 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. Accordingly, the AO is directed to delete the addition made by estimating letting value of the flats u/s 23 of the I.T. Act. The aforesaid observation of our coordinate Bench squarely applies to the facts of the present case. We find that Sec. 23(5) of the Act has been inserted by the Finance Act, 2017 w.e.f. 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The captioned appeal by the assessee is directed against the order of CIT(A)-33, Mumbai dated 16.10.2017, pertaining to the Assessment Year 2012-13, which in turn has arisen from the order dated 30.03.2015 passed by the Assessing Officer, Mumbai under section 143(3) of the Income Tax Act, 1961 (in short the Act ). 2. Although assessee has raised multiple Grounds of appeal, but in sum and substance the solitary grievance is against an addition of ₹ 18,50,176/- sustained by the CIT(A) under the head Income from House Property representing Annual Letting Value of unsold flat. 3. Briefly put, the relevant facts are that the appellant is an individual who is, inter-alia, engaged in the business of real estate developers and build ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal in the case of C.R. Developments Pvt. Ltd. vs JCIT, 44 CCH 835 (Mum. Trib.) and M/s. Runwal Constructions Anr. vs ACIT, ITA Nos. 5408 5409/Mum/2016 dated 22.02.2018. The learned representative pointed out that the CIT(A) erroneously rejected the plea of the assessee by relying on the judgment of the Hon'ble Bombay High Court in the case of CIT vs Sane Doshi Enterprises, 377 ITR 0165 (Bom.) wherein the issues were altogether different. 5. On the other hand, the ld. DR has defended the decision of the lower authorities by placing reliance on the same. 6. We have carefully considered the rival submissions. The short point involved in this appeal is the validity of addition sustained by the CIT(A) on account of notional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing value of the flats u/s 23 of the I.T. Act. 7. In our view, the aforesaid observation of our coordinate Bench squarely applies to the facts of the present case. In the case of M/s. Runwal Constructions (supra) also, similar issue has been dealt with by our coordinate Bench. In the case of M/s. Runwal Constructions (supra), the Bench noted the judgment of the Hon'ble Gujarat High Court in the case of CIT vs Neha Builders Pvt. Ltd., 296 ITR 661 (Guj.) as also the judgment of the Hon'ble Delhi High Court in the case of Ansal Housing Finance Leasing Co. Ltd., 354 ITR 180 (Delhi) and finally observed as under :- 10. In the case on hand before us it is an undisputed fact that both assessees have treated the unsold flats as st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al income thereof. Thus, the ratio of the judgment of the Hon'ble Bombay High Court in the case of Sane Doshi Enterprises (supra) has been rendered in the context of qualitatively different facts, and is not applicable in the present case. 9. Apart therefrom, we find that Sec. 23(5) of the Act has been inserted by the Finance Act, 2017 w.e.f. 01.04.2018. In terms of the said section, it is prescribed that where the property consisting of any building or land appurtenant thereto is held as stock-in-trade and the property or any part of the property is not let during the whole or any part of the previous year, the annual value of such property or part of the property, for the period up to one year from the end of the financial year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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