TMI Blog2022 (11) TMI 1287X X X X Extracts X X X X X X X X Extracts X X X X ..... nnual value of the property held as stock in trade is sought to be brought to tax. The said amendment is only prospective in application. PCIT in his third show cause notice had sought to consider the taxability of deemed rental income not u/s 23(5) but u/s 23(1)(a) - Assessee had duly submitted that rental income has been correctly offered in return of income - PCIT has not brought with cogent evidence on record as to how the submission made by the assessee is incorrect. All facts submission with regard to offer of rental income is already on record before the Ld. PCIT. Nothing prevented the Ld. PCIT to just verify those facts which are staring on him, before invoking his revisionary jurisdiction u/s 263 A.O. is neither erroneous n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had not declared the deeming rent U/s 23 in total income during filing of the return. The Ld. PCIT sought to consider deemed rent @ 8% of Rs. 3,52,49,944/- on closing stock of flats which worked out to Rs. 28,19,995/-. According to Ld. PCIT to Ld. AO did not take cognizance on this issue in the order U/s 143(3) of the Act. Accordingly, the order of the ld. AO was set aside by the ld. PCIT treating it as erroneous prejudicial to the interest of revenue. Being aggrieved, the assessee filed an appeal before us. 3. The learned counsel filed a paper book which is containing from page no. 1 to 32 which is kept in record. The learned counsel first pointed out that the Ld. PCIT issued notice for hearing on 04.03.2022 and calculated the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o consider rental income addition accordingly. The assessee had further rebutted the said notice and filed an explanation on 22.03.2022 by written submission and further informed that the rental income was declared in the return of income and submitted that rental income has become correctly offered on closing stock and interest as per the Act. 3.2 The learned counsel further argued that the order passed by the ld. A.O. is not erroneous and not prejudicial to the interest of the Revenue. The learned counsel further mentioned in para -10 of the order U/s 263 which is extracted as below:- 10. As while making the assessment ills 143(3) for the Assessment Year 2017-18 (Assessment order dated 16.12.2019) the AO has failed to tax the ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Ld. PCIT was changing time to time after receiving reply of the assessee. We may also like to add here that section 23(5) of the Act has been inserted by the Finance Act, 2017 w.e.f. 01.04.2018 whereby notional annual value of the property held as stock in trade is sought to be brought to tax. The said amendment is only prospective in application. The Ld. PCIT in his third show cause notice had sought to consider the taxability of deemed rental income not u/s 23(5) but u/s 23(1)(a) of the Act. The assessee had duly submitted that rental income has been correctly offered in return of income amounting to Rs. 68,70,528/-. The Ld. PCIT has not brought with cogent evidence on record as to how the submission made by the assessee is incorrec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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