TMI Blog2019 (3) TMI 2007X X X X Extracts X X X X X X X X Extracts X X X X ..... an amendment has been made by the Finance Act in sub-section (5) of section 23 of the act w.e.f. 01-04-2018. This amendment is not applicable for the year under consideration. With the assistance of ld. representatives, we have gone through the decision CIT vs. Neha Builder Pvt. Ltd. [ 2006 (8) TMI 105 - GUJARAT HIGH COURT] wherein it is held that if property is used as stock in trade, then, such property would become or partake character of stock and any income derived from stock would be income from business and not income from property. We have also gone through the judgment in the case of ACIT vs. Haware Construction Pvt. Ltd. [ 2018 (10) TMI 1523 - ITAT MUMBAI] As in the case of Neha Builder Pvt. Ltd [ 2006 (8) TMI 105 - GUJARAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(2) of the act on 4th Sep, 2014. The nature of business of the assesse is builder and developer of property. During the course of assessment on verification of the details filed, the assessing officer noticed that assessee has shown in the balance sheet unsold finished property having total square ft. of 174109 and value of this property was shown at Rs. 33,34,51,476/-. The assessing officer observed that assessee has not declared any income from the aforesaid property u/s. 23 of the act. Therefore, assessee was asked to furnish the working of annual letting Value (ALV) of the aforesaid unsold property and also to explain why the ALV of the unsold property should not be taxed u/s. 23 of the act. The assessee has not agreed for chargeabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn as closing stock. He has vehemently contended that the aforesaid property was held as stock in trade and any income derived from stock shall be taxable as business income. The ld. counsel has also placed reliance on the following judicial pronouncements:- (i) Chennai Properties and Investment Ltd. vs. CIT 373 ITR 673 (SC) (ii) CIT vs. Neha Builders 296 ITR 661 (Guj) (iii) ACIT vs. Haware Construction Pvt. Ltd. (2019) 101 taxman.com 168 (Mumbai Trib) dated 31st August, 2018. On the other hand, the ld. counsel has supported the order of lower authorities. 4. We have heard the rival contentions and perused the material on record carefully. The ld. CIT(A) has sustained the addition made by the assessing officer after placing r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 has held that if two reasonable constructions of a taxing provisions are possible, that construction which favours the tax payer must be adopted. In view of the above position of law, we shall follow the decision in Neha Builders (P.) Ltd. 's case (supra). In the light of the above facts and judicial findings of the Hon ble Jurisdictional High Court in the case of Neha Builder Pvt. Ltd. (supra) and after considering the decision of ITAT Mumbai Bench as cited above, we set aside the order of the ld. CIT(A) and consider that in the case of the assessee any income derived was stock would be income from business and not income from property, therefore, allow the appeal o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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