No deemed rental house property income can be computed when flats are held as stock in trade – ITAT deletes addition
ABCAUS Case Law Citation:
ABCAUS 2668 (2018) (12) ITAT
Important Case Laws Cited/reliedupon:
M/s. Cosmopolis Construction vs. ITO
M/s. C.R. Developments Pvt. Ltd. Vs. JCIT
M/s. Runwal Constructions Vs. ACIT
Shri Girdharilal K. Lulla Vs. DCIT
Commissioner of Income Tax Vs. Vegetable ProductsLtd
Commissioner of Income Tax Vs. Neha Builders (P.)Ltd
The assessee had appealed against the order passed by the CIT(A) confirming the addition of deemed rent on unsold flats shown as stock in trade.
The assessee was a Builder which declared five flats in its closing stock. The Assessing Officer (AO) applying the provisions of section 23 of the Income tax Act, 1961 (the Act), computed the notional income under the head `Income from house property’ at the rate of Rs. 4,000/- per month per flat.
No relief was allowed to the assessee in the first appeal
The Tribunal following its earlier judgment held that no rental income can be computed when flats are held as stock in trade. Accordingly the impugned order was reversed and Assessing Officer (AO) was directed to delete the addition.
Related Update: No notional income for house property held as stock-in-trade till certificate of completion is obtained >>
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