ITAT Mumbai: Notional Rent Taxable on Unsold Flats Held as Stock-in-Trade (Pre-Sec 23(5) Era)

Haware Engineers and Builders Pvt. Ltd. Vs ACIT (ITAT Mumbai) In this case , the ITAT Mumbai dealt with the taxability of notional rental income (ALV) on unsold flats/shops held as stock-in-trade by a builder. The assessee, a real estate developer, argued that unsold units are business stock, and hence no notional rent should be taxed. Reliance was placed on Neha Builders (Guj HC) and earlier favorable orders in its own case. However, the Tribunal held: The issue concerns vacant unsold stock, not actual rental income. The Gujarat HC ruling applies where actual rent is earned, not where proper...