DCIT Vs Haware Construction Private Limited (ITAT Mumbai)
The Mumbai ITAT disposed of Revenue appeals arising from orders of the CIT(A)-24, Mumbai, concerning A.Ys. 2012-13 and 2013-14. The appeals involved the treatment of completed but unsold flats and shops held by the assessee, a company engaged in building, developing and civil construction, as stock-in-trade of its real estate development business.
For A.Y. 2012-13, the assessee filed its return on 28.09.2012 declaring a loss of Rs.4,13,31,436/-. During assessment under Section 143(3) of the Income Tax Act, 1961, the Assessing Officer noted closing stock of completed unsold flats/shops valued at Rs.31,75,24,853/-. Relying on CIT Vs. Ansal Housing Finance & Leasing Company Ltd. (2013) 354 ITR 180 (Del), the AO treated the annual lettable value (ALV) of the units as taxable under “Income from house property” and estimated it at 8% of their book value, resulting in ALV of Rs.2,54,01,988/-. After allowing a statutory deduction of Rs.76,20,596/- under Section 24(b), the AO made a net addition of Rs.1,77,81,892/-.
The CIT(A) deleted the addition, noting that identical additions for A.Ys. 2009-10, 2010-11 and 2011-12 had been deleted in earlier proceedings. Before the ITAT, the assessee relied on the Tribunal’s decision in its own case for A.Y. 2010-11, while the Departmental Representative relied on the AO’s order.
