Case Law Details
M/s. Shree Balaji Ventures Vs ITO (ITAT Pune)
It is apparent that the view point bolstered by the authorities that Annual Letting Value in respect of unsold properties lying with the assessee as a stock in trade, should be determined u/s. 23 of the Act, cannot be countenanced in the hue of the later judgments of the Hon’ble Summit Court. Once it is held that the income of a Builder in respect of letting out of the properties is chargeable under the head “Profit and gains of business or profession”, the provisions enshrined in Chapter IV-D get magnetized and not those under the head “Capital gains”. It is no doubt true that section 23 of the Act deems the determination of income from house property, which is not let out, but it is equally trite that a deeming provision cannot be extended beyond its ambit, so as to cover the heads of income or the sections, to which it does not operate. My attention has not been drawn by the ld. DR towards any specific provision under Chapter IV-D of the Act which deems rental income on the properties held as stock in trade, waiting for sale and not actually let out, as chargeable to tax under the head “Profit and gains of business or profession”. As the assessee admittedly did not earn any rental income from letting out of these two units, which position has also not been disputed by the AO, in my considered opinion, taxing any hypothetical income, which is otherwise not sanctioned by any provision under Chapter IV-D, cannot be permitted.
FULL TEXT OF THE ITAT JUDGMENT
This appeal by the assessee emanates from the order passed by the CIT(A)-5, Pune on 22-08- 018 in relation to the assessment year 2015-16.
2. The only effective ground raised in this appeal is against the confirmation of addition of Rs.34,35,432/- made by the Assessing Officer (AO) by determining the income under the head “Income from house property”, being, the annual letting value (ALV) of the unsold units of properties lying as stock in trade.
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