Case Law Details
ACIT Vs Balkrishna Shanmugham Chettiar Alias S. Balan (ITAT Pune)
ITAT Pune held that addition of notional rental not sustainable as the residential assets held in stock-in-trade.
Facts- In the present issue, the revenue has challenged the issue of deemed rental income on the assessee’s vacant flats involving Rs.7,17,360/-; assessed as house property income. Notably, the CIT(A) has decided in the assessee’s favour.
Conclusion- As the assessee admittedly did not earn any rental income from letting out of these two units, M/s. Shree Balaji Ventures the AO, taxing any hypothetical income, which is otherwise not sanctioned by any provision under Chapter IV-D, cannot be permitted.
Section 5 of the Act clearly stipulates that a person who is a resident can be subjected to tax in respect of income from whatever source which is received or is deemed to be received in India or accrues or arises or deemed to accrue or arise to him in on outside India during such year. As the instant imaginary income charged to tax by the AO is neither a deemed income under the head ‘Business income’ nor is received or deemed to be received or accruing or arising or deemed to accrue or arise, not falling in any of the categories given in clauses (a) to (c) of section 5(1).
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