Case Law Details
DCIT Vs Ashrita Construction Pvt. Ltd. (ITAT Ahmedabad)
it is pertinent to note that the assessee has shown closing stock of Rs.24,55,10,895/- and received building use permission in respect of the same. It is undisputed fact that the assessee is engaged in the business of construction and only profit on sale of constructed unit are shown as business income whereas unsold units which are shown as stock in trade forms the part of business of the assessee. The CIT(A) has rightly held that since the assessee was a developer and held the unit in questions income from such unit can be taxed as only business income and not as income from house property. It is pertinent to note there is no concept of deemed rent while computing business income and the CIT(A) has rightly deleted the addition. The decision of Hon’ble Delhi High Court in the case of Ansal Housing Finance and Leasing Co. Ltd. (supra) will not be applicable in the present case as the assessee has already treated the said unsold unit as stock in trade. The decision of Hon’ble Gujarat High Court in the case of CIT vs. Neha Builders – 296 ITR 661 (Guj) in fact is applicable in the present case as the issues herein are identical to the present case. If property is used as stock in trade then such property would become or partake the character of stock and any income from stock would be income from business and not income from property. Thus, the CIT(A) was right in deleting the addition.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal is filed by the Revenue against the order dated 21st May, 2019 passed by the CIT(A)-11, Ahmedabad for the Assessment Year 2016-17.
2. The Revenue has raised the following grounds of appeal :-
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