Dugad Properties Vs DCIT (ITAT Pune)
Assessee has shown closing stock of 4,17,41,686/- as on 3 1-03-2015. According to the AO, the assessee has shown value of 9 unsold flats at Rs. 1,81,18,000/- with total area at 9059 sq. ft. The AO was of the opinion that the assessee completed construction of the said flats and possession also given to the flat owners, but did not offer deemed rent on completed and unsold 9 flats. The CIT(A) confirmed the order of AO in making addition of Rs.8,84,234/- on account of deemed rent u/s. 23(4) of the Act. Before us, the ld. AR drew our attention to orders of this Tribunal in support of its contention that no addition is maintainable on deemed rent on unsold flats which are shown as stock-in-trade. We note that this Tribunal in the case of M/s. Cosmopolis Constructions in ITA No. 191/PUN/2022 for A.Y. 2015-16 held no addition is maintainable on account of deemed rent on unsold flats which are treated at stock-in-trade.
In the light of the above, ITAT hold the no addition is justified under deemed rent u/s. 23(4) of the Act. Accordingly, addition made by the AO as confirmed by the CIT(A) is not justified and it is deleted.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal by the assessee against the order dated 29-11-2022 passed by the Commissioner of Income Tax (Appeals)-11, Pune [‘CIT(A)’] for assessment year 20 15-16.
2. Ground Nos. 1 and 2 raised by the assessee challenging the action of CIT(A) in not considering the effect of proviso to section 43CA of the Act in terms of difference between stamp duty valuation consideration is less than 10% in the facts and circumstances of the case.
3. We note that the assessee is firm engaged in the business of builder and promoter. The AO found the difference of value between sale consideration and stamp duty value. The AO asked the assessee to give the details of transactions. The assessee provided the said details which are reproduced by the AO in his order at pages 2 and 3 which are as under:
