Income from Flats / Shops held as Stock-in-Trade is Business Income

2 Comments

1. vswami says:

   Correction: Last but one line from bottom- to be read , – ‘notional’ !

     Reply

   January 6, 2019 at 6:59 pm
2. vswami says:

   OFFHAND
   4.3 Keeping in view the consistent stand of this Tribunal and respectfully following the same, we hold that if a immoveable property in the shape of flats / shops is held as stock-in-trade, then it becomes part of trading operations for the assessee and as a natural corollary, ANY INCOME DERIVED there-from WOULD BE Business Income and not Income from House Property. Resultantly, the impugned additions as confirmed by first appellate authority stand deleted. (FONT supplied)
   Of course ;;as quite rightly said, if and when income is derived, that is on sale of the unsold stock, it would be assessable. and assessed as
   business income,in the year of sale-Not until then !

   courtesy

   PS:: Until such sale, the developer- builder , in one’s conviction, in view of the governing law for Flats, might have to continue to hold the unsold Flats as st-in-trade. For that matter, he cannot even convert it into , and sell as, ‘capital asset’..
   In any event, the question of taxing any national income cannot arise – Any thoughts to the contrary ?

     Reply

   January 5, 2019 at 1:33 pm