Case Law Details
DCIT Vs Shah Bafna Associates (ITAT Pune)
It is seen that the assessment year under consideration is 2014-15. The Finance Act, 2017 introduced subsection (5) to section 23 providing that where a property held as stock in trade is not let out during the year, its annual value, after a period of one year or as revised to two years, shall be considered for the purposes of inclusion under the head `Income from House property’. This amendment has been brought out w.e.f. 01-04-2018. Thus, this provision manifestly does not apply to the assessment year under consideration. Prior to the amendment, the Tribunal considered this aspect in several cases including Cosmospolis Construction vs. ITO (ITA No.230 & 231/PUN/18) and held that no income from house property can result in respect of unsold flats held by a builder as stock in trade at the year-end. While disposing of the above referred case, the Tribunal observed that income from unsold flats could be considered only under the head “Profits and Gains from business or profession” and not “Income from House Property”. It is but natural that if a particular income is to be taxed under a specific head, the computational mechanism governing that head only can come into play. There is no provision under the head “Profits and Gains from business or profession” which deems the rental income from unsold flats held as stock as ‘Business income’. In the ultimate analysis, the Tribunal eventually deleted the addition. Considering the above factual and legal position, we are of the considered opinion that the order of the ld. CIT(A), in deleting the addition of Rs.23,04,982/- made by the AO, does not call for any interference.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal filed by the Revenue is directed against the order passed by the Commissioner of Income-tax (Appeals)-13, Pune on 27-01-2020 in relation to the assessment year 2014-15.
2. The appeal is time barred by 92 days. The Revenue filed the appeal on 07-07-2020. Prima-facie, the delay pertains to the covid-19 pandemic period prevailed across the country. Therefore, the said delay is condoned, admitting the appeal for disposal of merits, by virtue of the judgment of the Hon’ble Supreme Court in Cognizance for Extension of Limitation, In re 438 ITR 296 (SC) read with judgment in Cognizance for Extension of Limitation, In re 432 ITR 206 (SC) dated 08-03-2021 and 421 ITR 314.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
