DCIT Vs Neepa Real Estates Pvt. Ltd. (ITAT Mumbai)
Summary: The Mumbai Bench of the Income Tax Appellate Tribunal disposed of the Revenue’s appeal and the assessee’s cross-objections arising from the order dated 02.02.2023 passed by the CIT(A) for Assessment Year 2017-18. The assessee, M/s. Neepa Real Estates Pvt. Ltd., was engaged in development of a residential and commercial project named “Vasant Oasis”. The project was being developed in three phases. In Phase-I, consisting of six buildings, occupation certificates were issued during Financial Year 2016-17 for three buildings, namely Ornella, Tiffany and Emrald. Phase-II had not commenced up to 31.03.2017, while no occupation certificate had been received for any building in Phase-III during the relevant financial year. The assessee furnished building-wise details of flats, sold flats and unsold inventory and had not given any flat on rent during the year.
The Assessing Officer, relying upon the decision of the Delhi High Court in CIT v. Ansal Housing Finance & Leasing Co. Pvt. Ltd., (2013) 354 ITR 180, treated the unsold stock of the three buildings, valued at Rs.71,39,31,675/-, as yielding deemed annual letting value. The AO estimated ALV at 8.5% and, after allowing 30% deduction, made an addition of Rs.4,24,78,935/- under the head “Income from house property”. The AO also made an addition under section 43CA in respect of Flat No. 1106, Ebony, sold to Mrs. Pushpa S. Hajare.
