Notional Rent on Work-in-Progress Invalid – Section 23 Misapplied

Rushikesh construction Vs ITO (ITAT Pune) Notional Rent on Work-in-Progress Invalid – Section 23 Misapplied The ITAT held that the Assessing Officer wrongly invoked section 23(4)(b) to compute notional rental income on unsold properties held by a builder. The AO treated closing stock as finished goods and calculated notional rent, making an addition of ₹5.02 lakh. However, the Tribunal observed that the properties were work-in-progress (WIP) and construction was not complete. Therefore, they could not be considered as completed units capable of generating rental income. Further, the am...