Case Law Details
Prashasti Enterprise Vs PCIT (ITAT Mumbai)
The short contention on behalf of the assessee is that no notional rent is offered to tax in respect of unsold flats lying vacant held as closing stock is in line with the decision of Mumbai Bench of the Tribunal in the case of Osho Developers Vs. ACIT (supra). Whereas, the PCIT has taken a contrary view following the decision of Hon’ble Delhi High Court in the case of CIT vs. Ansal Housing Finance & Leasing Company Ltd. (supra).
We find that in the case of Osho Developers vs. ACIT (supra), the Mumbai Bench of the Tribunal concluded that the annual letting value of flats held as stock-in-trade cannot be brought to tax under the head “house property”. While taking such view the Tribunal distinguished the decision rendered in the case of CIT vs. Ansal Housing Finance & Leasing Company Ltd. (supra). Thus, as per the decision rendered in the case of Osho Developers vs. ACIT (supra) no addition could have been made u/s. 23 of the Act in respect of vacant flats held as stock-in-trade and carried forward as closing stock.
It is a well settled law that where two views are possible and the Assessing Officer has taken one of the possible view, the PCIT cannot substitute his view in exercise of revisional jurisdiction u/s. 263 of the Act. In the instant case the PCIT has tried to super impose his view in exercise of powers u/s. 263 of the Act over one of the possible view taken by Assessing Officer. This is not in accordance with the settled law. Thus, the PCIT has exceeded his jurisdiction in exercise of revisionary powers.
Thus, in facts of the case, we find merit in appeal of the assessee, hence, impugned order is quashed and appeal of the assessee is allowed.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
