Case Law Details
Case Name : CIT Vs Sane & Doshi Enterprises (Bombay High Court)
Appeal Number : ITA No. 5313, 5592, 6030, 6032 & 6034 of 2010, 1498 of 2011, 1504 of 2012, 418, 675 & 375 of 2013
Date of Judgement/Order : 09/04/2015
Related Assessment Year :
Courts :
All High Courts Bombay High Court
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Brief of the case:
Hon’ble HC have decided following questions of law in these bunch of appeals:
- Whether ITAT was justified in directing the AO to tax the rental income of Rs.45,57 lakhs as ‘income from house property’ and to allow deduction u/s 24 ignoring the fact that the income was received from the business asset of unsold flats shown as closing stock?
- Whether ITAT was justified in directing the AO to allow the claim of expenses of Rs.45 lakhs on account of provision for incomplete work ignoring the fact that there was no incomplete work in the project as is evident from the fact that assessee has received rental income out of closing stock shown by him?
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Issue of rental income unsold flats , of builders inventory, building not habitable, no potentially of earning rental income, needs to be discussed.
It is a myth that on taxing notional income of unsold inventory will induce builders not to hoard.
Supposedly, a proposed 20 stories building is stuck up at 16 the floor, in Approval / permission wrangles, and flats are unsold at many levels, OC not obtained, no water connection, construction incomplete, if Revenue demand tax.
May I expect some light on this issue.
Can any Tax guru, find a case of , where AO has made additions, in a builder’s project wherein, 1. Building is not in ahabitable condition, 2. OC not obtained 3. Water connection not obtained.
AO made additions, for notional rental income, u/s 23 and deduction u/s 24 (30℅).
How can additions be made, for NON habitable unsold flats, even though, building may be complete UpTo 90℅.
Notional rental income can be potential, only if flats habitable with OC.
Is ITAT/High Court judgement to quote