Taxing Unsold Flats: Section 23(5) Inapplicable to AY 2014-15 – ITAT Pune

Mahanagar Constructions Vs ITO (ITAT Pune) Income Tax Appellate Tribunal (ITAT), Pune Bench, has set aside an addition of Rs. 11,59,200/- to the income of Mahanagar Constructions, a partnership firm engaged in real estate development, in a ruling for Assessment Year 2014-15. The tribunal held that notional rental income from unsold flats, held as stock-in-trade and never let out, could not be taxed under the head “Income from House Property.” The dispute arose after the Assessing Officer (AO) computed an Annual Letting Value (ALV) for six unsold flats owned by Mahanagar Constructio...