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2017 (3) TMI 1615 - AT - Income TaxAddition on account of Notional ALV of unsold flats/spaces - Held that - This ground is to be decided against the assessee because the Delhi Bench of ITAT and Hon ble Delhi High in the assessee s own case for assessment year 1994-95 to 1998-99 2009 (10) TMI 49 - DELHI HIGH COURT has rejected the assessee s plea on this count. Accordingly, ground no.1 is dismissed. Denial of deduction u/s 80IB(10) Held that - There could not be any dispute as regards non-compliance of clause (a) to section 80IB(10). Now, coming to the second ground for rejection of assessee s claim on the ground of some units being of more than 1000 sq.ft., we find that this issue has also been considered in earlier year s appeal and proportionate deduction was allowed. Therefore, for the sake of brevity, we do not repeat the same. Non-fulfilling of the condition of completion of units is concerned, the contention of ld. counsel is that the amendment is prospective. However, he has also pointed out that in the case of assessee, all the projects were completed before the terminal date of completion and completion certificate were also received for majority of the units/houses. Therefore, we do not consider it necessary to go into the issue regarding amendment being prospective or not. The claim of assessee is that actually it has complied with the condition as per amended provisions. The Assessing Officer is directed to verify this aspect and allow the claim in accordance with law. In the result, this ground is partly allowed for statistical purpose. Benefit of section 23(1)(c) - Held that - This provision is applicable in respect of let out/ letiable property. However, in the present case, admittedly, the assessee was holding various commercial and residential flats and spaces for being sold to the prospective buyers. The assessee in its reply, inter-alia, clearly stated that spaces/flats formed part of stock-in-trade of the assessee company as the same was for business purposes and was kept in self possession till the time it was sold. The vacant possession thereof was handed over to the buyers on sale. Thus, the assessee never claimed that the properties were letiable properties and, therefore, assessee cannot get the benefit of section 23(1)(c). The next objection of the assessee is in regard to determination of annual letting value in respect of farm lands. No findings have been recorded in this regard by lower revenue authorities, as to whether annual letting value could be determined in respect of such farm lands in terms of section 22 or not. We may observe that if there was no building on farm lands then it will not come within the ambit of section 22. On this aspect, the Assessing Officer is directed to examine the issue afresh.
Issues Involved:
1. Addition on account of Notional Annual Letting Value (ALV) of unsold flats/spaces. 2. Denial of deduction under section 80IB(10) of the Income Tax Act. 3. Non-consideration of the revised computation of income. 4. Allowance of depreciation under section 32 on consultation/development fees. 5. Deduction under section 35D of the Act. 6. Credit of Tax Deducted at Source (TDS). 7. Charging of interest under section 234B of the Act. Detailed Analysis: 1. Addition on Account of Notional Annual Letting Value (ALV) of Unsold Flats/Spaces: The Assessing Officer (AO) added ?1,56,35,782/- as notional ALV of unsold flats/spaces. The CIT(A) deleted the addition, but the issue was decided against the assessee by the Hon'ble Delhi High Court, which held that the levy of income tax on house property is premised on ownership, not on actual receipt of rent. The Court rejected the argument that the flats were held as stock-in-trade and not let out, stating that the incidence of tax is due to ownership. The assessee's appeal on this issue was dismissed, and the AO's addition was upheld. 2. Denial of Deduction under Section 80IB(10): The AO denied the deduction of ?2,12,84,740/- under section 80IB(10) on the grounds that: - The projects commenced construction before the statutory date of 01.10.1998. - The built-up area of some residential units exceeded 1000 sq. ft. - The entire housing project was not completed before the prescribed date. The CIT(A) upheld the AO's decision. However, the Tribunal referred to its earlier decisions and the Hon'ble Delhi High Court's rulings, which allowed proportionate deduction for units meeting the statutory requirements. The Tribunal directed the AO to verify the completion of projects and allow the claim accordingly. 3. Non-Consideration of Revised Computation of Income: The assessee's revised computation of income, filed during the assessment proceedings, was not considered by the AO. The CIT(A) did not adjudicate this issue. The Tribunal restored the matter to the CIT(A) for adjudication, directing to consider the revised computation and additional TDS claimed. 4. Allowance of Depreciation under Section 32 on Consultation/Development Fees: The AO treated the consultation/development fees paid in AY 2002-03 as capital expenditure and allowed depreciation. The CIT(A) upheld this, and the Tribunal directed the AO to allow depreciation as per past allowances. 5. Deduction under Section 35D: The CIT(A) did not direct the AO to allow the deduction of ?35,907/- under section 35D, as allowed in AY 2003-04. The Tribunal restored this issue to the CIT(A) for adjudication, directing to consider the deduction as claimed by the assessee. 6. Credit of Tax Deducted at Source (TDS): The AO did not grant credit for additional TDS of ?1,43,215/- claimed by the assessee. The CIT(A) did not adjudicate this issue. The Tribunal restored the matter to the CIT(A) for adjudication, directing to consider the revised computation and additional TDS claimed. 7. Charging of Interest under Section 234B: The CIT(A) upheld the charging of interest under section 234B. The Tribunal did not provide specific relief on this ground, and the assessee's appeal on this issue was dismissed. Conclusion: The Tribunal's consolidated order addressed various issues raised by both the assessee and the Department for different assessment years. The Tribunal upheld some of the AO's additions and disallowances while restoring other issues to the CIT(A) for fresh adjudication, directing to consider revised computations and additional claims made by the assessee. The decisions were based on earlier rulings and consistent application of legal principles.
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