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2017 (10) TMI 169

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..... All these seven appeals have been preferred by the department against the order of the CIT(A)-XXXI, New Delhi dated 30.06.2014 and pertain to Assessment Years 1988-89, 1990-91 to 1995-96. 1.1 All the appeals have identical issues and therefore these were heard together and are being disposed of through this common order. 2. Brief facts of the case are that the assessee is a builder and promoter who had several simultaneous residential/commercial projects undertaken at different places. As on any date the assessee had few unsold flats/commercial space/open area etc. in different projects. There were also certain flats/commercial spaces, open area in respect of which occupation certificate was yet to be obtained even though the projects had been completed. This was so because the assessee had treated the projects as being completed on completion of 90% of the project and had offered the same for taxation. However, the Assessing Officer was of the view that unsold properties also qualified for inclusion in income from house property on notional basis although the same was part of stock in trade of the assessee company. Assessments were completed for assessment years 1988-89 to .....

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..... ow, the department has approached the ITAT and has challenged the deletion made by the ld. CIT(A) for all the seven years. The grounds raised are identical in all the seven years and are not being reproduced for the sake of brevity. 4. Ld. DR submitted that the department was agitating broadly the deletion of addition on account of notional ALV in respect of car parking spaces. It was submitted that car parking space in Ansal Bhavan was not for the exclusive use of the assessee and it occupied only a part of the building. It was further submitted that the other ground agitated by the department pertained to the deletion of addition on account of notional ALV in respect of basement area in the Akashdeep building by ignoring the fact that the assessee itself had shown a space under stock in trade. Ld. DR further submitted that the other point of contention between the department and the assessee was the deletion of addition of notional ALV in respect of Dilkhush Bagh Industrial Area which was deleted in spite of the fact that the assessee itself had shown the space under stock in trade. It was further submitted that the department was also agitating the deletion of addition on acc .....

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..... isputed by the department also, and therefore, the same should be upheld. Ld. AR also filed written submissions which have been taken on record. Ld. AR urged that the deletions made by the ld. CIT(A) were correct both on facts as well as in law and therefore, the adjudication by the ld. CIT(A) should be upheld. 5. We have heard the rival submissions and have perused the material on record. It is seen that the Hon ble Delhi High Court has, on appeal by the department, vide order dated 2.10.2012, held against the assessee by observing that income tax will be leviable on a notional basis on ALV. The relevant observations and adjudication of the Hon ble Delhi High Court as contained in para 13 and 14 of the said order are as under:- 13. In the present case, the assessee is engaged in Building activities. It argues that flats are held as part of its inventory of stock in trade, and are not let out. The further argument is that unlike in the other instances, where such builders let out flats, here there is no letting out and that deemed income - which is the basis for assessment under the ALV method, should not be attributed. This Court is of the opinion that the argument, thou .....

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..... his contention is, therefore, rejected. Thus, this question is answered in favour of the revenue, and against the assessee. 6. Thus, it is amply clear that the Hon ble Delhi High Court has held that the assessee will be taxable on the basis of ALV of the unsold flats also. A perusal of the impugned orders shows that the ld. CIT(A) has allowed substantial relief to the assessee by taking into account various factors which are summarized as under:- i) While giving relief in respect of notional ALV in respect of car parking space in Ansal Bhavan, the ld. CIT(A) has noted that only the assessee s registered office was situated on the first floor of Ansal Bhavan but was also occupying large space in other floors of the building for the purposes of business. He went on to delete the addition by holding that car parking space was for the purposes of business and, therefore, the same should not be subjected to notional ALV. ii) Relief in respect of Akashdeep Building was given by the ld. CIT(A) by relying on the report of Asstt. Valuation Officer-II, New Delhi wherein the Valuation Officer had confirmed that the basement in the said building was being used as a common area. .....

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