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TMI Blog2019 (4) TMI 1312X X X X Extracts X X X X X X X X Extracts X X X X ..... true that income derived from the property would always be termed as 'income' from the property, but if the property is used as 'stock-in-trade', then the said property would become or partake the character of the stock, and any income derived from the stock, would be 'income' from the business, and not income from the property. If the business of the assessee is to construct the property and sell it or to construct and let out the same, then that would be the 'business' and the business stocks, which may include movable and immovable, would be taken to be 'stock-in-trade', and any income derived from such stocks cannot be termed as 'income from property'. Allowability of expenditure - T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is engaged in development and construction of properties? 2. Whether on the facts and circumstances of the case and in law the Hon'ble Tribunal was justified in not upholding the pro-rata disallowance of ₹ 1,41,00,000/- being expenses pertaining to stock-on-lease, which was rightly made by the AO since such deduction is not allowable while computing income from house property? 3. The respondent-assessee is a partnership firm and is engaged in the business of development of real estate. The questions arise out of the assessee's return of income for the Assessment Year 2006-07. While scrutinising such return, the Assessing Officer noticed that the assessee had earned an amount of ₹ 1.51 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliance on the above decisions of the Gujarat High Court in the case of Neha Builders (supra) and of the Supreme Court in the case of Chennai Properties (supra). In Neha Builders (supra), the Division Bench of the Gujarat High Court was considering a very similar issue. While accepting the assessee's contention in this respect, the Court held and observed as under : 8. True it is, that income derived from the property would always be termed as 'income' from the property, but if the property is used as 'stock-in-trade', then the said property would become or partake the character of the stock, and any income derived from the stock, would be 'income' from the business, and not income from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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