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TMI Blog2019 (7) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... : Shri Nikhil Pathak For The Revenue : Shri Rajesh Gawali ORDER PER ANIL CHATURVEDI, AM : 1. This appeal filed by the assessee is emanating out of the order of Commissioner of Income Tax (A) 7, Pune dated 22.05.2018 for the assessment year 2014-15. 2. The relevant facts as culled out from the material on record are as under :- Assessee is a company stated to be engaged in the business of Real Estate and Developers. Assessee electronically filed its return of income for A.Y. 2014-15 on 26.11.2014 declaring total income of ₹ 107,78,02,634/-. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) r.w.s 144C of the Act vide order dt.22.12.2017 and the total income was determined at ₹ 107,94,27,110/-. Aggrieved by the order of AO, assessee carried the matter before Ld. CIT(A), who vide order dt.22.05.2018 (in appeal No.PN/CIT(A)-7/CIR-14/10259/2017-18) granted partial relief to the assessee. Aggrieved by the order of Ld. CIT(A), assessee is now in appeal before us and has raised the following grounds : 1. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ern i.e., M/s. Kolte Patil Developers Limited in A.Y. 2012-13, wherein the Co-ordinate Bench of the Tribunal after considering the decision of Hon ble Delhi High Court in the case of Ansal Housing Finance Leasing Co., Ltd., (supra) and other decision cited in the order has decided the issue in favour of the assessee. He placed on record the copy of the aforesaid order and pointed to the relevant findings. He further submitted that the facts in the present case and that of the case facts of its sister concern are similar and therefore following the decision in the case of its sister concern i.e., M/s. Kolte Patil Developers Limited, the issue be decided accordingly. Ld. D.R. on the other hand, supported the order of AO and Ld.CIT(A). 6. We have heard the rival submissions and perused the material on record. The issue in the present ground is with respect to taxability of deemed rent in respect of six unsold flats / bunglows held in stockin- trade by the assessee u/s 23 of the I.T. Act. We find that identical issue arose in the case of assessee s sister concern i.e., M/s. Kolte Patil Developers Limited (supra) in A.Y. 2012-13, wherein the issue was decided in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tock-in-trade by the assessee is to be assessed under the head Business Income or under the head Income from House Property . The Hon ble Gujarat High Court in the case of Commissioner of Income Tax Vs. Neha Builders (P.) Ltd. (supra) has held that where the property is held as stock-in-trade any income derived rom stock would be income from business and not income from house property . The relevant extract of the findings of Hon ble High Court are as under : 7. From the order passed by the learned CIT(A), it would clearly appear that the case of the assessee was that the company was incorporated with the main object of purchase, take on lease, or acquire by sale, or let out the buildings constructed by the assessee. Development of land or property would also be one of the businesses for which the company was incorporated. 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 becom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he flats under the head Income from House Property . On the contrary the Revenue wanted to tax rental income under the head Business Income . The matter travelled to the Tribunal. The Tribunal held that the income earned by the assessee from renting of flats is to be assessed under the head Income from House Property . The Department carried the matter in appeal before the Hon ble High Court. The Hon ble High Court confirmed the findings of Tribunal and held that rental income received from unsold portion of property constructed by the assessee, is assessable as income from house property. The core difference between the case of the assessee and in the case of Commissioner of Income Tax Vs. Sane Doshi Enterprises (supra) is that in the case of assessee, it is notional annual rental income on flats held as stock which is sought to be taxed, whereas in the case of Commissioner of Income Tax Vs. Sane Doshi Enterprises (supra) it was the case of actual rental income earned by the assessee from renting of flats constructed by it. Hence, the decision rendered in the case of Commissioner of Income Tax Vs. Sane ..... X X X X Extracts X X X X X X X X Extracts X X X X
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