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TMI Blog2019 (3) TMI 1656X X X X Extracts X X X X X X X X Extracts X X X X ..... short 'DCIT/ITO/ AO') for the A.Ys. 2013-14 & 2014-15 vide order dated 29.03.2016& 24.11.2016 under section 143(3) of the Income Tax Act, 1961 (hereinafter 'the Act'). 2. The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in computing the deemed rental income under section 22 of the Act under the head of income from house property even when these unsold flat lying as stock in trade in completed project. For this assessee has raised the identically worded grounds in both the years except the quantum. The facts and grounds, we will take up from the assessment year 2013-14. The grounds raised in AY 201314 reads as under: - "1. The learned Commissioner of Income Tax (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck in trade shown by the assessee of 29760 sq.ft and by adopting @ Rs. 50 per square feet per month comes to Rs. 14,88,000/- per month and accordingly, the total annual rent determined at Rs. 1,78,56,000/- (Rs. 14,88,000X12). After allowing the statutory deduction @ 30%, which comes to 53,56,800/-, the net taxable income of Rs. 1,24,99,200/- is brought to tax under the head income from house property." Aggrieved in both the years, the assessee came in appeal before CIT(A) and CIT(A) confirmed the action of the Assessing Officer. Aggrieved, now assessee is in appeal before Tribunal. 4. We have heard rival contentions and gone through the facts and circumstances of the case. At the outset, the learned Counsel for the assessee stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the "annual value‟ of any property consisting of any building or land appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him the profits of which are chargeable to income tax, shall be chargeable to income tax under the head "Income from house property‟. Further, the determination of the "annual value‟ of the property is envisaged in Sec. 23 of the Act. Sec. 23(1)(a) contemplates that the sum for which the property might reasonably be expected to let from year to year is to be deemed as the "annual value‟ of the property which though might not have been let out by the assessee. 8. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance and Leasing Ltd. (2013) 354 ITR 186 (Del). We are of the considered view that in the backdrop of the aforesaid conflicting views of the aforesaid non-jurisdictional High Courts, the view in favour of the assessee as had been arrived at by the Hon‟ble High Court of Gujarat is to be preferred. Our aforesaid view is fortified by the judgment of the Hon‟ble Supreme Court in the case of CIT Vs. Vegetable Products (1973) 88 ITR 192 (SC), wherein the Hon'ble Apex Court had observed that if two reasonable constructions of a taxing provision is possible, then that construction which favours the tax payer must be adopted. Further, we find that ITAT, Mumbai in the case of ACIT-15(2)(1) Vs. M/s Haware Construction Pvt. Ltd. [ITA no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of the Hon'ble High Court of Gujarat in CIT Vs. Neha Builders Pvt. Ltd. (2008) 296 ITR 661 (Guj) and that of the Hon'ble High Court of Delhi in Ansal Housing Finance & Leasing Company Ltd. (2013) 354 ITR 186 (Del), has held that the assessing officer was not correct in bringing to tax the notional annual lettable value of the unsold flats which were held by the assessee as stock-in-trade. On a similar footing a similar view had also been taken by the ITAT, Mumbai Bench "G", Mumbai in the case of Progressive Homes, Mumbai Vs. ACIT-Circle 4(4), Mumbai [ITA No. 5082/Mum/2016; dated 16.05.2018) and ITAT "H" Bench, Mumbai in Haware Engineers & Builders Pvt. Ltd. Vs. DCIT, Central Circle-4(2), Mumbai [ITA No. 7155/Mum/2016; dated 10.10. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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