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TMI Blog2019 (5) TMI 1689X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of the aforesaid deliberations, the Tribunal while disposing off the aforesaid appeal had vacated the addition of the ALV‟ that was made by the lower authorities in respect of the flats/shops which were held by the assessee before them as stock-in-trade of its business of a real estate developer. - Decided in favour of assessee. - ITA Nos. 281 & 291/Mum/2018 - - - Dated:- 8-5-2019 - Shri Shamim Yahya, Accountant Member And Shri Ravish Sood, Judicial Member For the Appellant : Shri Ruturaj H. Gurjar, A.R For the Respondent : Shri Manoj Kumar Singh, D.R ORDER PER RAVISH SOOD, JM The present appeals filed by the assessee are directed against the respective orders passed by the CIT(A)-52, Mumbai, dated 31.10.2017 for A.Y. 2013-14 and A.Y. 2014-15, which in turns arises from the respective assessment orders passed under Sec.143(3) of the Income Tax Act, 1961 (for short I-T Act‟). As common issues are involved in the aforementioned appeals, therefore, the same are being taken up and disposed off by way of a consolidated order. We shall first advert to the appeal of the assessee for A.Y. 2013-14. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ITAT, Mumbai, in the case of Omprakash Company (2004) 87 TTJ 183 (Mum) Chemmeck Pvt. Ltd. (2002) 83 ITD 427(Mum). In the backdrop of his aforesaid deliberations, the A.O called upon the assessee to furnish the details along with working of the ALV of the aforesaid units. In reply, the assessee submitted that as the aforesaid units were held by it as a developer, therefore, the ALV‟ of the same could not be brought to tax under the head income from house property . However, the aforesaid contention of the assessee did not find favour with the A.O. In fact, the A.O was of the view that as the assessee was the Owner‟ of the aforesaid completed units and was occupying the said properties with the full right to sell the same, therefore, the ALV‟ of the same was liable to be brought to tax under the head income from house property‟. As the assessee failed to provide the details as regards the ALV‟ of the aforesaid shops and units, therefore, the A.O estimated the same @ 8.5% of the cost of construction of the said property. On the basis of his aforesaid observations, the A.O worked out the total deemed income from house property‟ at S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... real estate was to be brought to tax under the head income from house property . 6. Per contra, the ld. Departmental Representative (for short D.R‟) relied on the orders of the lower authorities. 7. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record and judicial pronouncements relied upon by them. Admittedly, the assessee who is a developer of real estate had developed a property viz. project at Plot No. 16-30-A, Vashi, under the name and style of Vashi Infotech Park. As is discernible from the orders of the lower authorities, the assessee was holding closing stock‟ of finished unsold units in Vashi Infotech Park of ₹ 87,46,129/-. In sum and substance, there is no dispute on the fact that the finished unsold units in Vashi Infotech Park were held by the assessee as the closing stock‟ of its business as that of a developer of real estate. 8. We find that our indulgence in the present appeal has been sought by the assessee for adjudicating, as to whether the CIT(A) is right in law and the facts of the case in concurring with the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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'. Even otherwise, it is to be seen that there was distinction between the 'income from business' and 'income from property' on one side, and 'any income from other sources'. The Tribunal, in our considered opinion, was absolutely unjustified in comparing the rental income with the dividend income on the Shares or interest income on the deposits. Even otherwise, this question was not raised before the subordinate Tribunals and, all of sudden, the Tribunal started applying the analogy. 10. Further, we find that the Hon ble High Court of Bombay in the case of PCIT, Central-1 Vs. M/s Classique Associate Ltd. (ITA No.1216 of 2016, dated 28.01.2019) concurring with the view taken by the Hon‟ble High Court of Gujarat in the case of CIT Vs. Neha Builders Pvt. ltd. (2008) 296 ITR 661 (Guj), and further relying on the judgment of the Hon‟ble Supreme Court in the case of Chennai Properties Inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate the addition of ₹ 5,20,394/- (i.e net ALV‟) made by the A.O towards deemed income from house property‟, which thereafter was sustained by the CIT(A). The order of the CIT(A) is set aside in terms of our aforesaid observations. 12. The appeal of the assessee is allowed. ITA No. 291/Mum/2018 A.Y. 2014-15 13. We shall now advert to the appeal of the assessee for A.Y. 2014- 15. Briefly stated, the assessee company had e-filed its return of income for A.Y. 2014-15 on 14.11.2014, declaring total income of ₹ 21,12,227/-. The return of income filed by the assessee was processed as such under Sec. 143(1) of the I.T Act. Subsequently, the case of the assessee was selected for scrutiny assessment under Sec. 143(2). 14. During the course of the assessment proceedings the A.O observed that the assessee was holding closing stock‟ of finished unsold units in the project, viz. (i) Vashi Infotech Park; and (ii) Haware Infotech Park of a value (cost of construction) of ₹ 54,29,432/- and ₹ 43,72,09,039/-, respectively. The A.O relying on the judgment of Hon‟ble High Court of Delhi in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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