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TMI Blog2019 (11) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition of lease rent on unsold area of 10,505 Sq Ft instead of area of 32,955 Sq Ft in the KPCT project. The learned CIT(A)-II, Pune ought to have appreciated that the remaining balance area of 22,450 Sq Ft (i.e. 32,955 - 10,505) was still under construction and not having completion certificate of PMC. 3. The CIT(A)-II erred in law and on facts in directing disallowance of following expenses on the analogy that the said expenses were for repairs and maintenance for rented area of 88,105 Sq Ft Area of the KPCT project a) Material purchase - Rs. 12,16,734 b) Labour charges - Rs. 5,20,138 c) Repairs & Maintenance - Rs. 21,58,647 4. The learned CIT(A)-II erred in law and on facts in confirming disallowance of Rs. 1,70,566 u/s 14A of the ITA, 1961 without appreciating appellant's contention that no any deduction is claimed for expenses incurred in relation to the exempt income of Rs. 6,750/-. 5. Alternatively and without prejudice to Ground No.4, the CIT(A)-II, Pune erred in not confining the disallowance u/s 14A, to the extent of exempt income of Rs. 6,750/-. 6. The learned CIT(A)-II erred in law and on facts in denying the deduction of Rs. 3,72,400/- claimed u/s 80- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l rent-ALV relatable to the unsold/unlet areas which was never actual let out, the Tribunal held that the same is never chargeable to tax as the same constitutes only unreal income. Highlighting the disallowances or the additions on protective basis, ld. AR submitted that the construction of different in area of 32,955 sq.ft., it is not yet fully completed. Therefore, the letting of the same in the year under consideration does not arise. 6. On hearing both the sides, we find the identical issue came up before the Tribunal in assessee's own case for the assessment year 200506 vide ITA No.344/PUN/2010 and others dated 08.11.2017 where the Tribunal, for rent or notional rent, adjudicated the similar issue and decided the same in favour of the assessee. The contents of para 44 to 47 of the said order of the Tribunal in assessee's own case (supra) are relevant and the same are extracted hereunder :- "44. We have heard the rival contentions and perused the record. The issue which arises in the appeal filed by the Revenue is against assessability of rental income received by the assessee in respect of unsold shops in the KPCT project. The assessee had claimed the said rental income un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra) and also the Special Bench of Tribunal and the Apex Court in earlier decisions, we hold that rental income received by the assessee on letting out unsold shops is to be assessed as 'Income from property' in the hands of assessee. The CIT(A) has already directed that in case any expenditure in relation to the marketability of the said unsold shops is debited by the assessee, then the same is not to be allowed in the hands of assessee, against which the assessee is not in appeal. In view thereof, we find no merit in the stand of the Assessing Officer in this regard. Applying the ratio laid down by the Hon'ble High Court of Bombay in CIT Vs. Sane & Doshi Enterprises (supra), even if the asset is in stock in trade of assessee, then till the time it is unsold and has been exploited by letting out, then the said income is to be assessed in the hands of assessee as 'Income from property'. Accordingly, we hold so. Upholding the order of CIT(A), we dismiss the grounds of appeal raised by the Revenue both in assessment years 2007-08 and 2008-09." 7. From the above, it is evident that the real rental income earned by the assessee out of letting of the unsold flats is taxable under the h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for statistical purposes. 11. Grounds no.4 and 5 relate to the disallowance u/s 14A of the Act. Deviating from the main arguments in the said grounds, ld. Counsel for the assessee submitted that the disallowance u/s 14A of the Act needs to be restricted to the total exempt income of Rs. 6,750/- which is earned during the year and formed part of the total income of the assessee. In this regard, ld. Counsel relied on the various judicial decisions in support of the claim. 12. On hearing both the sides on this issue and considering the settled nature of the issue, we are of the opinion that the Assessing Officer should be directed to restrict the disallowance to the said sum of 13. Ground no.6 relates to the denying of deduction claimed u/s 80IB(10) of the Act. 14. Before us, at the outset, ld. Counsel for the assessee submitted that this issue is identical to one already adjudicated by the Tribunal in assessee's own case for the assessment year 2012-13 vide ITA No.2225/PUN/2016 dated 28.03.2019 and the contents of para 13 and 14 of the said order of the Tribunal (supra) are relevant in this regard. 15. On hearing both the sides, we find identical issue came up before the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction u/s 80IB(10) of the Act is a decided issue in the own case of the assessee in earlier years. Considering the above settled legal nature of this issue, we find the order of the CIT(A) is fair and reasonable and it does not call for any interference. Thus, the ground no.6 is allowed. 17. In the result, the appeal of the assessee is partly allowed for statistical purposes. 18. Now, we shall take up the appeal of the Revenue for adjudication in the following paragraphs. ITA No.1838/PUN/2014 - By Revenue 19. The grounds raised by the Revenue are as under :- "1. The learned Commissioner of Income-tax (Appeals) erred in holding that the rent received by the assessee in respect of the building held as stock-in-trade could only be assessed under the head "income from house property", as had been shown by the assessee in its return of income, and not under the head "profits and gains of business or profession", as had been assessed by the Assessing Officer. 2. The learned Commissioner of Income-tax (Appeals) erred in failing to appreciate that as the facts and circumstances pertaining to the case would clearly show, the intention of the assessee was to let out of the buildi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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