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TMI Blog2019 (2) TMI 1752X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of appeal, if any, at or before the time of hearing and / or after, modify, reframe any grounds of appeal at or before the time of hearing. 3. At the outset, Ld. Counsel for the assessee submitted that the issue in appeal i.e., whether notional ALV on the unsold flats which are stock in trade can be assed under income from house property or not is squarely covered by the following decisions of the Tribunal:- (i) ITO v. M/s. Arihant Estates Pvt. Ltd., in ITA.No. 6037/Mum/2016 dated 27.06.2018. (ii) M/s Runwal Constructions v. ACIT in ITA.No. 5408/Mum/2016 dated 22.02.2018 (iii) CIT v. Neha Builders (P.) Ltd [296 ITR 661 (GUJ)] (iv) M/s. Saranga Estates Pvt. Ltd., v. DCIT in ITA.No. 4420/Mum/2017 dated 13.03.2019 4. Ld.DR vehemently supported the orders of the authorities below. 5. We have heard the rival submissions, perused the orders of the authorities below and the decisions relied on. On a perusal of the above orders of the Coordinate Benches we find that the issue as to whether the notional Annual Letting Value on unsold properties of the assessee which were held as stock in trade can be assessed under the head income from House Property has been considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to supra had held the decision in favour of the revenue which are on the very same set of facts. We find when there are divergent views given by two non-Jusidrictional High Courts by interpreting the provisions of the Act, then the construction that is favourable to the assessee should have to be construed. Reliance in this regard is placed on the decision of Hon'ble Supreme Court in the case of CIT vs. Vegetable Products reported in 88 ITR 192 (SC). 7.1. In any case, this issue had been duly adjudicated by the Co-ordinate Bench of this Tribunal in the case of Chamber Construction Pvt. Ltd., vs. DCIT in ITA No.4418/Mum/2017 for A.Y.2012-13 dated 30/11/2018 wherein it has been held as under: - "7. We have heard the authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record. We find that our indulgence has been sought by the assessee by preferring the present appeal, for adjudicating as to whether the CIT(A) is right in law and facts of the case in concluding that the deemed notional lettable value of the completed unsold flats held by the assessee company as stock-in-trade was liable to be deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 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". 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been taken by the Tribunal in the case of M/s C.R Development Pvt. Ltd. Vs. JCIT-8(1)(OSD), Mumbai [ITA No. 4277/ Mum/2012; dated 13.05.2015]. It was observed by the Tribunal that estimating of the rental income of the flats held by the assesses as stock-intrade was not justified, as the said flats were neither given on rent nor the assessee had any intention to earn rent by letting out the same. We further find that another coordinate bench of the Tribunal i.e. ITAT, Mumbai Bench "G", Mumbai in ITO-2(1)(1), Mumbai Vs. M/s Arihant Estates Pvt. Ltd. [ITA No. 6037/Mum/2016; dated 27.06.2018] had relied on an earlier view taken by the Tribunal in the case of M/s Runwal Constructions Vs. ACIT in [ITA No. 5408 & 5409/Mum/2016; dated 22.02.2018], and after deliberating on the 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 footi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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