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TMI Blog2023 (4) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... be offered as business income and no rental income received by the assessee from such 15 unsold flats. Therefore, facts in the case of Gundecha Builders [ 2019 (1) TMI 112 - BOMBAY HIGH COURT] are different from the facts of the present case in hand. Thus, we reject the arguments of ld. DR of applicability of observation in the case of Gundecha Builders (supra). This Tribunal in the case of Sai Spacecon India Pvt. Ltd. [ 2022 (1) TMI 1361 - ITAT PUNE] held no addition on account of deemed rent on unsold flats could be made in the hands of the assessee. We hold that the order of CIT(A) is not justified in confirming the view of AO in levying deemed rent u/s. 23(4) of the Act on account of income from house property. Grounds raised by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de addition to an extent of Rs.25,20,000/- by ascertaining fair market annual letting value to the total income of the assessee. The CIT(A) confirmed the view of AO. Aggrieved by the order of CIT(A), now, the assessee is before us. 4. The ld. AR, Shri Suhas Bora placed on record decisions in favour of the assessee and details of unsold flats, property tax receipts and copy of occupancy certificates. The ld. AR contended that the deemed rent u/s. 23(4) of the Act is not leviable and placed reliance in the case laws from pages 1 to 14 and 35 to 62 of paper book, vehemently argued that the order of CIT(A) in confirming the order of AO in determining deemed rent u/s. 23(4) of the Act under the head "Income from house property" is not maintaina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business of assessee therein. Further, the Hon'ble High Court of Bombay by placing reliance in the case of Sane & Doshi Enterprises reported in 377 ITR 165 (Bom.) dismissed the substantial question of law raised by the Revenue by holding that the said question does not give any rise to substantial question of law which is evident from para 3(f) of the said decision. It is pertinent to note that the facts in the case of Gundecha Builders (supra) before the Hon'ble High Court was that the assessee therein received rental income which was classified as income from house property which is evident from para 3(b) of the said order. There is no dispute with regard to this aspect from the ld. DR. 8. Coming to the present facts of the case the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the income from it is income from Business and Profession and not from House Property. The AO did not accept the submissions of the assessee and proceeded to calculate deemed rent vide its Para No. 5.4 to an extent of Rs.27,97,200/-. The CIT(A) confirmed the same. According to ld. AR that the issue is covered in favour of the assessee and the addition made by the AO as confirmed by the CIT(A) is not maintainable and the assessee recognized unsold flats as stock-in-trade. The ld. AR placed on record of order of this Tribunal in the case of Kumar Properties and Real Estate Private Limited in ITA No. 2977/PUN/2017 for A.Y. 2013-14. The Co-ordinate Bench of Tribunal vide order dated 28-04-2021 discussed the issue in detail from Para Nos. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofits of such business are chargeable to Income-tax. Thus, in our opinion, all the four conditions provided in exclusion clause in section 22 of the Act are to be excluded, therefore, we hold that no addition on account of deemed rent on unsold 37 flats can be made in the hands of the assessee. The ld. DR did not dispute that the assessee recognized the unsold flats as stock-in-trade but however relied on the order of CIT(A). Thus, the order of CIT(A) is not justified and it is set aside. Thus, the grounds raised by the assessee are allowed." 9. In the light of the above, we hold that the order of CIT(A) is not justified in confirming the view of AO in levying deemed rent u/s. 23(4) of the Act on account of income from house property. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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