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TMI Blog2024 (9) TMI 867X X X X Extracts X X X X X X X X Extracts X X X X ..... was no such provision which empowers the AO to calculate the deemed rental income/annual value of the property which was held as stock in trade by the builder. In the light of section 22, it is clear that if the property was held as stock in trade i.e. for the purposes of business of the assessee, the annual value of such property shall not be chargeable to income tax under the head Income from house property . Therefore, no annual value or deemed rental income can be determined of such property for the purposes of income tax prior to assessment year 2018-19. The intentions of the Legislature are very much clear because they introduced section 23(5) w.e.f. assessment year 2018-19 only and nowhere it was mentioned that it has been retrospectively made applicable. When the operation of this section was not made retrospective, it is very much clear that the annual value/deemed rental income of property held as stock in trade can be calculated and shall be chargeable to income tax only w.e.f. assessment year 2018-19 and not prior to that. The decision of Dimple Enterprises [ 2023 (9) TMI 426 - ITAT MUMBAI ] relied on by ld. DR does not support the case of the Revenue. Therefore, respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the various units by the local authorities. 6] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal. 3. The facts of the case, in brief, are that the assessee is a firm engaged in construction activities as a Promoter and Builder. The assessee has e-filed its return of income for assessment year 2016-17 on 19-09-2016 declaring total income of Rs. 93,03,425/-. The said return was selected for scrutiny and accordingly a notice u/s 143(2) 142(1) of IT Act was issued and served on the assessee. During the course of assessment proceedings, the Assessing Officer found that the assessee claimed deduction u/s 80IB(10) of the IT Act and as the similar claim was rejected in the earlier years in assessee s own case, therefore, after considering the reply of the assessee, the Assessing Officer rejected the said claim made by the assessee u/s 80IB(10) of the IT Act for this year also and a sum of Rs. 1,58,60,755/- was added back to the income of the assessee. 3.1 The Assessing Officer also found that the assessee was holding closing stock of 9 units/flats at the end of the assessment year 2016-17. Out of these 9 flats, rental income was found to be shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the unsold units were vacant for the entire year and accordingly the income thereon was to be considered at Rs. Nil in view of the provisions of section 23(1)(c) of the IT Act. It was further submitted by LD AR that the case of CIT vs. Ansal Housing Construction, 72 taxmann.com 254 (Delhi) is challenged before the Hon ble Supreme Court. LD AR also placed reliance on the decision passed by the Co-ordinate Bench of this Tribunal in the case of Pride Purple Properties vs. DCIT in ITA No.481/PUN/2022 order dated 12-04-2023. On the basis of above, LD AR requested the Bench to delete the addition of Rs. 7,98,000/- made by the A.O. and sustained by ld. CIT(A)/NFAC. 7. LD DR supported the orders passed by subordinate authorities and requested to confirm the same. The ld. DR further relied on the decision of the Co-ordinate Bench of Mumbai Tribunal in case of Dimple Enterprises vs. DCIT, 154 taxmann.com 653 (Mumbai Trib.). 8. We have heard the ld. Counsel from both the sides and perused the material available on record as well as case laws furnished by both the parties. We find that the Assessing Officer made addition under the head Income from house property on unsold stock of flats held a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the annual value of the property of that previous year in which such taxes are actually paid by him. Explanation. - For the purposes of clause (b) or clause (c) of this sub-section, the amount of actual rent received or receivable by the owner shall not include, subject to such rules as may be made in this behalf, the amount of rent which the owner cannot realise. (2) Where the property consists of a house or part of a house which- (a) is in the occupation of the owner for the purposes of his own residence; or (b) cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him, the annual value of such house or part of the house shall be taken to be nil. (3) The provisions of sub-section (2) shall not apply if,- (a) the house or part of the house is actually let during the whole or any part of the previous year; or (b) any other benefit therefrom is derived by the owner. (4) Where the property referred to in sub-section (2) consists of more than one house- (a) the provisions of that sub-section shall apply only in respect of on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d section 23(5) w.e.f. assessment year 2018-19 only and nowhere it was mentioned that it has been retrospectively made applicable. When the operation of this section was not made retrospective, it is very much clear that the annual value/deemed rental income of property held as stock in trade can be calculated and shall be chargeable to income tax only w.e.f. assessment year 2018-19 and not prior to that. In support of this contention, ld. AR produced before us a copy of the decision passed by the Co-ordinate Bench of this Tribunal in the case of Pride Purple Properties (supra), wherein, the appeal of the assessee is allowed by the Tribunal by observing as under :- 6. In context of impugned AY 2014-15, we note that the Finance Act, 2017 introduced sub-section (5) to section 23 providing that where a property held as 'stock in trade' is not let out during the year, its annual value, after a period of one year or as revised to two years, shall be considered for the purposes of inclusion under the head 'Income from House property. This amendment has been brought out w.e.f. 01-04-2018. Thus, this provision manifestly does not apply to the impugned AY 2014-15, therefore we a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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