The key points covered in the summary are: Deemed rental income ...

Equality, Consistency & Taxability: Property Income, Capital Gains & Joint Development Contracts.

Case Laws     Income Tax

September 5, 2024

The key points covered in the summary are: Deemed rental income from flats owned by the assessee, allotted through a joint development agreement, was deleted by CIT(A) following the principle of equality before law and consistent treatment for co-owners. The ITAT upheld this based on the Supreme Court's ruling in Union of India v. Kaumudini Narayan Dalal, which mandates uniform approach by Revenue for parties to the same transaction. On merits, the ITAT referred to the case of Sachin R Tendulkar, which decided in favor of the assessee on the issue of taxability of deemed rental income from flats kept for investment. Regarding the nature of capital gains on sale of flats (long-term or short-term), the ITAT applied the principle of consistency formulated in Radhasoami Satsang case, as the gains from the same land were earlier assessed as long-term capital gains by the department. The ITAT upheld CIT(A)'s decision to treat the gains as long-term. On the issue of taxability of income from alleged plant and machinery, the ITAT observed lack of clear findings by AO/CIT(A) on monthly rent and TDS deducted. It remitted the matter to AO for fresh examination, directing to tax the income as income from house property.

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