S. 23 : Income from house property- Annual value-Builder-Stock in trade- Addition of notional rent estimated by the Assessing Officer in respect of unsold flats which are held as stock-in trade is held to be not valid. [S. 22, 23(5), 24]

The assessee is in the business of construction of housing flats . The Assessing Officer assessed the unsold stock in trade of the assessee under section 22 of the income – tax Act 1961 on notional basis by estimating 8% of the value of closing stock shown the books of account . CIT(A) deleted the addition . On appeal by the revenue, considering all the case laws on the subject, Honourable Tribunal affirmed the view of the CIT(A). Honourable Appellate Tribunal also referred the amendments by the Finance Act, 2017, w.e.f. 1-4-2018. (AY. 2013-14 )

Case laws referred in the order are;

1. Osho Developers v. ACIT, ITA Nos. 2372 & 1860/M/2019, A.Ys. 2014-15 & 2015-16, dt. 3/11/2020 (Mum.) (Trib.)
2. C.R. Developments Pvt. Ltd. v. JCIT ITA No. 4277/M/2012 dt. 13/5/2015 (Mum.)(Trib.)
3. Runawal Constructions v. ACIT ITA No. 5408/M/2016 dt. 22/2/2018 (Mum.)(Trib.)
4. CIT v. Neha Builders (P) Ltd. (2008) 296 ITR 661 (Guj.)(HC)
5. CIT v. Ansal Housing Finance & Leasing Company Ltd. (2013) 354 ITR 180 (Delhi)(HC)