S. 23 : Income from house property-Builder stock in trade-Deemed notional rent in respect of unsold flats held as stock in trade- Provisions of S. 23(5) are prospective-Addition was deleted. [S. 22, 23(5)]
Allowing the appeal of the assessee the addition made as deemed notional rent in respect of unsold flats held as stock in trade was held to be not justified. Provisions of S. 23(5) are prospective. Followed Pegaus Properties (P) Ltd. v. DCIT (2022) 193 ITD 514 (Mum.)(Trib.), and DCIT v. Bengal Shapoorji Housing Development Pvt. Ltd. (ITA No. 2927/Mum/2019 dt. 13-5-2021).

S. 43CA : Transfer of assets- other than capital assets- Full value of consideration- stock in trade-Agreement value – Stamp valuation –Difference between the consideration value and stamp duty value is less than 10% – No addition can be made – Third proviso inserted by the Finance Act , 2020 in section 50C of the Act is held to be retrospective in operation from 1 -4 2003. [S. 50C]
Held that the difference between the consideration value and stamp duty value is less than 10% hence no addition can be made. Third proviso inserted by the Finance Act, 2020 in section 50C of the Act is held to be retrospective in operation from 1-4-2003. Followed Maria Fernandes Cheryl v. ITO (2021) 187 ITD 738 (Mum.)(Trib.)

S. 115JB : Book profit-Audit qualification-The Assessing Officer cannot ignore or override the Auditors report while determining the Book profit-Entitled for reduction towards an item which is mentioned as an audit qualification in the statutory audit report while computing book profit. [S. 145, Companies Act, 1956, S. 211(6)]
The assessee received the demand notice from Municipal Corporation for payment towards the arrears of property tax. The assessee capitalised the said amount. The Auditor qualified in his report stating that the said property tax is a revenue expenditure hence need to be debited too Profit and loss account in accordance with accounting standards generally accepted in India. The assessee filed revised computation based on the Auditors qualification and reduced the amount while computing Book Profit u/s 115J of the Act. The AO did not allow the said adjustment which was confirmed by the CIT(A). On appeal the Tribunal held that the Assessing Officer cannot ignore or override the Auditors report while determining the Book profit. The assessee is entitled for reduction towards an item which is mentioned as an audit qualification in the statutory audit report while computing book profit. Followed Mukund Ltd. v. ITO (2019) 174 ITD 605 (Mum.)(Trib.). (ITA No. 1953/Mum/2020, 1954/Mum/2020, 11/Mum/ 2021, 12/Mum/2021 Bench ‘E’ dt. 27-6-2022) (AY. 2015 -16, 2017 -18)
Sheth Developers Pvt. Ltd. v. Dy. CIT (Mum.)(Trib.) www.itatonline .org
[Coram : Hon’ble Shri M. Balaganesh, AM and Hon’ble Shri Rahul Chaudhary, JM]