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| The Tax Publishers2020 TaxPub(DT) 3875 (Mum-Trib) INCOME TAX ACT, 1961
Section 263
AO was well aware of the fact that assessee was engaged in real estate development and had inventory of completed flats at the end of financial year and after applying his mind on the issue, AO concluded that no addition was required to be made in respect of notional rental value of flats held as stock-in-trade which was one of the possible views and, therefore, assessment order could not be treated as erroneous and prejudicial, especially when sub-section (5) to section 23 was inserted by Finance Act, 2017 with effect from 1-4-2018 had prospective application.
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Revision under section 263 - Erroneous and prejudicial order - No addition of notional rental income from flats held as stock-in-trade -
Assesse was a real estate developer. PCIT held assessment order as erroneous and prejudicial to the interest of revenue on the ground of AO having made no addition of notional rental income from flats held as stock in trade. Held: It was emanating from documents on record that AO was well aware of the fact that assessee was engaged in real estate development and had inventory of completed flats at the end of financial year. AO applied his mind on the issue and thereafter came to the conclusion that no addition was required to be made in respect of notional rental value of flats held as stock-in-trace. Also, two views were possible and AO had taken one view with which PCIT did not agree, however, this could not make assessment order as erroneous and prejudicial, especially when sub-section (5) to section 23 was inserted by Finance Act, 2017 with effect from 1-4-2018 had prospective application.
REFERRED :
FAVOUR : in assessee's favour
A.Y. : 2015-16 & 2014-15
IN THE ITAT, MUMBAI 'E' BENCH
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