| The Tax Publishers2023 TaxPub(DT) 1010 (Pune-Trib) INCOME TAX ACT, 1961
Section 22 Section 263
Where flats/bungalows were occupied by assessee-owner, business of property development was carried on by assessee; occupation of the flats, etc., was for the purpose of business; and profits of such business were chargeable to income-tax, no income could be said to have accrued to assessee from unsold flats available as stock-in-trade.
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Income from house property - Accrual of income from unsold flats - Position prior to 1-4-2018 -
Assessee was a builder and developer. CIT invoked revisionary power under section 263 by holding that assessment order was erroneous and prejudicial to the interest of revenue because as per CIT, annual letting value of unsold flats/bungalows lying as stock-in-trade at the end of the year was income chargeable to tax under the head 'Income from house property'. Held: Flats/bungalows were occupied by assessee-owner, business of property development was carried on by assessee; occupation of the flats, etc., was for the purpose of business; and profits of such business were chargeable to income-tax. Ergo, all the four conditions for exclusion from section 22 were cumulatively satisfied. Further, amendment brought by the Finance Act, 2017 in sub-section (5) of section 23 w.e.f. 1-4-2018 was prospective and, therefore, not applicable during the year under consideration. In the absence of the applicability of such an amendment, no income could be said to have accrued to assessee from unsold flats available as stock-in-trade and, therefore, assessment order was neither erroneous nor prejudicial to the interest of revenue.
Relied:CIT v. Neha Builders (Pvt.) Ltd. (2008) 296 ITR 661(Guj) : 2008 TaxPub(DT) 294 (Guj-HC) and Cosmopolis Construction, Pune v. ITO dated 18-6-2018 [ITA NO. 230 & 231/Pun/2018].
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2014-15
INCOME TAX ACT, 1961
Section 80-IB(10) Section 263
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