The Tax Publishers2013 TaxPub(DT) 0681 (Del-HC) : (2013) 050 (I) ITCL 0324 : (2013) 354 ITR 0180 : (2013) 213 TAXMAN 0143 : (2013) 088 DTR 0227

INCOME TAX ACT, 1961

--Income from house property--Annual value Computation --Assessee was engaged in the business of development of mini-townships, construction of house property, commercial and shop complexes, etc. In the assessment completed for the year under consideration. Assessing officer assessee the ALV of flats which assessee had constructed, but were lying unsold under the head 'Income from house property'. Held: The levy of income-tax in the case of one holding house property is premised not on whether assessee carried on business, as landlord, but on the ownership. The incidence of charge is because of the fact of ownership. Undoubtedly, the decision in CIT v. Vikram Cotton Mills Ltd. AIR 1988 SC 460 indicates that in every case, the court has to discern the intention of assessee. In this case the intention of assessee was to hold the properties till they were sold. The capacity of being an owner was not diminished one whit, because assessee carried on business of developing building and selling flats in housing estates. The argument that income-tax is levied not on the actual receipt (which never arose in this case) but on a notional basis, i.e., ALV and that it is therefore not sanctioned by law, in the opinion of the Court is meritless. ALV is a method to arrive at a figure on the basis of which the impost is to be effectuated. The existence of an artificial method itself would not mean that levy is impermissible. [Para 3]

Income Tax Act, 1961, Section 23

In The Delhi High Court

S. Ravindra Bhat & R.V. Easwar

CIT v. Ansal Housing Finance And Leasing Co. Ltd.

ITA 18/99, 56,57,105,107,109,114,177/01, 88/02 111, 321,498/03,227,336,529,690/04,212/05

31 October, 2012

JUDGEMENT

S. Ravindra Bhat

The following questions of law were framed in relation to the above appeals, and in respect of which the present common judgment is delivered :

(1) Whether in the circumstances the ITAT is correct in holding that expenses incurred on the maintenance of accommodation provided to its employees and executives in Iraq is not disallowable?

(2) Whether on the facts and in the circumstances of the case, the Honble ITAT is correct in holding that the depreciation claimed on motor cars purchased and used in Iraq is allowable to the assessee?

(3) Whether on the facts and in the circumstances of the case, the learned ITAT is correct in holding that the expenses claimed by the assessee under the heads provisions for completed expenses and expenses incurred on completed project is allowable even though the Department has not accepted the system of accounting followed by the assessee?

(4) Whether the assessee was liable to pay income tax on the annual letting value of unsold flats owned by it under the head 'income from house property'?

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT

TaxPublishers.in

'Kedarnath', 7, Avadh Vihar, Near Nirali Dhani,

Chopasni Road

Jodhpur - 342 008 (Rajasthan) INDIA

Phones : 9785602619 (11 am - 5 pm)

E-Mail : mail@taxpublishers.in / mail.taxpublishers@gmail.com