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Income Tax Appellate Tribunal, PUNE “B” BENCH, PUNE
Before: HON’BLE SHRI S. S. GODARA & SHRI G. D. PADMAHSHALI
आदेश / ORDER PER G. D. PADMAHSHALI, AM; This appeal is directed against the order of Commissioner of Income Tax(A)-11, [‘CIT(A)’] dt. 25/01/2022 passed u/s 250 of the Income-tax Act, 1961 [‘the Act’] in relation to assessment year [‘AY’] 2014-15.
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Pride Purple Properties, ITA No. 481/PUN/2022 A.Y. : 2014-15 2. The only issue raised in this appeal is against the confirmation of the addition on account of determination of annual letting value in respect of unsold residential units lying with the builder assessee.
Briefly stated the facts of the case are that; 3.1 the assessee is a firm engaged in the business of construction & sale of residential flats, which at the closure of the financial was holding 03 residential units as its ‘stock-in-trade’ which were neither let-out nor occupied for its business and hence no income therefrom offered to tax in the return of income filed u/s 139(1) of the Act on 30/09/2014.
3.2 The Ld. Dy. CIT, Circle -1(1), Pune [‘AO’] considering the provisions of section 23(4) of the Act determined the annual letting value 03 residential unit @ ₹2,52,000/- after allowing 30% standard deduction u/s 24(a) and added the same to the total income while assessing income u/s 143(3) of the Act by an order dt. 30/11/2016.
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Pride Purple Properties, ITA No. 481/PUN/2022 A.Y. : 2014-15 3.3 The Ld. CIT(A) placing reliance on the decision of Hon’ble Delhi High Court in the case of ‘CIT Vs Ansal Housing Finance & Leasing Co. Ltd.’ reported in 354 ITR 213, affirmed the addition.
Aggrieved assessee in present case seeking reversal of impugned addition on the substantive ground of inapplicability of provisions of section 23 of the Act.
After hearing to rival contentions of both the parties; and subject to the provisions of rule 18 of ITAT, Rules perused the material placed on record, case laws relied upon by the appellant as well the respondent and duly considered the facts of the case in the light of settled legal position forewarned to parties present.
In context of impugned AY 2014-15, we note that the Finance Act, 2017 introduced sub-section (5) to section 23 providing that where a property held as ‘stock in trade’ is not let out during the year, its annual value,
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Pride Purple Properties, ITA No. 481/PUN/2022 A.Y. : 2014-15 after a period of one year or as revised to two years, shall be considered for the purposes of inclusion under the head `Income from House property’. This amendment has been brought out w.e.f. 01-04-2018. Thus, this provision manifestly does not apply to the impugned AY 2014-15, therefore we are of the considered view that the impugned addition of ₹2,52,000/- made and as sustained in the first appeal, is not called for, thus is directed to be deleted.
In result the appeal of the assessee is allowed. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Tuesday 12th day of April, 2023.
-S/d- -S/d- S. S. GODARA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिन ांक / Dated : 16th day of May, 2023. Ashwini आदेश की प्रधिधलधप अग्रेधिि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A)-11, Pune (MH-India) 4. The Pr.CIT(Central), Pune 5. DR, ITAT, Bench ‘B’, Pune 6. ग र्डफ़ इल / Guard File. आिेश नुस र / By Order वररष्ठ दनजी सदिव / Sr. Private Secretary आयकर अपीलीय न्य य दिकरण, पुणे / ITAT, Pune.
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