RAVIKIRAN ENTERPRISES,MUMBAI vs. ASSISTANT COMMISIONER, CIRCLE 32(1), MUMBAI

ITA 7147/MUM/2025Status: DisposedITAT Mumbai09 July 2026AY 2017-1811 pages
AI SummaryAllowed

What were the facts?

The assessee, a builder, held unsold flats as stock-in-trade after obtaining an occupancy certificate. The Assessing Officer sought to tax the notional rental income of these flats under 'Income from House Property'. The CIT(A) upheld this addition, stating lack of evidence for business use and that Section 23(5) was prospective.

What did the Tribunal hold?

The Tribunal held that prior to the insertion of Section 23(5) of the Income Tax Act, 1961, there was no specific statutory provision to tax the notional annual letting value of completed but unsold stock-in-trade held by builders. Therefore, the addition made by the Assessing Officer and sustained by the CIT(A) was unsustainable.

What were the issues?

Whether notional rental income from unsold stock-in-trade held by a builder can be taxed under 'Income from House Property' for assessment years prior to the insertion of Section 23(5).

Which sections of the Income-tax Act were involved?

Section 22,Section 23,Section 23(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI VIKRAM SINGH YADAV & SHRI SIDDHARTHA NAUTIYAL

For Respondent: Shri Prasma Prakash Tewari Sr.DR

PERSHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:

This appeal is filed by the Assessee against the order of Ld. The Commissioner of Income Tax (Appeals), NFAC, dated 22-Sep-2025 for the Assessment Year 2019-20. The assessee has raised the following grounds of appeal:

ITA 7147-MUM-2025 RAVI KIRAN ENTERPRISES

1.

Non-Applicability of Section 22 of the Income Tax Act, 1961 : The Learned. CIT(A) has e

The order continues below.

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