RAMESH DUNGARSHI SHAH,MUMBAI vs. DEPUTY COMMISSIONER OF INOCME TAX, CIRCLE-3, , MUMBAI

ITA 1220/MUM/2024Status: DisposedITAT Mumbai14 May 2025AY 2015-16Bench: MS. KAVITHA RAJAGOPAL (Judicial Member), SHRI. GIRISH AGARWAL (Accountant Member)1 pages
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What did the Tribunal hold?

The Tribunal held that notional rent on unsold flats held as stock-in-trade is taxable as 'Income from house property' even before the insertion of Section 23(5) of the Act. However, the determination of the annual letting value (ALV) for this notional rent needs to be in accordance with municipal laws and principles laid down by the jurisdictional High Court.

What were the facts?

The assessee, a builder and developer, had unsold shops/flats held as stock-in-trade. The Assessing Officer (AO) made an addition on account of notional rent for these vacant units under the head 'Income from house property'. The CIT(A) upheld this addition.

What were the issues?

Whether notional rent on unsold stock-in-trade flats is taxable as income from house property, and if so, how the annual letting value should be determined.

Which sections of the Income-tax Act were involved?

Section 23(1)(a),Section 23(4)(b),Section 23(5)

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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

For Appellant: Shri. Devendra Jain, Adv. (Virtually), Shri. Asif Karmali (Sr. DR)
Pronounced: 14.05.2025

Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals), Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2015-16. 2. It is observed that the assessee has filed this present appeal with a delay of 47 days beyond the period of limitation for which the assessee has filed an application for condoning the delay along with the reasons specified for the delay. After hearing the rival contentions, we deem it fit to c

The order continues below.

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