OBEROI REALTY LIMITED,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE -4(1), MUMBAI

Facts

The appeals concern the addition of annual letting value of unsold properties held as stock-in-trade by the assessee, a builder and developer. The Assessing Officer (AO) added this value, and the Commissioner of Income-tax (Appeals) partly confirmed it. The Revenue also appealed regarding disallowance under Section 14A and the ALV computation.

Held

The Tribunal held that for Assessment Years prior to 2018-19, unsold properties held as stock-in-trade could be taxed on notional annual letting value. However, it followed a coordinate bench decision that for AY 2011-12, the issue was covered by a previous order allowing the appeal. For Section 14A, the Tribunal upheld the CIT(A)'s decision based on a settlement reached by the assessee.

Key Issues

Whether unsold properties held as stock-in-trade are taxable on notional rent before the applicability of Section 23(5), and the validity of disallowance under Section 14A in light of a settlement.