DCIT CENTRAL CIRCLE-4 (1), MUMBAI vs. OBEROI REALTY LIMITED, MUMBAI

Facts

The appeals concern the addition of Annual Let Out Value of unsold properties held as stock-in-trade, and disallowance under Section 14A. The assessee, a builder and developer, argued that the annual value should be nil for properties held as stock-in-trade, citing a specific amendment to Section 23 of the Income Tax Act.

Held

The Tribunal held that for properties held as stock-in-trade and not let out, the annual value is to be considered nil for a period up to one year from the end of the financial year of completion, as per the amendment to Section 23. For the issue of disallowance under Section 14A, the Tribunal upheld the conclusion of the CIT(A) based on a settlement before the Income Tax Settlement Commission.

Key Issues

Whether the annual value of unsold properties held as stock-in-trade is taxable, and whether disallowances under Section 14A were correctly computed and sustained.