SHRI JAIPRAKASH KHANCHAND ASWANI,SURAT vs. THE ADDL.CIT, RANGE-2, SURAT

ITA 2237/AHD/2015Status: DisposedITAT Surat18 December 2018AY 2011-1210 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that properties held as stock-in-trade cannot be taxed as income from house property, as any income derived from them is business income. The Tribunal also allowed the claim for interest expenses, considering it a business expenditure due to sufficient capital and nexus with business activities.

What were the facts?

The assessee, engaged in selling shops and flats, treated unsold properties as stock-in-trade. The AO taxed these unsold properties under 'Income from House Property' by deeming rental income, which was upheld by the CIT(A). The assessee also claimed interest expenses which were disallowed by the AO for lack of details.

What were the issues?

Whether unsold stock-in-trade properties can be taxed as income from house property, and whether interest expenses claimed by the assessee are allowable as business expenditure.

Which sections of the Income-tax Act were involved?

Section 23

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Before: C .M. GARG & O. P. MEENA

For Appellant: Shri Rajesh Shah – CA, Shri Vinod Kumar – Sr.DR
Hearing: 18.12.2018

PER O. P. MEENA, AM

1.

This appeal at the instance of the Assessee is directed against an order of learned Commissioner of Income tax (Appeals)-II, Surat [in short CIT(A)] dated 06.05.2015 for the Assessment Year 2011-12. 2. Ground No. 1 relates to confirmation of addition of Rs.15,75,840/- on deemed income from house property lying in stock- in trade.

Jaiprakash Khanchand Aswani vs. Addl.C

The order continues below.

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