M/S REPTON PROPERTIES PVT LTD.,MUMBAI vs ITO 5(3)(1), MUMBAI

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: HON’BLE SHRI MAHAVIR SINGH, VP & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Appellant: Shri Nikhil Pathak, Ld. AR

For Respondent: Shri Vinay Sinha, Ld. CIT-DR

O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2012-13 arises out of the order of learned Commissioner of Income-Tax (Appeals)-10, Mumbai [CIT(A)], dated 03/10/2018 in the matter of assessment framed by Ld. Assessing Officer (AO) u/s 143(3) of the Act on 14/11/2014.

The only issue under the appeal is addition of notional rent on unsold flats held as stock-in-trade. The assessee being resident 2 M/s Repton Properties Pvt. Ltd. Assessment Year: 2012-13 corporate assessee is stated to be engaged as real estate builders & contractors etc. During assessment proceedings, Ld. AO noted that the assessee had closing inventories of unsold flats. Accordingly, relying upon the decision of Hon’ble Delhi High Court in the case of CIT V/s Ansal Housing Finance & Leasing Co. Ltd. (2013; 29 taxmann.com 303), Ld. AO computed notional rent of 8% on unsold flats which came to Rs.62.26 Lacs. After providing for statutory deduction of 30%, net notional rental income was added to the income of the assessee under the head Income from House Property. The Ld. CIT(A), while confirming the action of Ld. AO, directed him to adopt the rental value of Rs.119/- per square feet. Aggrieved, the assessee is in further appeal before us.

We find that this issue has been decided in assessee’s favor in various decisions of this Tribunal, few of which are as follows: - Appellant Respondent Date A.Y. C.R. Developments Pvt. JCIT-8(1)(OSD), 4277/Mum/2012 13.05.2015 2009-10 Ltd. Mumbai Runwal Constructions ACIT Central Circle- 5408/Mum/2016 22.02.2018 2012-13 4(1) Mumbai. Progressive Homes ACIT, Circle -4(4), 5082/MUM/2016 16.05.2018 2012-13 Mumbai. ACIT, Mumbai. Haware Construction 3321/MUM/2016 31.08.2018 2009-10 Pvt. Ltd. 3172/Mum/2016 2011 -12 Haware Engineers & DCIT, Central Circle 7155/Mum/2016 10.10.2018 2012-13 Builders Pvt. Ltd, -4(2), Mumbai. Ferani Hotels Pvt. Ltd. ACIT, Central Circle - 6332/M/2016 21.12.2018 2012-13 4(1), Mumbai. Palm Grove Beach Hotels DCIT, CC 4(1) 1973/M/2019 01.07.2021 2014-15 Pvt. Ltd. Arihant Estate Pvt. Ltd. ITO 346/M/2019 06.01.2021 2014-15 In all the above decisions, it has been held that addition of notional rental value on unsold inventories of flats in case of real estate builder/

M/S REPTON PROPERTIES PVT LTD.,MUMBAI vs. ITO 5(3)(1), MUMBAI