JANTA LAND PROMOTERS PRIVATE LIMITED ,MOHALI vs. INCOME TAX OFFICER WARD 6(1) CHANDIGARH , MOHALI

ITA 907/CHANDI/2024Status: DisposedITAT Chandigarh30 July 2025AY 2017-18Bench: SHRI RAJPAL YADAV (Vice President), SHRI KRINWANT SAHAY (Accountant Member)8 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal remitted the issue of PF/ESI contributions (Rs. 4,29,357/-) paid within the grace period to the AO for verification. For the notional rental income from unsold flats (Rs. 13,81,464/-), the Tribunal, following the Gujarat High Court and other ITAT decisions, held that such flats, being stock-in-trade, generate 'Income from Business' (Section 28) and not 'Income from House Property' (Section 22/23). As no actual rental income was earned, this addition was deleted.

What were the facts?

The assessee, M/s Janta Land Promoters Pvt.Ltd., appealed against the CIT's order for AY 2017-18. The appeal, initially time-barred, was condoned. The key issues involved disallowance of employees' contribution to PF/ESI under Section 36(1)(va) and the addition of notional rental income from unsold flats held as stock-in-trade.

What were the issues?

1. Whether employees' contributions to PF/ESI paid within the grace period but after the statutory due date are disallowable under Section 36(1)(va). 2. Whether notional rental income from unsold flats held as stock-in-trade can be assessed under 'Income from House Property' or 'Income from Business'.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 253(5),Section 143(3),Section 250(6),Section 22,Section 23,Section 23(5),Section 28

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Income Tax Appellate Tribunal, CHANDIGARH

Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY

For Appellant: Shri Pankaj Bhalla, CA
For Respondent: Shri Vivek Vardhan, Addl. CIT, Sr.DR
Hearing: 07.05.2025Pronounced: 30.07.2025

PER RAJPAL YADAV, VP

The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax [in short ‘the CIT’] dated 31.05.2024 passed for assessment year 2017-18. 2. The Registry has pointed out that appeal is time barred by 25 days. The assessee has filed an application u/s 253(5) of the ITA 907/CHD/2024 A.Y. 2017-18 2

Income Tax Act. After perusing the application of the assessee running from page 1 to 5, we are satisfied that it was prevented by sufficient reasons for

The order continues below.

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