SHREE INFRA,SURAT vs. PR. CIT-1, SURAT, SURAT

ITA 601/SRT/2024Status: DisposedITAT Surat22 July 2025AY 2018-19Bench: SHRI SIDDHARTHA NAUTIYAL (Judicial Member), SHRI BIJAYANANDA PRUSETH (Accountant Member)1 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal observed that no specific inquiry was made by the AO regarding the applicability of Section 23(5) of the Act concerning notional rent on unsold stock-in-trade. The PCIT found this to be an omission, rendering the assessment order erroneous and prejudicial to the revenue. The Tribunal agreed that there was a lack of inquiry by the AO on this aspect.

What were the facts?

The assessee filed a 'Nil' income return for AY 2018-19. The case was selected for scrutiny due to 'Income from Real Estate Business'. The Assessing Officer (AO) completed the assessment accepting the returned income. However, the Principal Commissioner of Income Tax (PCIT) initiated proceedings under Section 263, alleging that the AO failed to consider the notional rental income on unsold flats, which was a specific reason for scrutiny.

What were the issues?

Whether the AO made a proper inquiry regarding the applicability of Section 23(5) of the Act for taxing notional rental income on unsold flats.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 263,Section 23(1),Section 23(5)

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Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: SHRI SIDDHARTHA NAUTIYAL & SHRI BIJAYANANDA PRUSETH

For Appellant: Shri Suresh K Kabra, CA
For Respondent: Shri Aashish Pophare, CIT DR
Pronounced: 22.07.2025

PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:

This appeal has been filed by the Assessee against the order passed by the Ld. Principal Commissioner of Income Tax, Surat-1 (in short “Ld. PCIT”), Surat vide order dated 23.02.2024 passed for A.Y. 2018-19. 2. At the outset, we observe that the appeal is time barred by 22 days. The delay of 22 days is condoned on due consideration of facts and owing to smallness of delay causing no perceptible prejudice to other side.

3.

The assessee has raised the following grounds of appeal:

“1. The Ld. PCIT-1 has erred and was not just and proper on the facts of the case and in law in conside

The order continues below.

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