Section 24(a) of the Income Tax Act

Income from unsold flats held as stock-in-trade by a builder or developer is assessable as business income, not income from house property, for assessment years prior to the insertion of Section 23(5) of the Income-tax Act.

When determining income from house property under Section 23, the Annual Letable Value (ALV) can be estimated by deeming 7% of the property's value as notional rent, particularly when actual rent or other clear basis for ALV is absent.

The determination of whether share transactions constitute a business activity or an investment depends on the facts of the case. Factors like volume, frequency, and regularity indicate business activity, irrespective of how such transactions are presented in accounts.

The nature of the activity giving rise to income is fundamental in determining the deductibility of expenses. Interest on loans for acquiring properties held as current assets is a deductible business expenditure if incurred for business purposes.

When a builder's business involves constructing and selling property, unsold units are considered stock-in-trade and income derived from them is taxable under the head 'Business Income', not 'Income from House Property'.

A revision order under Section 263 is invalid if the Principal Commissioner passes it without conducting an inquiry or causing one to be made. The revisionary powers under Section 263 are not unfettered and require a proper inquiry.

When an assessment is reopened under Section 263, the Assessing Officer's power to make a fresh assessment is confined only to the specific issues directed by the Commissioner for revision. The Assessing Officer cannot consider other items not part of the revisional direction.

Rental income from unsold flats in a construction business is assessable as income from house property, not business income. Consequently, deductions under section 24(a) are allowable.