FCS Deepak Pratap Singh
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Unique Estates Development Co. Ltd Vs. DCIT (Income Tax Appellate Tribunal, Mumbai) ITA No. 4598/Mum/2019 | 22-03-2021 SUB: INCOME FROM UNSOLD FLATS SHALL BE TREATED AS BUSINESS INCOME OF THE DEVELOPER AND NO INCOME FROM HOUSE PROPERTY ON THE BASIS OF ANNUAL LETTING VALUE OR NOTIONAL VALUE OF R
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FAQ :
Income from unsold flats held by property developers is treated as business income, not income from house property.
No, the Assessing Officer cannot calculate notional rental income based on Annual Letting Value (ALV) for unsold flats that are considered stock-in-trade.
The justification is that unsold flats are considered stock-in-trade for a developer, and income arising from them is part of their core business activities.
Yes, the ruling applies to vacant flats or units that are part of a developer's stock-in-trade at the end of the financial year.
The Income Tax Appellate Tribunal ruled in favour of the assessee, directing the deletion of additions made on account of notional income from unsold flats.
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