Tata Housing development company Ltd., Mumbai vs. PR. CIT-8, Mumbai

Tata Housing Development Company Ltd. has appealed to the Income Tax Appellate Tribunal against orders issued by the Principal Commissioner of Income Tax (PCIT). The PCIT invoked revisional powers under Section 263, stating that the Assessing Officer erred by not adding notional rental income from vacant flats to the company's total income. This decision was deemed erroneous and prejudicial to the revenue's interests, prompting the company's appeal.

IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH “E”, MUMBAI
BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER &
SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER
ITA NO.3492/MUM/2019 (A.Y.2015-16)
ITA NO.3493/MUM/2019 (A.Y.2014-15)

TATA HOUSING DEVELOPMENT
COMPANY LIMITED,
‘E’ BLOCK, VOLTAS COMPOUND,
T.B. KADAM MARG, CHINCHPOKLI,
MUMBAI 400 033
PAN: AAACT0191Q
Appellant

Vs.

The PCIT- 8,
Room No.611, Aaykar Bhavan,
M.K.Road, Mumbai 400 020
Respondent

Appellant by : Shri Madhur Agarwal
Respondent by : Shri R. Manjunatha Swamy

Date of hearing : 24/09/2020
Date of pronouncement : 28/09/2020

ORDER
PER VIKAS

PER VIKAS AWASTHY, JM:

These two appeals by the assessee/appellant are directed against the orders of Principal Commissioner of Income Tax -8, Mumbai (in short ‘the PCIT’) passed under section 263 of the Income tax Act,1961 (herein after referred to as ‘the Act’) for the Assessment Years 2014-15 and 2015-16, respectively. Both the impugned orders are of even date i.e. 30/03/2019. Since, the grounds raised in both the appeals and the facts giving rise to present appeals are identical, these appeals are taken up together for adjudication and are decided by this common order. For the sake of convenience the facts are narrated from the appeal in ITA No.3493/Mum/2019
for the assessment year 2014-15.

2. The assessee/appellant is a real estate developer. The assessee filed its return of income for the assessment year 2014-15 on 29/11/2014 declaring total income of Rs.4,01,24,090/-. The assessee had declared income from the business of real estate development as ‘Business Income’. The Assessing Officer in scrutiny assessment proceedings made disallowance under section
36(1)(iii) and 14A of the Act and determined the taxable income of the assessee as Rs.23,52,81,848/- vide assessment order dated 29/12/2016. Thereafter, the PCIT invoked revisional jurisdiction under section 263 of the Act and issued show cause notice dated 15/03/2019. The PCIT following the decision of Hon’ble Delhi High Court in the case of CIT vs. Ansal Housing Finance & Leasing Co. Ltd., reported as 354 ITR 180 held that notional rental income on vacant flats should have been added to the total income of the
assessee by the Assessing Officer. Since, the Assessing Officer failed to consider this aspect, the assessment order is erroneous as well as prejudicial to the interest of revenue. Aggrieved by the order passed under section 263 of the Act, the assessee is in appeal before the Tribunal.

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