Ansal Housing Ltd (formerly known as Ansal Housing and Construction Ltd) V. Deputy Commissioner of Income Tax

ITA/553/2024

AI Insights

The case involves Ansal Housing Ltd, which appealed against the ITAT's decision regarding the tax treatment of unsold flats/spaces. The ITAT had reversed the Commissioner of Income Tax (Appeals)'s decision, which had favored the assessee by treating the income from these properties under 'profits and gains of business or profession' rather than 'income from house property'. The High Court found no substantial question of law arising from the appeal, referencing a prior decision in the assessee's own case which supported the ITAT's position.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 796606 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 14-11-2024
• Assessment Year: misc
• Other Referred Cases: Ansal Housing & Construction Limited v. Assistant Commissioner of Income Tax: [2018] 89 taxmann.com 238 (Delhi)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: SANJAY KUMAR
• Assessee Lawyers: KAVITA JHA; VAIBHAV KULKARNI; AKASH SHUKLA
• Keywords: Annual letting value; Income from house property; Profits and Gains of Business or Profession; Stock-in-Trade; Unsold spaces
• Section: 22

Judgement Text

"$~74 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 553/2024 ANSAL HOUSING LTD (FORMERLY KNOWN AS ANSAL HOUSING AND CONSTRUCTION LTD) .....Appellant Through: Ms Kavita Jha, Sr Advocate with Mr Vaibhav Kulkarni and Mr Akash Shukla, Advocates. versus DEPUTY COMMISSIONER OF INCOME TAX .....Respondent Through: Mr Sanjay Kumar, SSC. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MS. JUSTICE SWARANA KANTA SHARMA O R D E R % 14.11.2024 1. The appellant (hereafter the assessee) has filed the present appeal impugning an order dated 26.07.2024 passed by the learned Income Tax Appellate Tribunal (hereafter the ITAT) in ITA No. 2731/Del/2010 in respect of the assessment year (AY) 2007-08 rendered in the appeal preferred by the Revenue against the order dated 30.03.2010 passed by the learned Commissioner of Income Tax (Appeal)-1 [hereafter the CIT(A)]. 2. The Revenue had challenged the decision of the learned CIT(A) in deleting an addition of ₹58,09,780/- made on account of gross notional Annual Letting Value (ALV) in respect of unsold spaces / flats and treating the same as income from house property. 3. The assessee is engaged in the development of real estate and This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/11/2024 at 14:26:16 contended that the said vacant flats/spaces held by it were stock-in-trade and therefore, Section 22 of the Income Tax Act, 1961 (hereafter the Act) was not applicable. According to the assessee, its income is required to be assessed under the head ‘profits and gains of business or profession’ and not under the head of ‘income from house property’. The said contention was accepted by the learned CIT(A). The relevant extract of the order dated 30.03.2010 is set out below:- “10.After going through the grounds of appeal as well as the order of the appellate Authorities, I am of the view that as the business of the appellant company was construction and sale of immovable property, the income arising from the unsold spaces / flats could only be taxed under the head business income and it was not open to the Assessing Officer to tax the notional value under the head income from house property in respect of flats / spaces lying in the closing stock of the company. It is noticed that the A.O. has based the additions on the ground that department has not accepted the appellate decisions of the higher authorities and that the matter is pending before the Hon'ble High Court of Delhi. Following the decisions of the ITAT and my predecessor CIT (A)- l in the case of appellant for the earlier assessment years the addition of Rs. 82,99,685/- made by the Assessing Officer is deleted.” 4. However, the learned ITAT did not concur with the said view. Notwithstanding, that the assessee held immovable property as a part of the stock-in-trade, the ALV was chargeable to tax under the head of ‘income from house property’. 5. Concededly, this issue stands concluded in favour of the Revenue by this Court in the assessee’s own case in an earlier assessment year - Ansal This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/11/2024 at 14:26:16 Housing & Construction Limited v. Assistant Commissioner of Income Tax: [2018] 89 taxmann.com 238 (Delhi). 6. In view of the above, no substantial question of law arises in the present appeal. The same is, accordingly, dismissed. VIBHU BAKHRU, J SWARANA KANTA SHARMA, J NOVEMBER 14, 2024 M Click here to check corrigendum, if any This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/11/2024 at 14:26:16 "