TATA HOUSING DEVELOPMENT COMPANY LTD., MUMBAI V. PR. CIT- 8 , MUMBAI

ITA 3492/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6142 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2015-2016
• Appeal Filed On: 22-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. MANJUNATHA SWAMY
• Keywords: Business income; Revision of order; Assessment record
• Section: 263; 142(1); 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI , # ,$% $& BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER . 3492 / /201 9 (. . 2015-16 ) ITA NO.3492/MUM/2019 (A.Y.2015-16) . 3493 / /201 9 (. . 2014-15 ) 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 ..... /0/ RESPONDENT .1/ APPELLANT BY : SHRI MADHUR AGARWAL /01/ RESPONDENT BY : SHRI R. MANJUNATHA SWAMY 20 / DATE OF HEARING : 24/09/2020 34 20 / DATE OF PRONOUNCEMENT : 28/09/2020 $/ ORDER PER VIKAS AWASTHY, JM : THESE TWO APPEALS BY THE ASSESSEE/APPELLANT ARE D IRECTED AGAINST THE ORDERS OF PRINCIPAL COMMISSIONER OF INCOME TAX -8, MUMBAI (IN SHORT THE 2 ITA NO.3492/MUM/2019 (A.Y.2015-16) ITA NO.3493/MUM/2019 (A.Y.2014-15) 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 T HE FACTS GIVING RISE TO PRESENT APPEALS ARE IDENTICAL, THESE APPEALS ARE TA KEN 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 DEVELOPE R. 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 IN COME. THE ASSESSING OFFICER IN SCRUTINY ASSESSMENT PROCEEDINGS MADE DIS ALLOWANCE UNDER SECTION 36(1)(III) AND 14A OF THE ACT AND DETERMINED THE TA XABLE INCOME OF THE ASSESSEE AS RS.23,52,81,848/- VIDE ASSESSMENT ORDER DATED 29/12/2016. THEREAFTER, THE PCIT INVOKED REVISIONAL JURISDICTIO N UNDER SECTION 263 OF THE ACT AND ISSUED SHOW CAUSE NOTICE DATED 15/03/2019. THE PCIT FOLLOWING THE DECISION OF HONBLE 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 TH E TOTAL INCOME OF THE ASSESSEE BY THE ASSESSING OFFICER. SINCE, THE ASSES SING OFFICER FAILED TO CONSIDER THIS ASPECT, THE ASSESSMENT ORDER IS ERRONEOUS AS W ELL 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. 3 ITA NO.3492/MUM/2019 (A.Y.2015-16) ITA NO.3493/MUM/2019 (A.Y.2014-15) 3. SHRI MADHUR AGARWAL, APPEARING ON BEHALF OF THE ASSESSEE/APPELLANT SUBMITTED THAT THE PCIT HAS ERRED IN INVOKING REVIS IONAL POWERS. THE ASSESSING OFFICER IN ASSESSMENT PROCEEDINGS HAD APPLIED HIS M IND AND AFTER BEING SATISFIED MADE NO ADDITION IN RESPECT OF NOTIONAL A NNUAL LETTING VALUE ON UNSOLD FLATS HELD AS STOCK IN TRADE. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE NOTICE ISSUED BY ASSESSING OFFICER UNDER SECTION 14 2(1) R.W.S. 129 OF THE ACT DATED 15/06/2016 AT PAGES 109 AND 110 OF THE PAPER BOOK. THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT A PER USAL OF THE NOTICE WOULD SHOW THAT AT SL.NO. 9-A A QUERY WAS RAISED BY THE A SSESSING OFFICER SEEKING EXPLANATION ON LARGE INVESTMENTS MADE IN THE PROPER TY DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2014-15. FURTHER, A T SL. NO.9-N, THE ASSESSING OFFICER MADE SPECIFIC QUERY REGARDING DIFFERENCE IN THE CLOSING STOCK SHOWN IN BALANCE SHEET AND P&L ACCOUNT FOR THE IMPUGNED YEAR AS PER RETURN OF INCOME. THE ASSESSEE FILED REPLY TO THE SAID NOTIC E ON 22/12/2016 (AT PAGE 112 TO 124 OF THE PAPER BOOK). IN REPLY THE ASSESSEE FU RNISHED DETAILS OF THE BUSINESS AND ALSO EXPLAINED THE REASONS FOR DIFFERE NCE IN THE CLOSING STOCK, AS SHOWN IN THE BALANCE SHEET AND P&L ACCOUNT FOR THE IMPUGNED FINANCIAL YEAR. THE ASSESSING OFFICER WAS WELL AWARE ABOUT THE NATU RE OF BUSINESS OF THE ASSESSEE AND THE CLOSING INVENTORY OF THE FLATS. TH E ASSESSING OFFICER AFTER HAVING APPLIED HIS MIND MADE NO ADDITION IN RESPECT OF NOTIONAL ANNUAL LETTING VALUE OF FLATS HELD AS STOCK. THE ASSESSEE HAS BEEN CONSISTENTLY DECLARING INCOME FROM REAL ESTATE DEVELOPMENT BUSINESS AS BU SINESS INCOME. AND THERE HAS BEEN RECODED INVENTORY OF COMPLETED FLATS IN EV ERY FINANCIAL YEAR. THE ASSESSING OFFICER HAS NEVER MADE ADDITION ON ACCOUN T OF NOTIONAL RENTAL VALUE OF COMPLETED FLATS HELD AS STOCK. TO SUBSTANTIATE H IS CONTENTS, THE LD. COUNSEL 4 ITA NO.3492/MUM/2019 (A.Y.2015-16) ITA NO.3493/MUM/2019 (A.Y.2014-15) FILED COPIES OF ASSESSMENT ORDERS FOR AY 2010-11 TO 2013-14. IN THE IMPUGNED ASSESSMENT YEAR AS WELL, THE ASSESSING OFFICER AFTE R EXAMINING THE FACTS AND APPLICATION OF MIND MADE NO ADDITION OF NOTIONAL RE NTAL INCOME FROM FLATS HELD AS STOCK IN TRADE. THE LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT THE PCIT HAS INVOKED PROVISIONS OF SECTION 263 ONLY BY PLACING R ELIANCE ON THE DECISION OF CIT VS. ANSAL HOUSING FINANCE & LEASING CO. LTD. (S UPRA). THE LD. COUNSEL POINTED HONBLE GUJARAT HIGH COURT IN THE CASE OF C IT VS. NEHA BUILDERS PVT. LTD., 296 ITR 361 HAS TAKEN A CONTRARY VIEW HOLDING THAT ANY INCOME DERIVED FROM PROPERTY HELD AS STOCK WOULD BE BUSINESS INCOM E AND NOT INCOME FROM HOUSE PROPERTY. 3.1. THE LD. COUNSEL FOR THE ASSESSEE ASSERTED THA T TWO DIVERGENT VIEWS FROM NON-JURISDICTIONAL HIGH COURTS ON THE ISSUE WERE AV AILABLE ON THE DATE OF PASSING OF THE ASSESSMENT ORDER, THE ASSESSING OFFI CER TOOK ONE OF THE POSSIBLE VIEW. THE ASSESSMENT ORDER WOULD NOT BECOME ERRONE OUS IF THE PCIT DOES NOT SUBSCRIBE TO THE VIEW OF ASSESSING OFFICER AND PREF ERS THE OTHER POSSIBLE VIEW. THE TWIN CONDITIONS FOR INVOKING PROVISIONS OF SEC TION 263 OF THE ACT ARE NOT SATISFIED IN THE PRESENT CASE. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON FOLLOWING DECISIONS TO CONTEND THAT NOTIONAL ANNUAL LETTING VALUE OF UNSOLD FLATS HELD AS STOCK-IN-TRADE IS A DEBATABLE ISSUE, THEREF ORE, SECTION 263 OF THE ACT COULD NOT BE INVOKED:- (1) S D CORPORATION (P) LTD. VS. PR.CIT, 102 TAXMA NN.COM 226(MUM) (2) ARCHIE CREATION VS. PR. CIT, ITA NO.4449/M/201 9, A.Y. 2014-15 DECIDED ON 13/07/2020. 5 ITA NO.3492/MUM/2019 (A.Y.2015-16) ITA NO.3493/MUM/2019 (A.Y.2014-15) THE LD. COUNSEL POINTED THAT IN BOTH THE AFORESAID CASES, THE PCIT INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT BY PLACING REL IANCE ON THE DECISION RENDERED IN THE CASE OF CIT VS. ANSAL HOUSING FINAN CE & LEASING CO. LTD.(SUPRA). 3.2. THE LD. COUNSEL FOR THE ASSESSEE FURTHER REFER RED TO THE FOLLOWING DECISIONS TO CONTEND THAT NOTIONAL ANNUAL LETTING V ALUE OF UNSOLD FLATS CANNOT BE ASSESSED UNDER THE HEAD INCOME HOUSE PROPERTY: - (1) C.R. DEVELOPMENT P LTD. VS. JCIT(ITA NO.4277/M/201 2 (MUM-ITAT); (2) RUNWAL CONSTRUCTIONS VS. ACIT,(52 CCH 569)(MUM-ITA T); (3) ACIT VS. HAWARE CONSTRUCTIONS PVT. LTD., (ITA NO.3 321/MUM/2016); (4) ITO VS. ARIHANT ESTATES PVT. LTD. (53 CCH 321)(MUM- ITAT) (5) MAHANAGAR CONSTRUCTIONS VS. ITO (ITA NO.623/PUN/201 8 (PUNE-ITAT) 4. PER CONTRA, SHRI R. MANJUNATHA SWAMY, REPRESENTI NG THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED F OR DISMISSING THE APPEAL OF THE ASSESSEE. THE LD.DEPARTMENTAL REPRES ENTATIVE SUBMITTED THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION RENDERED IN THE CASE OF ANSAL HOUSING FINANCE & LEASING CO. LTD. (S UPRA). 5. WE HAVE HEARD THE SUBMISSIONS MADE BY RIVAL SIDE S AND HAVE EXAMINED THE DOCUMENTS AVAILABLE ON RECORD. WE HAVE ALSO CO NSIDERED THE DECISIONS ON WHICH RIVAL SIDES HAVE PLACED RELIANCE. WE FIND TH AT THE ONLY REASON FOR INVOKING REVISIONAL JURISDICTION BY THE PCIT IS THA T THE ASSESSING OFFICER HAS FAILED TO EXAMINE TAXABILITY OF NOTIONAL RENTAL VAL UE OF FLATS HELD AS STOCK-IN- TRADE BY THE ASSESSEE. WE FIND THAT DURING THE ASS ESSMENT PROCEEDINGS THE ASSESSING OFFICER HAD ISSUED NOTICE TO THE ASSESSEE , WHEREIN QUERY WAS RAISED 6 ITA NO.3492/MUM/2019 (A.Y.2015-16) ITA NO.3493/MUM/2019 (A.Y.2014-15) REGARDING NATURE OF ASSESSEES BUSINESS AND DISCREP ANCIES IN THE CLOSING STOCK. THE ASSESSEE REPLIED TO THE NOTICE ON 22/12/2016. A FTER CONSIDERING THE REPLY OF ASSESSEE, THE ASSESSING OFFICER FINALISED THE AS SESSMENT. IT IS EMANATING FROM THE DOCUMENTS ON RECORD THAT THE ASSESSING OFF ICER WAS WELL AWARE OF THE FACT THAT THE ASSESSEE IS IN THE BUSINESS OF REAL E STATE DEVELOPMENT AND HAD INVENTORY OF COMPLETED FLATS AT THE END OF FINANCIA L YEAR. THE ASSESSING OFFICER APPLIED HIS MIND ON THE ISSUE AND HAS THEREAFTER CO ME TO THE CONCLUSION THAT NO ADDITION IS REQUIRED TO BE MADE IN RESPECT OF NO TIONAL RENTAL VALUE OF FLATS HELD AS STOCK-IN-TRACE. 6. DE-HORS THE FACT THAT THE ASSESSING OFFICER HAS CONSIDERED THIS ISSUE DURING THE ASSESSMENT PROCEEDINGS, THERE ARE JUDGME NTS BY TWO NON- JURISDICTIONAL HONBLE HIGH COURTS TAKING DIVERGENT VIEW ON THE TAXABILITY OF NOTIONAL RENTAL VALUE OF FLATS HELD AS STOCK. THE H ONBLE DELHI HIGH COURT IN THE CASE OF ANSAL HOUSING FINANCE & LEASING CO. LTD. HA S HELD THAT NOTIONAL ANNUAL LETTABLE VALUE OF UNSOLD FLATS SHOULD BE ASSESSED A S INCOME FROM HOUSE PROPERTY. WHEREAS, THE HONBLE GUJARAT HIGH COURT IN THE CASE OF NEHA BUILDERS P. LTD. (SUPRA) HAS HELD THAT ANY INCOME D ERIVED FROM THE PROPERTY HELD AS INVENTORY IS TAXABLE AS BUSINESS INCOME. THUS, THE ISSUE THAT HAS BEEN RAISED BY THE PCIT IN REVISIONAL JURISDICTION IS DE BATABLE. THE ASSESSING OFFICER HAS TAKEN ONE OF THE POSSIBLE VIEWS. THE HONBLE SU PREME COURT OF INDIA IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. V. COMMISSIONER OF INCOME-TAX, REPORTED AS 243 ITR 83 IN AN UNAMBIGUOUS MANNER HAS EXPLAINED T HAT WHERE TWO VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER HAS TAKEN ONE OF THE POSSIBLE VIEWS TO WHICH CIT DOES NOT AGREE, THIS WOULD NOT MAKE THE ASSESSM ENT ORDER ERRONEOUS. THE RELEVANT EXTRACT OF THE JUDGEMENT BY THE HONBLE AP EX COURT IS AS UNDER: 7 ITA NO.3492/MUM/2019 (A.Y.2015-16) ITA NO.3493/MUM/2019 (A.Y.2014-15) 9. THE PHRASE 'PREJUDICIAL TO THE INTERESTS OF THE REVENUE' HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFF ICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CA NNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, FOR EXAMPLE, WHEN AN ITO ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF R EVENUE; OR WHERE TWO VIEWS ARE POSSIBLE AND THE ITO HAS TAKEN ONE VIEW WITH WHICH THE COMMI SSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE ITO IS UNSUSTAINABLE IN LAW. SIMILAR VIEW HAS BEEN EXPRESSED BY THE HONBLE SUPR EME COURT OF INDIA IN THE CASE OF COMMISSIONER OF INCOME-TAX (CENTRAL) V . MAX INDIA LTD, REPORTED AS 295 ITR 282. 7. THE PROVISIONS OF SECTION 263 OF THE ACT CAN BE INVOKED IF, THE TWIN CONDITIONS MANDATED UNDER THE SECTION ARE SATISFIED , I.E: (I) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE REVE NUE. IF ANY ONE OF THESE TWO CONDITIONS IS ABSENT, THE C OMMISSIONER OF INCOME TAX CANNOT TAKE RECOURSE TO SECTION 263 OF T HE ACT. IN THE PRESENT CASE WE ARE OF CONSIDERED VIEW THAT THE ASSESSMENT ORDER SOUGHT TO BE REVISED DOES NOT SUFFER FROM ERROR AS POINTED BY THE PCIT. MEREL Y FOR THE REASON THAT PCIT DOES NOT AGREE WITH ONE OF THE POSSIBLE VIEW TAKEN BY THE ASSESSING OFFICER, WOULD NOT MAKE THE ASSESSMENT ORDER ERRONEOUS. THE PCIT HAS ERRED IN INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT, THEREFORE, THE IMPUGNED ORDER IS LIABLE TO BE QUASHED. 8. WE MAY ALSO LIKE TO ADD HERE THAT SUB-SECTION (5 ) TO SECTION 23 HAS BEEN INSERTED BY THE FINANCE ACT, 2017 W.E.F. 01-4-2018, WHEREBY NOTIONAL ANNUAL VALUE OF PROPERTY/PART OF PROPERTY HELD HAS STOCK-I N-TRADE HAS BEEN BROUGHT TO 8 ITA NO.3492/MUM/2019 (A.Y.2015-16) ITA NO.3493/MUM/2019 (A.Y.2014-15) TAX SUBJECT TO CONDITIONS SPECIFIED IN THE NEWLY IN SERTED SUB-SECTION. THE AMENDMENT IS SUBSTANTIVE IN NATURE AND HENCE, WOULD BE EFFECTIVE PROSPECTIVELY I.E. IT WOULD NO APPLICATION IN THE I MPUGNED ASSESSMENT YEAR. THUS, NO ADDITION ON ACCOUNT OF NOTIONAL RENTAL VAL UE OF THE FLATS HELD AS STOCK IN TRADE BY THE ASSESSEE COULD HAVE BEEN MADE BY TH E ASSESSING OFFICER IN THE IMPUGNED ASSESSMENT YEAR. 9. THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CAS E OF S D CORPORATION (P) LTD. VS. PR.CIT (SUPRA) UNDER SIMILAR SITUATION HAS HELD THAT INVOKING OF PROVISIONS OF SECTION 263 OF THE ACT IS BAD IN LAW. THE RELEVANT EXTRACT OF THE ORDER OF THE TRIBUNAL READS AS UNDER:- 13. WE HAVE NOTED THAT DURING THE ASSESSMENT, THE ASSESSEE VIDE ITS REPLY/LETTER DATED 24.11.2015 FURNISHED THE DETAIL OF OPENING AN D CLOSING STOCK CONSISTING OF FLAT READILY AVAILABLE FOR SALE IN RESPECT OF IMPERIL PR OJECT. IN THE DETAILS OF INVENTORY, THE ASSESSEE CLEARLY BRING ON RECORD THAT AT THE TIME O F OPENING OF WRITTEN DOWN VALUE OF 21 FLAT, CONSISTING OF AREA OF 80000 (MAY BE SQ.FT. ) TOTAL VALUE OF RS. 170,41,088,56/- OUT OF WHICH THE ASSESSEE HAS SOLD 14 FLATS OF TOTA L AREA 48830 (MAY BE SQ.FT.) OF VALUE OF RS. 104,01,45,443/-. THEREBY THE ASSESSEE REMAINED IN POSSESSION OF TOTAL 7 UNSOLD FLATS CONSISTING AREA OF 31170 (MAY BE SQ.FT .) VALUE OF WHICH WAS SHOWN AT RS. 66,39,63,413/-. THE ASSESSEE HAS ALSO FURNISHED THE COMPLETE DETAILS OF NAME OF PARTIES, FLAT NUMBER AND DETAILS OF THE COST OF FLA TS SOLD DURING THE YEAR. MOREOVER, THE LD. CIT(A) IN THE NOTICE UNDER SECTION 263 HAS REFERRED THAT ON VERIFICATION, CERTAIN DISCREPANCIES WERE FOUND IN THE ASSESSMENT ORDER. T HE LD. CIT(A) HAS ALSO REFERRED THAT THE ASSESSEE HAS SHOWN UNSOLD FLAT VALUING OF RS. 66,39,63,413/- IN CLOSING STOCK. THEREBY, ALL THE INFORMATION/DETAILS WERE GATHERED BY THE LD. PCIT FROM THE ASSESSMENT RECORD. WE HAVE FURTHER NOTED THAT IN TH E NOTICE, THE LD. CIT(A) HAS REFERRED THE DECISION OF HON'BLE DELHI HIGH COURT I N ANSAL HOUSING FINANCE & LEASING CO. LTD.'S CASE (SUPRA). THE LD. AR OF THE ASSESSEE WHILE MAKING SUBMISSION HAS VEHEMENTLY SUBMITTED THAT ISSUE IS DEBATABLE AND TH ERE IS CONTRARY DECISION OF HON'BLE GUJARAT HIGH COURT IN NEHA BUILDERS (P.) LT D.'S CASE (SUPRA) WHEREIN THE HON'BLE COURT HAS TAKEN A VIEW THAT, IF PROPERTY IS USED AS A STOCK-IN-TRADE, THEN SAID PROPERTY WOULD BECOME OR PARTAKE CHARACTER OF STOCK AND ANY INCOME DERIVED FROM SUCH STOCK WOULD BE 'INCOME FROM BUSINESS' AND NOT 'INCOME FROM HOUSE PROPERTY'. THEREFORE, KEEPING IN VIEW THE CONTRARY DECISION OF NON-JURISDICTIONAL HIGH COURT, WE ARE OF THE VIEW THAT ISSUE IS DEBATABLE AND TWO VIE WS ARE POSSIBLE. THE HON'BLE 9 ITA NO.3492/MUM/2019 (A.Y.2015-16) ITA NO.3493/MUM/2019 (A.Y.2014-15) SUPREME COURT IN MAX INDIA LTD.'S CASE (SUPRA) HELD THAT WHEN TWO VIEWS ARE INHERENTLY POSSIBLE, THE PROVISION OF SECTION 263 W OULD NOT ATTRACT. WE MAY REFER HERE THAT THE UNSOLD FLAT WAS TREATED BY ASSESSEE AS STO CK-IN-TRADE IN ITS BOOKS OF ACCOUNT. THE FLATS SOLD BY THE ASSESSEE WERE ASSESSED UNDER THE HEAD 'INCOME FROM BUSINESS'. THEREFORE, IN OUR CONSIDERED VIEW THAT THE ORDER FO R NOT BRINGING THE UNSOLD FLATS TO TAX AT NOTIONAL LETTING VALUE UNDER THE HEAD 'INCOM E FROM OTHER SOURCES' IS NOT ERRONEOUS. THE ASSESSING OFFICER HAS TAKEN ONE OF T HE POSSIBLE VIEWS. EVEN OTHERWISE, SUB-SECTION (5) IN SECTION 23 WAS INSERTED BY FINAN CE ACT, 2017 AND IS APPLICABLE ONLY FROM 01.04.2018 AND NOT FOR THE ASSESSMENT YEAR UND ER CONSIDERATION. THEREFORE, THE TWIN CONDITION AS PRESCRIBED UNDER SECTION 263 ARE NOT FULFILLED IN RESPECT OF FIRST ISSUE I.E. TAXABILITY OF UNSOLD FLATS UNDER THE HEAD 'INC OME FROM HOUSE PROPERTY'. SIMILAR VIEW HAS BEEN TAKEN BY THE TRIBUNAL IN THE CASE OF ARCHIE CREATION VS. PCIT(SUPRA). 10. IN THE LIGHT OF FACTS OF THE CASE AND THE JUDG EMENTS/DECISIONS DISCUSSED ABOVE, WE HOLD THAT THE PCIT CLEARLY FELL IN ERROR IN INVOKING REVISONAL JURISDICTION U/S 263 OF THE ACT. CONSEQUE NTLY, THE IMPUGNED ORDER IS QUASHED AND THE APPEAL OF ASSESSEE IS ALLOWED. ITA NO.3492/MUM/2019 - A.Y 2015-16: 11. THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESS EE SUBMITTED THAT THE FACTS ARE SIMILAR AND THE REASONS FOR ISSUING N OTICE UNDER SECTION 263 OF THE ACT ARE IDENTICAL TO ASSESSMENT YEAR 2014-15. THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FURTHER POINTED THAT IN ASSESSMENT YEAR 2015-16, THE ASSESSING OFFICER HAD MADE A SPECIFIC QUERY VIDE NOTICE ISSUED UNDER SECTION 142(1) OF THE ACT DATED 29/01/2017 AS KING THE ASSESSEE TO FURNISH BREAK-UP OF FINISHED GOODS, THE NAME OF THE PROJECT, FLAT/UNIT, CARPET AREA, COST AND TO SHOW CAUSE AS TO WHY THE ANNUAL VALUE OF FINISHED PROPERTY HELD AS STOCK- IN- TRADE BE NOT ASSESSED U NDER THE HEAD INCOME 10 ITA NO.3492/MUM/2019 (A.Y.2015-16) ITA NO.3493/MUM/2019 (A.Y.2014-15) FROM HOUSE PROPERTY. THE ASSESSEE VIDE REPLY DATED 22/12/2017 MADE DETAILED SUBMISSIONS. THE ASSESSING OFFICER AFTER BEING SATISFIED WITH THE REPLY MADE NO ADDITIONS ON ACCOUNT OF NOTIONAL RENT AL VALUE OF FLATS IN INVENTORY. 12. THE LD.DEPARTMENTAL REPRESENTATIVE DEFENDED TH E FINDINGS OF PCIT AND PRAYED FOR DISMISSING THE APPEAL OF ASSESSEE. 13. BOTH SIDES HEARD. WE FIND THAT FACTS IN THE A SSESSMENT YEAR UNDER APPEAL ARE PARI-MATERIA TO THE FACTS IN THE ASSESSMENT YEAR 2014-15. THE REASONS FOR INVOKING REVISIONAL JURISDICTION UNDER SECTION 263 OF THE ACT IN BOTH THE ASSESSMENT YEARS ARE IDENTICAL. THE FINDI NGS GIVEN BY US WHILE ADJUDICATING THE APPEAL OF THE ASSESSEE FOR ASSESSM ENT YEAR 2014-15 WOULD MUTATIS MUTANDIS APPLY TO THE PRESENT APPEAL. IN THE RESULT, THE I MPUGNED ORDER IS QUASHED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 14. IN THE RESULT, BOTH APPEALS BY THE ASSESSEE AR E ALLOWED. ORDER PRONOUNCED ON MONDAY THE 28TH DAY OF SEPTEM BER, 2020. SD/- SD/- (MANOJ KUMAR AGGARWAL) (VIKAS AWAS THY) $% / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, 6/ DATED: 28 /09/2020 VM , SR. PS (O/S) 11 ITA NO.3492/MUM/2019 (A.Y.2015-16) ITA NO.3493/MUM/2019 (A.Y.2014-15) COPY OF THE ORDER FORWARDED TO : 1. . / THE APPELLANT , 2. /0 / THE RESPONDENT. 3. 70 ( )/ THE CIT(A)- 4. 70 CIT 5. 89/0 , . . . , / DR, ITAT, MUMBAI 6. 9:;<= / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI