The Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘G’, adjudicated on the appeal filed by Savera Reality Pvt Ltd against the order passed by the Assistant Commissioner of Income Tax (ACIT), Circle-22(2), New Delhi. The appeal, registered as ITA No. 364/DEL/2021, pertains to the assessment year 2012-13.
Savera Reality Pvt Ltd, located at C-28, Ground Floor, Panchsheel Enclave, New Delhi, filed its return of income for the assessment year 2012-13 on 20/09/2012 declaring an income of Rs. 1,17,99,240. The ACIT made additions based on deeming provisions under Section 22 of the Income Tax Act, 1961.
The grounds of appeal raised by Savera Reality Pvt Ltd are as follows:
The case was heard on 15.09.2021, and the order was pronounced on 11.11.2021. The Tribunal, comprising Ms. Suchitra Kamble, Judicial Member, and Sh. Prashant Maharishi, Accountant Member, reviewed the submissions and the relevant facts of the case.
The main issue in this appeal was whether the addition of Rs. 1,04,73,951 as deemed rental income under Section 22 and the addition of Rs. 17,16,800 as deemed dividend under Section 2(22)(e) were justified.
The CIT(A) upheld the addition under Section 22, which was based on the Assessing Officer’s (AO) calculation of presumptive rental income at 2% of the opening stock of property. The AO assumed that the properties held as stock-in-trade generated rental income, despite the appellant’s claim that these properties were incomplete and held for sale.
The appellant argued that the deeming provisions of Section 22 apply only if the property is held as an investment, not as stock-in-trade. They relied on the decision in the case of Ansal Housing (389 ITR 373) to support their claim that the properties should not be considered for rental income calculation.
However, the Tribunal noted that the appellant failed to provide completion or non-completion certificates for the properties. An affidavit stating that no completion certificate was taken was not sufficient evidence. Consequently, the Tribunal upheld the CIT(A)’s decision to confirm the addition of deemed rental income.
The AO also added Rs. 17,16,800 as deemed dividend, representing an advance given to Mr. Ankur Arora during the year. The appellant did not contest this addition with substantial evidence, and the Tribunal upheld the CIT(A)’s decision on this ground as well.
The Tribunal dismissed the appeal filed by Savera Reality Pvt Ltd, upholding the CIT(A)’s order and confirming the additions made by the AO under Sections 22 and 2(22)(e).
The appeal filed by Savera Reality Pvt Ltd was dismissed.
Order pronounced in the open court on 11.11.2021.
Signed by:
(Prashant Maharishi) – Accountant Member
(Suchitra Kamble) – Judicial Member
Date: 11.11.2021
*R. Naheed*
Copy forwarded to:
Assistant Registrar, ITAT, Delhi Benches, Delhi
ITA No. 364/DEL/2021 – Savera Reality Pvt Ltd vs ACIT Circle-22(2) – Deeming Rental Income
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