pay tax based on alv on the unsold flats as it was the owner of the flats and it did not matter whether the properties were rented out or not the court ruled in favour of the income tax authorities such a move will also lead to an increase in tax litigation in the sector and add to the stress builders are under said maadhav poddar associate director at ey real estate companies show their finished apartments as stockintrade and income from these are shown as business income as in most other businesses in a rising market several developers hold apartments to benefit from the price appreciation that will accrue a few years after the project is complete but in the current market most developers hold back the apartments not to hoard but because they are unable to sell if the market conditions are not good and i cannot sell why should i be taxed asked one south indiabased builder who did not want to be identified the real estate market has been battered by a slow economy over the past two years with home sales sliding drastically and putting pressure on the finances of builders according to liases foras the unsold inventory including properties that are under construction and completed has risen further from 734 million sq ft or about 734000 apartments at the end of march to 765 million sq ft or about 760000 apartments at the end of june the sector has not been doing well in the last few years and it is possible there will be some bit of unsold finished stock with developers said poddar according to the research firm home sales in the apriljune quarter slid 9 per cent in the top six cities only bangalore was among the tier i cities that saw a 10 per cent growth in sales the national capital region saw a 20 per cent drop in sales during the quarter chennai was down 18 per cent and hyderabad 13 per cent while mumbai saw a marginal drop of 2 per cent