JAGDISH PRASAD SINGH,KOLKATA vs. D.C.I.T., CC - 1(1), KOLKATA

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ITSSA 137/KOL/2024Status: DisposedITAT Kolkata28 March 2025AY 2014-20154 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had made a total voluntary disclosure of gross rental income of ₹1,80,00,000/- over the period from FY 2008-09 to FY 2014-15. The addition confirmed by the CIT(A) for the assessment year 2014-15 was ₹74,70,721/-. The Tribunal found that the voluntary disclosure was sufficient to cover this addition by allowing the telescopic benefit to the assessee. The Tribunal's reasoning was based on the principle that when the disclosure made is more than the actual rent received, considering the entire period, the assessee should be given the benefit of telescopic adjustment. The Tribunal respectfully followed the decision of the co-ordinate Bench in the case of Indira Devi (supra), which held that the assessee should be given telescopic benefit out of the total disclosure of gross rental made, as the total disclosure was enough to cover the shortfall in the current year's rental income. Accordingly, the order of the CIT(A) was set aside, and the AO was directed to delete the addition.

What were the facts?

A search under Section 132 of the Income Tax Act, 1961, was conducted on the assessee, Jagdish Prasad Singh, on April 3, 2014. During the search, it was found that the assessee was receiving rental income from several properties which had not been disclosed in his return of income. The assessee made a voluntary disclosure of ₹1,80,00,000/- as gross rental income for the period from FY 2008-09 to FY 2014-15, which included ₹31,44,095/- for FY 2013-14, relevant to the assessment year 2014-15. A notice under Section 153A of the Act was issued on April 29, 2015, and the assessee filed a return on November 26, 2016, declaring a total income of ₹22,18,900/-. The Assessing Officer (AO) made an addition of ₹87,63,571/- towards undisclosed rent. The Commissioner of Income-tax (Appeals) [CIT(A)] partly allowed the appeal, deleting ₹12,92,850/- and sustaining an addition of ₹74,70,721/-.

What were the issues?

1. Whether the addition of ₹74,70,721/- on account of rental income for Assessment Year 2014-15 can be deleted by allowing a telescopic benefit against the voluntary disclosure of ₹1,80,00,000/- made by the assessee for the period FY 2008-09 to FY 2014-15, turning on Section 153A of the Income Tax Act, 1961. Assessee's Contention: The assessee argued that the addition of ₹74,70,721/- should be deleted by allowing a telescopic benefit against the voluntary disclosure of ₹1,80,00,000/- made during the search. The assessee relied on the co-ordinate Bench decision in the case of Smt. Indira Devi (ITA No. 138/KOL/2024 dated 31.01.2025) which dealt with a similar disclosure in the same search and allowed telescopic benefit. Revenue's Contention: The Revenue relied on the order of the CIT(A). However, the Departmental Representative (DR) candidly admitted that a similar issue was decided by the co-ordinate Bench in the case cited by the assessee.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRI SONJOY SARMA, JM

For Appellant: Shri Manish Tiwari, AR
For Respondent: Shri B. Satyanarayana Raju, DR
Hearing: 24.02.2025Pronounced: 28.03.2025

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals), 20 (hereinafter referred to as the “Ld. CIT(A)”] dated 27.09.2024 for the AY 2018-19.

2.

The only issue raised by the assessee is against confirming the estimated addition of ₹74,70,721/- by the ld. CIT (A) as made by the ld. AO on account of rental income.

3.

The facts in brief are that the search u/s 132 of the Act was conducted on the assessee on 03.04.2014, during which the assessee was found to be receiving the rent from several properties which was not disclosed in the return of income and accordingly, the assessee made

4.

In the appellate proceedings, the ld. CIT (A) partly allowed the appeal of the assessee by deleting the addition to the extent of ₹12,92,850/-, out of total addition made by the ld. AO of ₹87,63,571/- thereby sustaining the addition to the tune of ₹74,70,721/-. The ld. CIT (A) deleted the addition which is attributed to the extrapolation and estimation of rental income however, sustained the remaining addition.

5.

The ld. Counsel for the assessee stated that undisputedly the assessee has made a voluntary disclosure during the search action amounting to ₹1,80,00,000/- towards the gross rental income for the period commencing from F.Y. 2008-09 to F.Y. 2014-15. The ld. AR submitted that during the year the addition made by the ld. AO was to the tune of ₹87,63,571/- out of ₹12,92,850/-, was already deleted by the ld. CIT (A) and remaining ₹74,70,721/- was sustained by the ld. CIT (A) which may be deleted by allowing telescopy against the voluntary disclosure made by the assessee of ₹1,80,00,000/-over the period as stated in above. The ld. Counsel for the assessee stated the issue is squarely covered by the decision of the co-ordinate Bench in the same search in case of Smt Indira Devi qua wherein the similar disclosure

6.

The ld. DR on the other hand relied on the order of the ld. CIT (A), however, candidly admitted that the similar issue has been decided by the co-ordinate Bench in the decision as cited by the ld. AR.

7.

After hearing the rival contentions and perusing the materials available on record, we find that the assessee has made a total disclosure of gross rental of ₹1,80,00,000/- over a period of F.Y. 2008-09 to 2014-15. The instant assessment year before us is 2014- 15 for which the addition of ₹74,70,721/- was confirmed by the ld. CIT (A). In our opinion, the disclosure made in the hands of the assessee is sufficient to cover the said addition by allowing the telescopic benefit to the assessee. The case of the assessee is squarely covered by the decision of the co-ordinate Bench in case of Indira Devi (supra), wherein the co-ordinate Bench has held as under:-

“5. After hearing the rival contentions and perusing the materials available on record, we find that the assessee has made a total disclosure of gross rental of ₹1,80,00,000/- over the period of F.Y. 2008-09 to F.Y. 2014-15. We note that though the rent assessed by the AO is correct but the rental disclosure during search was more than amount of undisclosed on account of undisclosed gross rental income. Therefore, when the disclosure made was more than the actual rent received by the assessee taking into account the period right from the F.Y. 2008-09 to F.Y.2014-15, then the assessee has to be given benefit of telescopic benefit. Thus, considering the factual matrix, in our view, the assessee has to be given telescopic benefit out of the total disclosure of gross rental made by the assessee as the total disclosure is enough

9.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 28.03.2025

Sd/- Sd/- (SONJOY SARMA) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 28.03.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy//

Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata

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