MALVIKABEN SANJIVBHAI TAKTWALA,MUMBAI vs. ACIT 2(3)(1), MUMBAI

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ITA 6336/MUM/2018Status: DisposedITAT Mumbai12 December 2019AY 2010-114 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the assessee is eligible for standard deduction on house property income and directed the AO to allow it. The Tribunal also directed the AO to allow a portion of the credit card payment, considering the declared income.

What were the facts?

The assessee, a widow, had income from property and interest. The AO reopened the assessment due to credit card payments and denied deduction for house property income. The AO also added credit card payments as income from other sources.

What were the issues?

Whether the assessee is eligible for standard deduction on house property income and whether credit card payments are to be treated as unexplained expenditure.

Which sections of the Income-tax Act were involved?

Section 24(a),Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”, BENCH

Before: SHRI R.C.SHARMA, AM & SHRI VIKAS AWASTHY, JM

For Appellant: Shri Himanshu Gandhi (AR)
For Respondent: Shri Kumar Padmapani Bora (Sr.DR)
Hearing: 03/12/2019Pronounced: 12/12/2019

Assessee by Shri Himanshu Gandhi (AR) Revenue by Shri Kumar Padmapani Bora (Sr.DR) Date of Hearing 03/12/2019 Date of Pronouncement 12/12/2019 आदेश / O R D E R PER: R.C. SHARMA, A.M. This is the appeal filed by the assessee against the order of the ld. CIT(A)-6, Mumbai dated 21/08/2018 for the A.Y. 2010-11 in the matter of order passed U/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short, the Act).

2.

The grievance of the assessee relates to declining claim of deduction U/s 24(a) of the Act in respect of income from house property and also for adding a sum of Rs. 3,65,117/- in respect of payment made by credit card.

Malvikaben Sanjivbhai Taktawala Vs ACIT 3. Rival contentions have been heard and record perused. Facts in brief are that the assessee is a widow lady having income from property and interest income. For the A.Y. under consideration, the A.O. reopened the assessment on the ground that the assessee had made payment of Rs. 3,65,117/- against credit card. In reply to notice issued U/s 148, the assessee filed her return of income declaring total income of Rs. 7,37,722/- as under:

Income Gross Net Income Rent Income under House Property 611250 Less: 30% Standard Deduction (183375) 427875 Interest Income 309847 309847 Total Income 737722 4. However, the A.O. ignored the return of income and added the entire rental income of Rs. 6,11,250/- and interest income of Rs. 2,97,291/- as reported in AIR Report (26AS), as income from other sources and denied the deduction U/s 24(a) against the house property income.

5.

From the record we found that even in 26AS and AIR report also receipts were reported as from rent. Accordingly, the assessee is eligible for deduction U/s 24(a) of the Act in respect of standard deduction against the income from house property, therefore, we direct the A.O. to allow standard deduction of Rs. 1,83,375/- to the assessee and to assess income from rent under the head “income from house property”. From the record we also found that in the A.Y. 2011-12 also rental income was Malvikaben Sanjivbhai Taktawala Vs ACIT offered from the very same property and the A.O. has allowed standard deduction u/s 24(a) of the Act. Accordingly, we direct the A.O. to allow standard deduction to the assessee. So far as the interest income is concerned, the A.O. was correct in assessing the same as “income from other sources”.

6.

The A.O. also made addition in respect of credit card payment of Rs. 3,65,117/-. From the record we found that the assessee has declared following income during the earlier and current years:

A.Y. Gross Total Income 2008-09 17,88,209 2009-10 21,44,466 2010-11 7,37,772 Total 46,70,477 It is clear that during the year under consideration, the assessee had shown income of Rs. 7,37,772/- and the total income for the last three years as shown by the assessee works out to be Rs.46,70,477/-. Thus, the income declared by the assessee is sufficient to take care of credit card payment. Considering totality of facts and circumstances of the case, we direct the A.O. to allow credit card payment of Rs. 3,50,000/-.

We direct accordingly.

7.

In the result, appeal of the assessee is allowed in part. Order pronounced in the open court on 12th December, 2019.

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