SHRI. VENKATACHALAPATHY GUPTA,BANGALORE vs. INCOME TAX OFFICER, BANGALORE

The assessee has raised the following grounds :

During the course of appellate proceedings, the Assessing Officer noted that the assessee has claimed unsecured loan of Rs.1,06,16,765 and also shown rental advance received to the extent of Rs.94,95,401. In response to the query from the Assessing Officer the assessee furnished copies of the rental

agreement and in some of the cases, copy of the bank statement. The Assessing Officer noted that the assessee has not furnished any proof in the following cases : i) Mahaveer Chand HUF Rs.12,50,000. ii) Yashveer Chopra Rs.5,00,000.

The assessee was asked to furnish the copy of rental agreement however the assessee did not furnish the same. Thus the Assessing Officer observed that the assessee claimed that the above advances were received in the F.Y.

Before the Tribunal, the learned Authorised Representative of the assessee has submitted that the assessee has let out about 55 premises. The assessee produced all agreements except in the case of two parties as the rent agreements were not finalized and executed in those cases however the assessee received the rent advance from these two parties. The learned Authorised Representative has then submitted that the assessee received these

On the other hand, the learned Departmental Representative has vehemently opposed to the claim of the assessee and submitted that the nature of the transaction is relevant as whether the assessee has actually received these amounts as rental advance or not. He has further contended that even at the time of refund the assessee has not received any receipt to explain the purpose and the nature of transaction. He has also referred to the bank account of the assessee and submitted that prior to the issue of cheque there is a cash deposit and further the payment to one of the party claimed by the assessee is nothing but through a bearer cheque and therefore it cannot be ascertained from the bank statement who has received this amount. He has relied upon the orders of the authorities below.

Having considered the rival submissions as well as the relevant material on record, it is noted that despite the repeated opportunity given by the Assessing Officer as well as CIT (Appeals), the assessee neither produced any documentary evidence in the shape of rent agreement or otherwise nor produced the confirmation from the parties to substantiate its claim of advance rent. Further the assessee has now claimed as refund of the amount with interest and compensation which is also not a practice in the case of advance rental as it does not carry any interest and only the principle amount is refunded at the time of expiry or termination of tenancy. Therefore the entire explanation of the assessee is contrary to the prevailing practice of advance rent received in the case of letting out of property. Further this advance claimed by the assessee is not reflected being the multiple of the monthly rent.