SANJAY AHUJA,NEW DELHI vs. COMMISSIONER OF INCOME TAX, DELHI

Shri Shivam Garg, appearing on behalf of the assessee submitted that in scrutiny assessment proceedings for AY 2017-18, the Assessing Officer (AO) inter alia made addition of Rs.6,00,000/- u/s.68A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). The assessee in his return of income had declared ‘Income from House Property’ Rs.6,00,000/-. The AO made said addition holdings that the assessee has not furnished any documentary evidence to show ownership of the property bearing no. E- 16, DSIDC Complex, Nangloi, New Rohtak Road, New Delhi, from where the assessee has (AY 2017-18) purportedly declared rental income. The assessee carried the issue in appeal before the CIT(A), the CIT(A) vide impugned order upheld the findings on this issue in assessment order. The ld. Counsel for the assessee furnished copy of registered agreement to sell dated 30.09.2008 to substantiate that the property bearing no. E-16, admeasuring 2700 sq. ft. situated at DSIDC Rohtak Road, Nangloi, Delhi was purchased by the assesee jointly with three other persons namely; Nikhil Kumar Nagpal, Narender Kumar Nagpal & Alka Ahuja a total for consideration of Rs.69,00,000/-. The ld. Counsel further submitted that the said property was subsequently leased out to two different parties i.e. (i) New AM Products vide lease agreement dated 11.04.2016 on a monthly lease rental of Rs.1,00,000/- for a period of three years; & (ii) Shri Swastik Polymers vide lease agreement dated 11.04.20.16 on a monthly lease rental of Rs.1,00,000/- for a period of three years. The assessee being owner of ¼ share in the said property offered his share of rental income i.e. Rs.6,00,000/- in his return of income as income from House Property. The AO made addition of the rental income declared by the assessee as unexplained income u/s.68 of the Act. The ld. Counsel for the assesese in light of the ownership documents placed on record, prayed for deleting the addition.

Per contra, Shri Keshav Kishore Aanad, representing the department supported the impugned order and submitted that since the assessee had failed to furnish ownership document of the property before the authorities below. The rental income declared by the assessee was disbelieved.

Both sides heard, orders of the authorities below examined. The short issue in the present appeal by the assessee is with regard to genuineness of rental income earned by the assessee during the relevant period. The assessee in his return of income inter alia had offered to tax Rs.6,00,000/- under the head Income from House Property. In absence (AY 2017-18) of any documentary evidence produced by the assessee before the AO with regard to title of ownership of the property from which rental income has been declared, the AO disbelieved the assessee’s submission, though, the assessee had placed on record Lease Agreements. Similar was the position before the First Appellate Authority. The assessee has now placed on record a copy of registered sale agreement dated 30.09.2008 vide which the assesssee in joint ownership with three other persons had purchased property bearing no E-16, DSIDC Complex, Nangloi, New Rohtak Road, Delhi to substantiate assessee’s title in the immovable property. After examining the same, I am satisfied that the assessee has discharged his onus in proving his ownership in the property from which the assessee has earned rental income and has offered the same to tax in his return of income under the head Income from House Property. In light of the document furnished by the assessee, the addition of Rs.6,00,000/- made u/s.68 of the Act is directed to be deleted.

Thus, appeal of the assessee is allowed.