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Facts
The assessee, engaged in construction and slum rehabilitation, showed rental income from M/s. Omkar Realtors and Developers Pvt. Ltd. in its books at Rs. 3,51,17,951/-. However, Form 26AS reflected a higher rental income of Rs. 3,94,41,137/-, creating a difference of Rs. 43,23,186/-. The Assessing Officer added this difference to the assessee's total income and initiated penalty proceedings.
Held
The Tribunal considered the rival submissions and found it appropriate to restore the issue back to the Assessing Officer. The assessee is to be given an adequate opportunity of being heard to present their claim afresh.
Key Issues
Dispute regarding the addition of Rs. 43,23,186/- to the total income due to a discrepancy in reported rental income versus Form 26AS, and the initiation of penalty proceedings.
Sections Cited
s.199, Rule 37BA of the I.T.Rules, 1962, s. 270(A)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI RATNESH NANDAN SAHAY
M/s. Shivshahi Punarvasan CIRCLE 14 (1) (2) Prakalp Ltd. Aayakar Bhavan, 5th Floor, 4th Floor, Vs. Griha Nirman Bhavan, Room No. 455, Bandra (E)- 400051, M. K. Road, Maharashtra. Mumbai- 400020. PAN: AACCS1590C (Appellant) (Respondent) Present for: Assessee by : Shri Kirit Sanghvi, A.R. Revenue by : Shri Manoj Kumar Singh, Sr. A.R. Date of Hearing : 23 . 04 . 2024 Date of Pronouncement : 30 . 04 . 2024 O R D E R
Per Ratnesh Nandan Sahay, Accountant Member:
This appeal has been filed for the assessment year 2018-19 where following grounds of appeal have been taken in ITA No. 4067/M/2023:-
2 Page | 2 M/s. Shivshahi Punarvasan Prakalp Ltd. “1. The learned CIT(A), The National Faceless Appeal Centre, erred on facts and in law in confirming addition of Rs. 43,23,186/- being alleged income not disclosed in the Return.
2. The learned CIT(A), the National Faceless Appeal Centre, erred on facts and in law in misreading/misinterpreting the provisions of s.199 read with Rule 37BA of the I.T.Rules, 1962.
The Appellant craves leave to add to, modify or amend one or more of the Grounds of Appeal.”
2. Similarly, following Grounds of appeal have been raised in 1. The learned CIT(A),The National Faceless Appeal Centre, erred on facts and in law in confirming addition of Rs. 1,69,35,779/- being alleged income not disclosed in the Return.
The learned CIT(A), The National Faceless Appeal Centre, erred on facts and in law in misreading/misinterpreting the provisions of s.199 read with Rule 37BA of the I.T.Rules, 1962.
The Appellant craves leave to add to, modify or amend one or more of the Grounds of Appeal.”
Since grounds of appeal
raised in both the appeals are similar, these appeals are decided together.
4. The facts of the case are that the assessee was engaged in the business of construction, slum rehabilitation and redevelopment in 3 Page | 3 M/s. Shivshahi Punarvasan Prakalp Ltd. the Mumbai metropolitan region. During the assessment years under consideration, it was found that the appellant has shown rental income from M/s. Omkar Realtors and Developers Pvt. Ltd in his books amounting to Rs.3,51,17,951/- whereas as per 26AS it had received rental income amounting to Rs. 3,94,41,137/- Hence, there is a difference of Rs.43,23,186/- in rental income so reflected. Accordingly, a show cause notice was issued to the assessee to explain the difference. In response to the show cause notice, the assessee submitted a reconciliation statement as under:- Reconciliation with corresponding income shown in form 26AS/AIR: Income shown is Form Income TDS 26AS Claimed Halkara Buiders P. Ltd. 190,23,778/- 19,02,379/- Omkara Realtors & 394,41,137/- 39,44,115/- Developers Pvt. Ltd. Omkara Ventures Pvt. 137,69,901/- 13,90,375/- Ltd Total 722,34,816/- 72,36,869/- 5. The Assessing officer considered the above reconciliation statement but not satisfied with the explanation of the assessee as he found that there was clear difference in rental income as reflected below:-
4 Page | 4 M/s. Shivshahi Punarvasan Prakalp Ltd. Sr. Party Income TDS No. As per 26 As per As per As per AS Books 26 AS Books 1. Omkar realtors and 3,94,41,137/- 351,17,951/- 49,82,142/- 15,58,206/- developers pvt. Ltd. 2. Halaka 153,89,385/- 177,92,100/- 15,38,939/- 17,60,815/- Developers The Assessing Officer, therefore, added the difference in rental income amounting to Rs.43,23,186/- to the total income of the assessee under the head “ Income from Other Sources” and also initiated Penalty proceeding u/s. 270(A) of the Act for underreporting of Income.
We have considered the rival submissions and found it proper to restore the issue back to the file of the assessing officer to consider the claim of the assessee afresh by giving him adequate opportunity of being heard.
In the result, the appeal is dismissed in terms of aforesaid terms. Order pronounced in the open court on 30.04.2024.
5 Page | 5 M/s. Shivshahi Punarvasan Prakalp Ltd.