ACIT, CHENNAI vs. ABDUL KHADIR RAHMATH ILAHI, CHENNAI

Shri Abdul Khadir Rahmath Ali, the assessee, an individual deriving income from house property filed his return for assessment year 2012-13 admitting a total income of Rs. 28,51,440/-. While making the assessment, the Assessing Officer found that the admitted income is only 2/10th of share income, hence, he required the assessee to file the details towards which assessee filed Form 26AS only. The AO called for details of other co-owners and informed the assessee that in the absence of the required proof the entire rental income will be assessed in his hands. Since, assessee failed to comply, he assessed the income from house property at Rs. 91,24,617/-. Aggrieved, the assessee filed an appeal before the CIT(A)-4, Chennai. Before the CIT(A), the assessee filed a copy of the settlement deed from which the CIT(A) found that the assessee owned a property in a commercial complex at Mavoor Road, Calicut situated at Survey No. 5-24- 1218/5A at Kasaba Village of Kozhikode Taluk, Kerala which was settled by him in favour of his wife and children vide the settlement deed dated 04.08.2006. The assessee furnished a photocopy of the lease deed dated 18.12.2007 executed between the co-owners and M/s. Prateek Lifestyles Limited. The CIT(A) found that M/s. Prateek Apparels Pvt. Ltd., credited Rs. 1,32,00,000/- in assessee’s account as rental income and deducted TDS at Rs. 13,20,000/- but the assessee admitted Rs. 28,51,443/- only as rent and pleaded that balance rent and corresponding TDS was admitted and claimed by co-owners in their returns. The CIT(A) also found that the assessee

Aggrieved, the department filed the appeal pleading, inter alia, that the CIT(A) erred in law and giving relief to the assessee based on the documents/evidences such as return of co-owners, lease deed dated 18.12.2007 executed between co-owners (including the assessee) and M/s.

The assessee filed the CO belatedly by 31 days and sought condonation stating that his counsel had to be hospitalized for cervical spinal treatment till the end of May 2017 and records were with him. In view of that :-4-: CO No. 77/Mds/2017 no alternate arrangement could be made. Due to such genuine inability, the assessee pleaded for condonation. We heard the rival contention and condone the delay. The assessee pleads in the CO, inter alia, that the CIT(A) has wide power u/s. 250(4) while disposing of the appeal which includes the power to make any further enquiry as he may thinks fit, in pursuance of such power the appellate authority has sought the explanation from the assessee how the other co-owner should claim rental income of their respective shares, whereas, the gross rental income credited to the account of the assessee. It was in response to the said clarification sought by the CIT(A), the assessee furnished copy of settlement deed and other materials. Therefore, CIT(A) has not committed any error in accepting the details and clarifications etc.

We heard the rival submissions and gone through the relevant materials. Although, the assessee claimed to have settled his property vide settlement deed dated 04.08.2006 and then entered into a lease agreement with co-owners with M/s. Prateek Lifestyle Limited as on 18.12.2007, the TDS certificate is claimed to have been issued in the name of the assessee only even during the period related to this assessment year for the total rental consideration and the TDS is also made in his name. Although, the other co- owners have claimed to have filed their returns admitting rental income, it appears, that the corresponding TDS is not in their name. Further, the settlement deed and other particulars were furnished to the CIT(A) and the :-5-: CO No. 77/Mds/2017 Assessing Officer has not been given an opportunity under Rule 46A to examine all the connected issues. We are of the opinion, that this issue should be remitted back to the AO for due examination and for passing a speaking order, after affording due opportunity to the assessee and accordingly do so.

In the result, the revenue’s appeal is allowed and the assessee’s cross objection is dismissed.