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Income Tax Appellate Tribunal, ‘ A’ (SMC
Before: SHRI ABRAHAM P. GEORGE
आदेश / O R D E R
In this appeal filed by the assessee, it has altogether taken six grounds of which ground Nos.1, 5 and 6 are general in nature needing no specific adjudication.
Ld. Counsel for the assessee at the outset submitted that he was not pressing ground No.2 assailing the reopening done for the impugned assessment year and ground No.3 assailing the disallowance
ITA No. 2166/Mds/2016. :- 2 -: of interest of �1,41,596/- claimed as deduction u/s.24(b) of the Income Tax Act, 1961 (in short the ‘’Act’’). Accordingly ground Nos. 2 & 3 are dismissed as not pressed. This leaves us with ground No.4 which assails an addition of �12,00,000/- being credits in the bank account of the assessee, considered as unexplained.
Facts apropos are that assessee had filed return of income for the impugned assessment year disclosing income of �10,93,950/-.
The assessment initially completed u/s.143(1) of the Act was reopened by issuing notice u/s.148 of the Act on 30.03.2012. In response to said notice, assessee requested the ld. Assessing Officer to treat the return originally filed as one in pursuance of such notice. During the course of assessment proceedings, it was noted that there was a credit of �12,00,000/- on 26.11.2004 in the UTI Bank account No.6301 maintained by the assessee. Narration in the bank account mentioned that the sum was received from one M/s. Natyanjali. Assessee was required to explain the source for this credit. Assessee stated that the amount represented rental income received from M/s. Natyanjali. As
per the assessee she had rented out two properties namely No.6, Boat Club Road, Chennai and No.4, Satyanarayana Avenue, Chennai during the relevant previous year. In the return of income assessee had shown rental income as �8,25,000/- from the former and �6,00,000/-
ITA No. 2166/Mds/2016. :- 3 -: from the latter, aggregating to �14,25,000/-. As per assessee both these properties were leased to M/s. Natyanjali Trust. Contention of the assessee was that No.6, Boat Club Road was earlier given out to another tenant from whom she had received �2,25,000/-. As per assessee the said premises when vacated by the earlier tenant was also given to M/s. Natyanjali Trust, apart from premise No.4, Sathyanarayana Avenue already occupied by them. Contention of the assessee was that a sum of �12,00,000/- received from M/s. Natyanjali Trust were rent for both these properties and the balance of �2,25,000/- was from earlier tenant of No.6. Boat Club Road, Chennai.
Assessee also submitted that she was the legal heir of Shri. C.H.
Sathish Reddy her husband who died in July, 2012, she was not having any access to the records relating to rental income having received from M/s. Natyanjali Trust. However, ld. Assessing Officer did not accept these contentions. He made an addition of �12,00,000/- and completed assessment.
Aggrieved, the assessee moved in appeal before ld. Commissioner of Income Tax (Appeals) but did not meet with any success.
Now before me, ld. Authorised Representative strongly assailing the orders of the lower authorities submitted that only major
ITA No. 2166/Mds/2016. :- 4 -: deposit of the bank account of the assessee apart from receipts from HDFC mutual funds was the sum of �12,00,000/- received from M/s.
Natyanjali Trust on 26.11.2004. Further according to him in the earlier years, assessee’s husband Shri. C.H. Satish, who was no more had filed returns showing rental income from very same property and from same tenant, which were accepted by the Department. Thus, according to him, the addition was unfairly made.
Per contra, ld. Departmental Representative submitted that assessment of Shri. C.H. Sathish for the assessment year 2004-05 which was relied on by the ld. Authorised Representative was completed u/s.143(1) of the Act and not after scrutiny.
I have considered the rival contentions and perused the orders of the authorities below. Income computation done by the ld. Assessing Officer in the assessment order for the impugned year is reproduced hereunder:- ₹10,93,948/- ‘’Returned Income : Add: 1. Disallowance of assessee’s claim towards payment of interest ₹ 1,41,596/- on Borrowed capital : 2. Credits found in the bank account ₹12,00,000/- added as income from other sources : ------------------ ₹24,35,544/- Assessed Income : -----------------
ITA No. 2166/Mds/2016. :- 5 -:
It is admitted by the ld. Assessing Officer that assessee had shown income of �14,25,000/-under the head ‘’Income from other House Property’’ which probably after statutory deduction came down to �10,93,948/-. Claim of the assessee is that �12,00,000/- out of the above rental income had come from M/s. Natyanjali Trust. There is no finding by the ld. Assessing Officer that the rentals were received by the assessee from any other person. No doubt lower authorities had pointed out that M/s. Natyanjali Trust, if it were actually the tenant, would have deducted tax and this was not done. Ld. Assessing Officer has also noted that M/s. Natyanjali Trust was no longer in existence when he was doing the reassessment. It in other words definitely show that the said trust did exist earlier. Though in an ideal situation, the matter should have been remanded back, considering the lapse of time a remand may not give any meaningful result, irrespective of whether the rental income shown by the assessee was from M/s.
Natyanjali or not. In any case such income was accepted by the ld. Assessing Officer. Undisputedly assessee had received a sum of �14,25,000/- as rental income during the relevant previous year.
There is no case for the Revenue that assessee has received the sum from M/s. Natyanjali Trust whose name is clearly mentioned in the bank statement, as a result of or in lieu of any services rendered by her or her husband. Considering the facts and circumstances, I am of ITA No. 2166/Mds/2016. :- 6 -: the opinion that preponderance of probability is that the sum of �12,00,000/- was nothing but a part of the house property income of �14,25,000/- returned by the assessee. I therefore delete the addition of �12,00,000/- made by the ld. Assessing Officer. Orders of the lower authorities to this extent is set aside. Ground No.4 of the assessee stands allowed.
In the result, the appeal filed by the assessee is partly allowed for statistical purpose.
Order pronounced on Wednesday, the 25th January, 2017, at Chennai.