Tribunal directs deletion of unexplained loan addition, remands house property income issue for fresh adjudication

The Tribunal allowed the appeal, directing the AO to delete the addition of Rs. 1,53,62,570/- on account of an unexplained loan. The issue of Rs. 10,99,904/- added as income from house property was restored to the AO for fresh adjudication, following the decision in the case of the assessee's husband. The appeal was partly allowed for statistical purposes.

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Issues Involved:
1. Addition of Rs. 1,53,62,570/- on account of unexplained loan.
2. Addition of Rs. 10,99,904/- on account of income from house property.

Issue-wise Detailed Analysis:

1. Addition of Rs. 1,53,62,570/- on Account of Unexplained Loan:
The assessee, an individual with income from house property, capital gain, and other sources, was subject to a search and seizure operation under sections 132 and 133A of the Income Tax Act, 1961, which targeted the premises of Aseem Kumar Gupta and associated entities. The Assessing Officer (AO) noted that Rs. 1,53,62,570/- was credited in the assessee's books, comprising a loan of Rs. 1,47,50,000/- from Ganpati Fincap Services Pvt. Ltd. and interest of Rs. 6,12,570/-. The AO established that Ganpati Fincap Services Pvt. Ltd. was a fictitious entity controlled by Aseem Kumar Gupta for providing accommodation entries, as admitted by Gupta in his statements. The AO incorporated relevant portions of Gupta's statements and listed seized materials, including cash deposit slips, signed cheque books, and documents detailing accommodation entries, which supported the conclusion that Gupta was running a business of providing accommodation entries through various controlled entities, including Ganpati Fincap Services Pvt. Ltd.

The AO observed that the list of beneficiaries provided by Gupta included the assessee, her husband, and their HUF, with specific details matching the so-called loans. The AO concluded that the loan was merely an accommodation entry and added Rs. 1,53,62,570/- to the assessee's income as unexplained loan. The CIT(A) upheld the AO's addition, noting that the assessee failed to establish the identity, creditworthiness, and genuineness of the transaction, and the intermediary companies were fictitious entities created for providing accommodation entries.

In appeal, the Tribunal considered the case of the assessee's husband, where a similar addition was deleted. The Tribunal noted that the assessee had provided sufficient documentary evidence, including loan agreements, confirmations, and bank statements, which were not disputed by the AO. The Tribunal found that the AO's reliance on Gupta's statements and seized materials, obtained at the back of the assessee and without providing an opportunity for cross-examination, violated the principles of natural justice. The Tribunal held that the assessee had discharged the initial onus to prove the identity, creditworthiness, and genuineness of the transaction and directed the AO to delete the addition.

2. Addition of Rs. 10,99,904/- on Account of Income from House Property:
The AO observed that the assessee owned several immovable properties but declared rental income only for two properties. The AO determined the annual value of three additional properties and added Rs. 10,99,904/- to the assessee's income as income from house property. The CIT(A) upheld the AO's action, stating that the charge is levied on the owner of the property, and it is immaterial whether the owner is in possession or enjoying the property.

In appeal, the Tribunal considered the case of the assessee's husband, where a similar issue was restored to the AO for fresh adjudication. The Tribunal directed the AO to adopt the annual rental value of the properties with specific directions. Following this precedent, the Tribunal restored the issue to the AO for fresh adjudication in light of the decision in the husband's case.

Conclusion:
The Tribunal allowed the appeal regarding the addition of Rs. 1,53,62,570/- on account of unexplained loan, directing the AO to delete the addition. The issue of Rs. 10,99,904/- on account of income from house property was restored to the AO for fresh adjudication, following the decision in the case of the assessee's husband. The appeal was partly allowed for statistical purposes.

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