Appeal Granted: Tax Order Overturned Due to Rent Dispute

The appellant, an individual, challenged an order under the Income Tax Act for AY 2017-18, citing natural justice violations and disputing the addition of Rs. 50,29,290 as 'Income from House Property'. The Assessing Officer's inclusion of rent income from ICICI Bank was contested, with the appellant asserting it was for a prior year. The Tribunal ruled in favor of the appellant, finding the AO's notional income assessment unjustified as the actual rent had been declared and taxed. As a result, the Tribunal allowed the appeal, removing the disputed income addition.

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Issues Involved:
The issues involved in this case are:
1. Natural justice violation in framing the appellate order.
2. Addition of Rs. 50,29,290 as income under the head 'Income from House Property'.
3. Liberty to add, alter, delete, or modify grounds during the hearing.

Issue 1: Natural Justice Violation:
The appeal pertains to Assessment Year (AY) 2017-18 and challenges the order passed by the Learned Commissioner of Income Tax (Appeals) arising from an assessment order under section 143(3) of the Income Tax Act, 1961. The grounds of appeal raised by the assessee include contentions about the order being framed in breach of natural justice principles and being passed without proper opportunity for the appellant to be heard. The appellant argued that the order was perverse and lacked application of mind to the facts on record.

Issue 2: Addition of Income from House Property:
The Assessing Officer noted a significant difference between the amount credited in Form 26AS and the income shown in the assessee's return. Specifically, the AO observed that rent income of Rs. 25,92,000 from ICICI Bank Limited was not included in the house property income of the assessee. Despite the assessee's explanation that the rent was for the previous year, the AO added Rs. 50,29,290 as income under the head 'Income from House Property'. The assessee contended that no such addition was warranted, and even if necessary, the computation was arbitrary and excessive.

Issue 3: Liberty to Modify Grounds:
The appellant sought liberty to add, alter, delete, or modify the grounds raised during the hearing, indicating a request for flexibility in presenting arguments or contentions as the case progresses.

In the case, the appellant, an individual, leased property to ICICI Bank Limited. The Assessing Officer added Rs. 50,29,290 as income under 'Income from House Property' due to discrepancies in rent income disclosure. The appellant argued that the rent received was only for 18 days in the relevant assessment year, supported by termination of the lease agreement by ICICI Bank. The Tribunal found that the actual rent received for the period had been declared and taxed, and the notional rent assessed by the AO was unwarranted. Considering the evidence presented, the Tribunal allowed the appeal, deleting the notional income assessed by the AO.

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