2023 (9) TMI 147 - AT - Income Tax

Tribunal decision: Credits from aunt's FDRs allowed, partial disallowance of house property income upheld

Shri Amit Prabhudas Patel Versus The DCIT Panchmahal Circle, Godhra

Shri Amit Prabhudas Patel Versus The DCIT Panchmahal Circle, Godhra - TMI Issues Involved:1. Addition on account of unexplained credits to capital account.2. Addition on account of income from house property.Summary:1. Addition on Account of Unexplained Credits to Capital Account:The assessee, a practicing doctor, filed an appeal against the order confirming the addition of Rs. 13,69,371/- as unexplained credits to the capital account. The assessee claimed the amount was received from matured Fixed Deposit Receipts (FDRs) held jointly with his aunt, Smt. Sushilaben Patel, who had passed away. The assessee provided FDRs and other documents, including a family tree and a gift confirmation letter from the aunt's son, to substantiate the claim. However, the Assessing Officer (AO) and the First Appellate Authority did not find the explanation satisfactory, citing issues such as the unexplained source of the FDRs and discrepancies in signatures. The Tribunal, upon considering the facts and evidence, found that the relationship between the assessee and the aunt was established under Section 56 of the Income Tax Act, and the credits were from matured FDRs made by the aunt. Thus, the addition was deleted.2. Addition on Account of Income from House Property:The AO assessed an annual let-out value for three out of four residential properties owned by the assessee, estimating a fair rent at 15% of the total investment and adding Rs. 6,67,492/- as income from house property. The assessee argued that none of the properties were actually let out and claimed vacancy allowance, which would render the income as nil. The Tribunal considered the details of each property:- A house used as a staff quarter for MRI staff at Baroda.- A self-occupied flat at Baroda for personal stay.- An ancestral house in Karamsad, which is old and uninhabitable and belongs to the appellant's HUF.- A house in Ahmedabad purchased for medical needs but not let out.The Tribunal accepted the assessee's claims for the first three properties but directed the AO to estimate the fair rent at 15% for the Ahmedabad property, as the assessee failed to show efforts to let it out. Consequently, this ground of appeal was partly allowed.Conclusion:The appeal was partly allowed, with the addition on account of unexplained credits deleted and the addition on account of income from house property partly upheld.