TaxTMI 
TaxTMI 
1985 (9) TMI 133
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....e ground floor and upper portion. This agreement which is stated to have been entered in 1968 was for a period of five years. It is not clear form the orders of the lower authorities whether this agreement was further renewed after a period of five years. The assessee has been showing only the rent received from this so-called partnership firm B. K. Gupta, & Co. The ITO, however, made enquiries and found that the actual rent received was much higher and in respect of this property it was about Rs. 3,000 per month. According to him the total rent received from the let out portion was Rs. 29,500. The ITO proceeded to work out the income on the above basis. According to the ITO the assessee was the owner and was liable be the taxed on the actual rent received from this property. The AAC has upheld this action of the ITO. He referred to the amendment made in law, according to which, the actual rent has also to be taken into consideration for assessing the income from property. The AAC also directed that the above expenses claimed by the assessee should be considered and allowed to the extent they are established. 3. The ld. counsel for the assessee has submitted before us that the act....
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....ed on our file as the assessee's paper book makes it amply clear rather beyond any doubt that there was a lease agreement entered into by B. K. Gupta & Co. and the assessee. The subject-matter was a house and commercial shop commonly known as M-25, Greater Kailash-I,New Delhi. The said lease deed also makes it amply clear that B. K. Gupta & Co. was constituted by Shri Bal Kishan Gupta son of Shri Shankar Lal and Smt. Anjali Rani wife of Shri Brij Rattan Singhal (the assessee). The lease-deed is a registered document with endorsement No. 4030, Vol. 2000, Bahi No. 1A, pp. 103 to 105, registered with the competent authority (the Registrar). The lease-deed is on a non-judicial stamp paper of Rs. 101. This document warrants the one and the only irrefutable inference and it is that there was a lease agreement between the assessee and B. K. Gupta & Co. The tenure being five years and the corroborative evidence to the above is the copies of the following documents: (i) Compromise terms in the case of Barru Ram vs. B. K. Gupta & co. (suit No. 159 of 1969) entered into by the parties in that suit in the Court of Shri Mohammed Shamm, Add. Rent Controller,Delhiand it is dt.19th Dec., 1973; (....
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....Nos. 446, 463 and 464 of 1980-81 in relation to the asst. yrs. 1975-76 to 1977-78, on appeals by the assessee, observed as under: "In passing I may also observe that on the basis of the evidence as filed by the assessee before the ITO, the rent of the property originally fixed by virtue of the lease deed between the assessee and B. K. Gupta & Co, in 1968 was quite in keeping with the prevalent market conditions. This is so because as per the letter dt.18th July 1981of municipal corporation, the rateable value of the property in question has been fixed at Rs. 12,500 per annum w.e.f.1st April 1981subject to the dispute taken by the assessee and now pending before the Delhi High Court." 4. Yet that apart, the assessee vide a petition dt. 14th Dec., 1971 made with the Hon'ble High Court of Delhi at New Delhi, which petition has since been registered as Civil Writ No. 1311 of 1971, has made averments that the property M-25, Greater Kailash-I, New Delhi was let out to B. K. Gupta & co. on 26th June, 1968 by lease-deed only executed on stamped paper and registered as No. 4080, Bahl No. 1, pp. 103 to 105 dt.25th June 1968. The lease deed is annexed to the said petition as Annexure "A". T....
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.... the evidence relied upon by the assessee before us being of unimpeachable nature and cogent one, in a petty case like this which was a Single Member case transferred to the Division Bench because the Single Member case Bench was not functioning, will amount to a delayed justice. Among others, one of the glorious traditions of the Tribunal is to dispense quick justice unfettered by technicalities and rules of evidence, hence, on my part, I will rely upon the cogent evidence of the assessee and hold in his favour, with the result that the appeal succeeds and the returned income of the assessee stands accepted. ORDER UNDER S. 225 (4) OF THE INCOME TAX ACT, 1961 We, having differed in the above, case, proceed to draw up by the following point of difference and refer the case to the President, the Tribunal for referring the matter to one or more other Members of the Tribunal as required under s. 255(4) of the IT Act, 1961 ("the Act") "Whether on the facts and in the circumstances of the case, the order of the lower authorities require to be set aside with the directions as given in paragraph No. 4 of the order of the Accountant Member or the appeal by the assessee was to be accepte....
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.... Department did not prove that the lease was sham and the income earned by B. K. Gupta & Co. was received by the assessee. It was further pointed out that the Department acting upon this lease agreement has made an assessment for the asst. yr. 1969-70 on3rd Dec., 1971. It was further pointed out that the property having been leased to B. K. Gupta & Co., it was not open to the assessee to get them vacated. Moreover the municipal corporation fixed the latest rateable value of the property at Rs. 12,500 and that shows that the lease of Rs. 9,600 fixed long before the fixation of the rateable value by the municipal corporation was genuine. The AAC without dealing with all these points raised and concentrating her attention only on the question whether it was open to the ITO to adopt the actual rent received in preference to the rateable value, held that the action of the ITO was justified The matter then came before the ITAT. 2. After considering the contentions raised on behalf of the assessee and the Department, the learned Accountant Member, who spoke for the Bench in his leading order, observed thus. "4. We have perused the paper book filed by the assessee and we are of the view ....
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....s order to the advantage of his view and that is when the ITO could be directed to take fresh evidences, it is open to the ITAT whose powers are co-extensive with that of the ITO to look into the fresh evidence and record finding thereon the evidence provided by the assessee by way of Court cases which ultimately ended up in High Court provided ample proof that the lease was a very genuine arrangement and for this purpose there was no need at all to send the case back to the ITO. Thus, both the ld. brothers have differed and the following difference of opinion was referred to the President, who in turn nominated me as Third Member to resolve the differences, namely: "Whether on the facts and in the circumstances of the lower authorities require to be set aside with the directions as given in the para 4 of the order of the Accountant Member or the appeal by the assessee was to be accepted?" 3. I have gone through the record carefully and herd the ld. advocate for the assessee Shri Kishan Lal and the Departmental Representative Shri J. S. Rao. Naturally both of them depended upon those orders which are respectively in their favour. In particular the ld. Departmental Representative ....
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....ITO does not show any new facts having come to hi light nor the order of the AAC. This very point has come up for consideration in his asst. yr. 1977-78. The ITO after going through the entire record the agreement the evidence and the reports of the inspector came to the same conclusion as the ITO had come to in this year but on appeal the CIT (A) reversed it. Although the Department had preferred an appeal to the Tribunal, it did not question the conclusion reached by the CIT (A) at all either impliedly, or directly. It only questioned the conclusion of the Tribunal on the correctness of the application of the provisions of s. 147(a). The Tribunal held that s. 147 (a) was rightly inapplicable and a reference application filed thereon was also rejected. Thus the conclusion reached by the CIT (A) on appeal on merits had become final, the Department not having agitated that conclusion in appeal it accepted or must be deemed to have accepted. Such being the position and in the absence of any new facts the question is, is it open to the ITO to doubt the arrangement arrived at and call it a device or a novel method adopted and is it open to the Tribunal to direct the ITO to re-examine i....
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....he rent was Rs. 500 per month and that he was paying the rent to Smt. Anjali Rani and Shri B. K. Gupta. He also submitted that on his failure to pay the rent a suit was instituted by Smt. Anjali Rani as partner of the firm B. K. Gupta & Co. on on-payment of the rent in T is Hazari Court before Senior Sub-Judge and a decree of Rs. 18,000 was obtained and that the goods worth Rs. 18,000 were attached, that he had to pay the sum of Rs. 18,000 to account of the decree executed against him and another sum of Rs. 9,200 towards rent. Thus a total sum of Rs. 27,200 was recovered from him. The Income-tax inspector attached to the ward was also deputed and he also gave his report. The ITO went into the lease did and recorded his finding thereon in the assessment order and the assessment order shows that a detailed enquiry was made and in a very exhaustive way. The eventual conclusion reached by him was that the entering into of lease agreement with B. K. Gupta & Co. was only a device adopted by the assessee to provide a sort of smoke screen to show that the income was not realised by him but by the firm of B. K. Gupa & Co. He also referred to the point that under s. 22 as well as s. 23 of th....