TaxTMI 
TaxTMI 
2017 (8) TMI 26
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....an income of Rs. 2,22,210/-. The case was subsequently selected for scrutiny and assessment was completed under section 143 (3) of the Income Tax Act, 1961 (hereinafter called "the Act") at an income of Rs. 11,999,410/- which included addition in income from house property amounting to Rs. 2,77,200/- and addition under section 68 amounting to rupees 11,500,000/-. During the course of assessment proceedings, the AO observed that the assessee had properties at Saket and Panchsheel Park which, although remained vacant during the year, were ready to live in. The AO observed that the assessee had not included the annual rental value of these properties in his computation of income. The AO relied on internet search and based on the information av....
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.... (Appeals) reduced the notional rent to Rs. 12,000 per month instead of Rs. 22,000 per month as considered by the AO. On the issue of addition under section 68 of the Act, the Ld. CIT (Appeals) accepted the assessee's arguments and deleted the entire addition. 2.2 Aggrieved the Department has now approached the ITAT and has raised the following grounds of appeal - "1. Whether on the facts and circumstances of the case & in law, the Ld. CIT (A) erred in directing the A.O. to levy a notional rent of Rs. 12,000/- per month against the notional monthly rent of Rs. 22,000/- per month adopted by the A.O. 2. Whether on the facts and circumstances of the case & in law, the Ld. CIT (A) is arbitrary and unreasonable as the A.O. h....
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....restored. It was also submitted that the assessee had not preferred any appeal against the order of the AO in respect of the fair rental value and as such it underlined the correctness of approach of the AO. 3.1 On the issue of deletion of addition made under section 68 of the Act, the Ld. Departmental Representative submitted that the primary onus rested on the assessee but the same was not discharged by the assessee. It was further submitted that the notices issued under section 133 (6) of the Act were either returned un-served or were not complied with. It was also submitted that the AO had made adequate enquiries before making the addition and the Ld. CIT (Appeals) had erred in ignoring the findings of the AO in this regard. It was s....
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....ional was engaged. On the observation of the AO that it was unbelievable that so many persons had given interest free loans, it was submitted that it was a matter of agreement between two parties and the AO cannot step into the shoes of the businessman to decide whether a loan has to be given or not. The Ld. AR also refuted the allegation of the AO that only sketchy details were filed and submitted that all relevant details were filed which included PAN, confirmations, copies of ITRs acknowledgements, bank statements, copies of intimations under section 143 (1) and audited financial statements. On the issue of two companies having not been found by the inspector at the given Iddress, the learned authorised representative submitted that the ....
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.... the assessee has not challenged the action of the Ld. CIT (Appeals) in upholding the computation of notional rent to the extent of Rs. 12,000/- per month, we cannot grant any further relief to the assessee but deem it fit to dismiss ground numbers 1 and 2 of the Department's appeal. These grounds, accordingly, stand dismissed. 5.1 As far as the issue of deletion of addition under section 68 of the Act is concerned, it is seen that the Ld. CIT (Appeals) has observed in Para 6.3 of the impugned order that the records available indicate that the findings of the AO were selfcontradictory. The Ld. CIT (Appeals) has observed that the AO has mentioned that the notices under section 133 (6) were not served on the creditors due to non-availabili....
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....Act and that once the assessee has discharged his primary onus, the burden shifts to the AO to prove that the transaction of advance was not genuine. The Ld. CIT (Appeals) has relied on the judgement of the Hon'ble Delhi High Court in the case of CIT versus Value Capital Services Ltd. reported in 307 ITR 334 for the proposition that the burden was on the AO to show that the money received originated from the coffers of the assessee company. The Ld. CIT (Appeals) has further observed that the AO has not specifically brought any evidence to contrary to show that the transaction was not genuine and that the circumstantial probability discussed in the assessment order was not sufficient to contradict the transaction through banking channel. The....