TaxTMI 
TaxTMI 
TaxTMI 
2021 (7) TMI 713
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.... covered. Accordingly, the proceedings u/ s 153A was initiated and a notice u/s 153A off the Act was issued requiring the assessee to furnish true and correct returns of income. In response thereto, the return of income were filed u/s 153A. The assessee has filed the return of income on 17.03. 2010 for the assessment year 2009-10 declaring an income of Rs. 50,41,060 /-. 4. The case was selected for scrutiny and statutory notices were issued and served. The assessment was completed u/s 153/143(3) vide order dated 30.03.2016 by the AO, at an income of Rs. 3,94,12,138/- making the following additions/disallowances: i. Unexplained expenditure Rs. 3,30,00,000/- ii. Rental income Rs. 13,57,351 /- 5. Brief facts of this issue are that the marriage of Sh. Kamal, son of the assessee namely, Sh. Ashok Kumar Choudhary (AKC) was performed with Ms. Devika daughter of Sh. Trilok Chand Choudhary(TCC). A search u/s 132A was conducted at the residential premises of both Shri Ashok Kumar Choudhary, the assessee as well as that of TCC. During the course of search at the residence of AKC, a list of various valuable items was found and was seized as Annexure A5 by party AF-1. The valuation of v....
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....is not the owner of this property but has taken this property on rent form a person called Abdul Hameed and sub-letted this property to another tenant. The assessee has claimed standard deduction of 30% on income from house property u/ s 24(a) of the I.T. Act. As per provisions of section 56 of the I.T. Act, income for sub- letting is considered to be income from other sources. Thus, the standard deduction of 30% on rental income claimed by the assessee is incorrect and unjustified. Hence, the standard deducting of Rs. 13,57,351 /- claimed by the assessee is being disallowed and added back to the total income of assessee. Since the assessee has concealed his income and furnished inaccurate particulars of his income resulting in escapement of Income, penalty proceedings u/s 271(1)(c) of the I. T. Act, 19612 is to be initiated separately." 13. During the appellate proceedings, the ld. AR filed the following written submission before the ld. CIT (A) as extracted from the order: "A sum of Rs. 13,57,351 has been added to the income to the assessee. Assessee has sub-letted the property at G-4, NDSE, Delhi and has earned rental income of Rs. 45,24, 503/- declared in the return of incom....
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....pplication under Rule 46 A has been moved in this regard. We pray this application should be disposed off before deciding appeal. (iv) The assessee is receiving rent from sub-tenant in his own capacity as the owner of the house. (v) Since the assessee is a tenant older than 12 years in this property, assessee falls in the definition of the owner for the purpose of being assessed under the head "Income from House Property", therefore disallowances made in this regard should be deleted and income should be treated as income under the head " income from House Property". (vi) Reliance is placed on the following Judicial Pronouncements: a. Radio Components & Transformers Pvt. Ltd. Vs ITO (2012) 18 taxman. com 102/ 50 SOT 237 (Mum ITAT) (Please see page no 28 to 47 of appendix) Where assessee was in possession of property with tenable rights and had been received rent from sub tenants in their own capacity being owner of the house, however authority rightly treated him as deemed owner." 14. During the appellate proceedings, the ld. AR filed additional evidences u/r 46A on 02.12.2016 submitting as under: "6. A sum of Rs. 13,57,069 has been disallowed being standard deductio....
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.... per which the original owner of the property authorized to assessee to give the said property on rent to third party as sub- tenant upto 31.03.2014. However, the same was not registered. 3.3 Hence, from the above it is clear that the assessee had failed to submit the copy of registered lease deed extending the same for further period, i.e. upto 31.03.2014. 3.4 Further, it is noted that as per the above agreement, the assessee had given the said property to sub-tenant on monthly rent of Rs. 3.40 lakhs, i.e. 40.80 lakhs per year but it is seen that in computation the rental income from said property shown of Rs. 45.60 lakhs which is not verifiable from the said agreements. Further, it is also noted from the TDS details available on reocrd that the sub- tenant had deducted the tax of Rs. 7,47,780/-, i.e. @ 15% on total rental income of Rs. 49.85 lakhs. Hence, the same is also not verifiable from TDS details. In light of the above, the affidavit so filed by the assessee is not acceptable and is just afterthought. 3.5 From the said agreement, it is clear that the said property was taken by the assessee to earn the rent from sub- tenancy. Hence the deduction u/s 24(a) of the Act i....
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....,069/- u/ s 24(a) OF THE IT ACT, 1961 1. The property in question was taken on rent on 01.12.1989. During the Assessemnt Year 2009-10, the same was with assessee nearly for 20 years. Therefore, as per provision of section 27(iii)(b) read with clause(f) of section 269 UA, assessee become deemed owner of the property for the purpose of taxing him as the owner of the property. 2. The plain reading of law itself is very clear that if the property in question is taken on lease for more than 12 years the lessee shall be treated as deemed owner of the property and rental income earned by such lessee will be assessed in his hands under the head " income from house property." 3. The case of the assessee is also duly covered by the judgment of Hon' ble Supreme Court in the case of Raj Dadarkar vs ACIT [81 taxmann.com 193(SC)j pronounced on 9th May 2017 (copy enclosed) where it has been held where lease hold rights are acquired for more than 12 years, by assessee he shall be treated as deemed owner u/s 27(iii b) and income of such sub- letting shall be that assessed under the head income from house property. (Please refer para 10 of the order)" 18. The ld. CIT (A) has taken into co....