TaxTMI 
TaxTMI 
2021 (10) TMI 410
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.... of total income, the assessee was required to show the global income in his return filed for A.Y. 2016-17 under the provisions of section 95 of the IT Act. During the course of assessment proceedings, the AO asked the assessee to explain as to why the rental income earned from the property situated in USA should not be taxed in India under the provisions of sections 23 to 27 under the head 'Income from house property.' Since the assessee, according to the AO, did not furnish any explanation on this issue, the AO determined the income from the house property situated in USA at Rs. 4,80,678/- by computing as under:- 3. Similarly, the AO observed from the narration of the credit side entries of Chase bank (foreign) account statement that the assessee has reflected the friendly loan of 15000 Dollars received from Mr. Naresh Aggarwal, NRI during the period 01.04.2015 to 31.03.2016. He asked the assessee to furnish the confirmation of loan received from Mr. Naresh Aggarwal, NRI, the lender. The assessee uploaded the replies on ITBA portal on 17.12.2018 without any confirmation of the lender. The AO, therefore, held that the assessee failed to furnish the confirmation in respect of US....
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....tion of USD 15000, equivalent to Indian rupee 9,93,000/-, the CIT(A) confirmed the addition by observing as under:- "14. Decision 14.1 Brielly, the facts are that the Assessing Officer noticed credit side entries of Chase Bank (Foreign Bank) and from US $ 15,000 claimed as friendly loan received from Mr. Naresh AggarwaL NRI during the year under consideration. The Assessee submitted his explanation before the Assessing Officer online and no confirmation from the lender was submitted. In view of this the Assessing Officer has added US $ 15,000 loan equivalent to Rs. 9,93,000/- to the total Income. 14.2 The Appellant has submitted that he has furnished the copy of the confirmation of the loan from Sh. Navin K. Aggarwal, copy of passport as additional evidence. The application filed by the Appellant was sent to the Assessing Officer (vide letter dated 27.06.2019), The Assessing. Officer has submitted his report dated 03.07.2019. In this report, the Assessing Officer has stated that the case for submission of reply was fixed for 17.12.2018. The Assessee uploaded the set of replies / evidences which were considered while completing the assessment. Remaining re....
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....of section 68 of the IT Act, the Assessee was under legal obligation to prove that the lender / lenders had the capacity to advance the money to him. Accordingly, the addition made by the Assessing Officer is confirmed." 5. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds:- "1. That on the facts & in the circumstances of the case and in law, the order passed by the Ld. Commissioner of Income Tax (Appeals) [CIT(A)] is wrong and bad in law. 2. That the Ld. CIT (A) and Ld. AO erred both on facts and circumstances of the case and in law in making addition of Rs. 4,80,678 under the head Income from House Property by rejecting the submissions and documentary evidence filed before Ld. A.O. The addition made is arbitrary and bad in law, therefore, Liable to be quashed. 3. That the Ld. CIT (A) erred on facts and circumstances of the case in confirming the addition made by Ld. AO of Rs. 9,93,000 by treating the loan taken from the relatives as unexplained cash credits. The addition has been made on surmises and conjectures by rejection documentary evidences and explanations filed before them.....
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....e details were also filed, copy of which is placed at pages 34-43 of the paper book. He accordingly submitted that when every detail was filed before the AO and the CIT(A), disallowance of the property tax and interest expenses as per provisions of section 24 of the IT Act by the AO and upheld by the CIT(A) is not correct. 6.1 So far as the addition of USD 15000, equivalent to Indian currency Rs. 9,93,000/- is concerned, he submitted that during the course of assessment proceedings, the AO asked the assessee to file its confirmation. Since lender was in USA and the assessee was in India, obtaining the confirmation took some time and it was uploaded on the ITBA portal on 18th December, 2018 along with passport of Shri Navin Kumar Aggarwal. However, the AO, without verifying the same, passed the assessment order on the very same day i.e., 18th December, 2018 and made the addition of Rs. 9,93,000/-. Even in the remand report also, the AO had accepted that the assessee has uploaded the details on 18th December, 2018. He submitted that the ld.CIT(A) without appreciating the facts properly, sustained the addition made by the AO which is not justified. He submitted that the assessee ha....
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....ut, the assessee did not furnish the same. However, a perusal of the paper book shows that the assessee has filed the mortgage interest statement in the paper book which gives the details of mortgage interest, mortgage principle, etc. Therefore, in my opinion, the ld.CIT(A) is not justified in denying the benefit of interest on bank loan to the assessee. I, therefore, set aside the order of the CIT(A) and direct the AO to allow the claim of property tax and bank interest from the rental income of USD 16800. The ground of appeal No.2 raised by the assessee is accordingly allowed. 12. So far as the addition of Rs. 9,93,000/- made by the AO by treating the loan taken from relatives as unexplained cash credit is concerned, I find, the AO made the addition basically on the ground that the assessee could not furnish the confirmation of lender Mr. Naresh Aggarwal during the course of assessment proceedings. However, during the course of appellate proceedings, the assessee filed the copy of confirmation by Shri Naresh Aggarwal confirming the lending of USD 15000. I find from the details furnished by the assessee that the AO, vide order sheet entry dated 8th December, 2018, had asked the....