TaxTMI 
TaxTMI 
2026 (1) TMI 5
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....nting to Rs. 11,02,500/- on account of rental receipt from M/s leadspace under the head income from other sources. 3. The NFAC erred in assuming that there was no agreement with respect to the rental receipts whereas the fact remains that an agreement was entered into between the appellant and M/s leadspace for a period of 9 years commencing from 01.11.2014. 4. The NFAC ought to have noticed that as per the agreement dt. 01.10.2014 greenland side on terrace of the GS Shamlal icon was allotted to M/s leadspace for utilisation of the same to construct hoarding and thus the rent received therefrom is nothing but the income referable to the allotment of space of the building. 5. The NFAC erred in confirming the addition made by AO amounting to Rs. 35,13,000/- on account of cash deposits in bank account as unexplained income even though the appellant has submitted a cash flow statement explaining the fact that the aforesaid amount emanated from the cash in hand available with the appellant. 6. The NFAC erred in confining itself to the figure appearing under schedule AL in the return of income since the said figure was mistakenly entered by the account....
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.... the demonetization period. 4. During the course of the assessment proceedings, the Assessing Officer ("the AO") observed that the assessee in the demonetization period had made cash deposits of Rs. 35.13 lacs in his bank account No.118001000030501 with Indian Overseas Bank. It was further observed by him that the aforesaid bank account held by the assessee with Indian Overseas Bank was not disclosed by him in the return of income. As the assessee had failed to come forth with any explanation regarding the source of the cash deposit of Rs. 35.13 lacs (supra) in his bank account, therefore, the AO held the same as having been sourced out of his unexplained money u/s 69A of the Act. Apart from that, the AO observed that though the assessee as per 26AS had received an amount of Rs. 11,02,500/- towards rent from M/s Lead Space, but had not disclosed the same in his return of income. On being queried, the assessee though claimed that he had not received the aforesaid income, but he failed to corroborate the same. Accordingly, the AO made an addition of the undisclosed rent receipt in the hands of the assessee and vide his order u/s 143(3) dated 10.12.2019 determined his income at Rs.....
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....under the head "Income from Other Sources" and deduction u/s 24 of the Act should to be allowed at 30% of rental receipts of Rs. 3,30,750/- should be allowed. It has been claimed by the appellant that rent received was against Mounting Antenna and hence income thereupon should be treated as "Income from House Property". The appellant relied upon the following judicial pronouncements in this regard i. Nayagara Hotels & Builders Pvt Ltd Vs. CIT [2015] 60 taxmann.com 83 (Delhi) ii. Manpreet Singh Vs. ITO (ITA No. 3976/Del/2013) iii. Bhimanagr Co-op Housing Society Ltd Vs. ITO (ITA No. 423/Ahd/2012) 6.2. I have duly considered the submissions of the appellant and materials on record. In the case of Hon'ble Calcutta High Court in the case of Mukherjee Estate (P.) Ltd. Vs. CIT [2000] 113 Taxmann 313 (CAL) has held that the income from hoardings permitted by the assessee to other persons is assessable as income from other sources. Relevant extract of the order is as under - 2. The assessee derives income from house property, business, capital gains and other sources. The business of the assessee consists of letting out on hire of cinema hall, s....
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....mpugned rental income. 6.3. In the case relied upon by the Appellant viz., Nayagara Hotels & Builders Pvt Ltd (Supra), there was existence of "Leave and Licence Agreement" for the use of space whereas in the present case, the appellant has not placed copy of any agreement either during the assessment proceedings not in appellate proceedings. The income received was for the use of space or only erecting of hoarding has not been made clear by the appellant by placing copy of agreement, if any, on record. In the case of Nayagara Hotels & Builders Pvt Ltd (Supra), decision of Mukherjee Estate (P.) Ltd. (Supra) has been discussed and was distinguished on this issue alone. Therefore, the decision in the case of Nayagara Hotels & Builders Pvt Ltd (Supra) is distinguishable on facts and is not applicable in the present case. 6.3. Another decision relied upon by the Appellant viz., Manpreet Singh Vs. ITO (ITA No. 3976/Del/2013) is also distinguishable on facts wherein also the decision of Mukherjee Estate (P.) Ltd. (Supra) has been discussed and was distinguished on the issue that in the case of Mukherjee Estate (P.) Ltd. (Supra) the issue was in respect of rent was only f....
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.... over a period of time and the appellant was assessed to tax on higher incomes as mentioned in the earlier paragraph. The details of availability of cash is also clear from the cash flow statement filed along with the return of income. Therefore, the Assessing Officer is not justified in mentioning that the appellant did not furnish the information with regard to cash deposits. 7.1. In his submissions, the appellant has stated to have sufficient cash with him and the cash deposits were made out of the available cash. It has further been stated by the appellant that he was having opening cash balance of Rs. 36,66,031/- as on 31.03.2016. In this regard, I have verified the copy of ROI filed by the appellant for the A.Y. 2016-17 wherein there is Schedule AL as under - Above Schedule AL clearly shows that the cash balance as on 31.03.2016 available with the appellant was Rs. 1,06,092/- and not Rs. 36,66,031/- as claimed in the submissions made during the course of appellate proceedings. The figures reported in the ROI has credential value and cannot simply brushed up and set aside. The appellant has not provided any material in contravention to these facts. Therefore,....
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....d "Other sources", the Ld.AR submitted that as the assessee had received the said income from letting out of the terrace, where the hoarding was put, therefore, the same was liable to be assessed under the head "house property". The Ld.AR to buttress his aforesaid claim had drawn support from "Form 26AS" for the subject year, which, inter alia revealed that the TDS on the rental receipts in question was deducted u/s 194I(b) of the Act. The Ld.AR had further drawn support from certain judicial pronouncements. 10. Per contra, the Ld. DR relied upon the orders of the lower authorities. The Ld. DR submitted that as the assessee had in his return of income for the A.Y.2016-17 claimed that cash in hand of Rs. 1,06,092/- was available with him on 31.03.2016, therefore, he cannot be permitted to state a fact contrary to the record and claim availability of cash in hand of Rs. 36.66 lacs (supra) on 31.03.2016. Elaborating further, the Ld. DR submitted that the "balance sheet" filed by the assessee for the year ending 31.03.2016 could not be acted upon as the same was not filed along with the return of income and had no evidentiary value. The Ld. D.R further submitted that as the assessee....
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....view taken by the lower authorities, who had rightly brought the same to tax as his income under the head "Other sources". We say so, for the reason, that a perusal of the "agreement" dated 01.10.2014 executed between the assessee and M/s Lead Space, reveals beyond doubt that the same was for the installation of one advertisement hoarding on the terrace of the property owned by the assessee. On a careful perusal of the terms of the aforesaid "agreement", it transpires that the assessee had agreed to the erection of one hoarding of size 70"x40" on the terrace of his property, i.e., Plot No.1-11-89, located at S.P.Road, Begumpet, Secunderabad. Also, in unequivocal terms, it is stated in the "agreement" that an amount of Rs. 10,00,000/- per annum would be received by the assessee for ground rental for putting up the hoarding on his aforementioned property. Considering the facts as are discernible from the aforesaid "agreement" dated 01.10.2014, we are of the firm conviction that as the assessee had received the rental income of Rs. 11,02,500/- for putting up of the hoarding on the aforesaid property and not for letting out of the terrace or any part thereof, the same had rightly been ....