TaxTMI 
TaxTMI 
2026 (2) TMI 1368
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....on 143(1) of the Act. The case was selected for scrutiny under CASS for the reason that "New foreign asset in nature of account(s) in which taxpayer is a signing authority (Business ITR)" had been noticed. 3. During the course of assessment proceedings, the AO noticed increase in the peak balance in Bank of Singapore account No. 681966 standing in the name of the assessee. The assessee explained that the increase represented rental receipts and advance rent received in respect of a property situated in Dubai jointly owned with her husband. The AO observed that the assessee had offered rental income of Rs. 11,59,863/- under the head "Income from House Property" and admitted receipt of advance rent of Rs. 22,49,854/-.The advance rent was not offered to tax in the year under consideration. The copy of bank statement was not furnished for verification. Accordingly, the AO held that the increase in peak balance to the extent of Rs. 22,49,854/- remained unexplained and added the same under section 68 read with section 115BBE of the Act treating it as unexplained cash credit. 4. The AO further observed that the assessee was a signing authority in foreign bank accounts: i. B....
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....nd tenancy agreement, a sum of Rs. 22,49,854/- was received in advance towards rent. The assessee contended that such advance rent pertained partly to Assessment Year 2023-24 and partly to Assessment Year 2024-25. It was further submitted that rental income had been offered proportionately in the respective years in accordance with the period to which it related. In support of this contention, the assessee placed on record the return of income for A.Y. 2024-25 evidencing inclusion of the balance portion of rental income relatable to that year. The Ld. CIT(A), after considering the material on record, held that the source of receipt of Rs. 22,49,854/- was clearly identifiable as advance rent received under a valid tenancy agreement and, therefore, the same could not be treated as unexplained cash credit under section 68 of the Act. However, since the rent was admittedly received during the year under consideration, the Ld. CIT(A) held that the same was liable to be taxed on receipt basis as income from house property in A.Y. 2023-24. Accordingly, the addition was sustained as regular house property income and not as unexplained cash credit. At the same time, the Ld. CIT(A) directed ....
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....g ownership of the company's asset to the assessee. Since notional rent under the head "Income from House Property" can be assessed only in the hands of the owner or deemed owner, the Ld. CIT(A) held that such addition could not be sustained in the hands of the assessee. Accordingly, the addition of Rs. 1,51,27,315/- was deleted. 12. Aggrieved by the order of CIT(A), the revenue is in appeal before us raising following grounds of appeal: 1. On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition Rs. 22,49,854 made under section 68 r.w.115BBE of the Income Tax Act without appreciation of facts and law. 2. On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition Rs. 7,31,35,963 made under section 68 r.w.115BBE of the Income Tax Act without appreciation of facts and law. 3. On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 1,51,27,315/- under the head Income from House Property by ignoring beneficial ownership of the assessee. 4. The appellant craves to leave, to add, to amend and / or to alter any of the ground of appeal, if need be.....
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....ocumentary evidences filed by the assessee. The learned AR submitted that the tenancy contract dated 13.02.2023 entered into with Phoenix Universal General Trading L.L.C. is placed at page 16 of the paper book. The said contract clearly records the names of the lessors as Shri Kamal Shrigopal Khetan and Smt. Manisha Kamal Khetan and specifies the contract period from 15.02.2023 to 14.02.2024 with annual rent of AED 230,000/- payable in one instalment. He further submitted that the computation of income and working of rental income for the year under consideration are placed at pages 5 to 8 of the paper book, evidencing that the rental income pertaining to the relevant period was duly offered to tax. The return of income for the subsequent assessment year, wherein the balance rent was offered, is placed at pages 9 to 12 of the paper book. The learned AR pointed out that the bank book of Bank of Singapore Account No. 681966 reflecting the receipt of rent are placed at pages 6 of the paper book and the summary of peak balance is also placed therein. It was submitted that all these documents were filed before the Assessing Officer during assessment proceedings and the learned CIT(A) ha....
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....ich specific reference was made during the course of hearing. 19. At the outset, it is necessary to deal with the preliminary objection of the learned DR that the documents relied upon by the assessee require verification by the Assessing Officer and that the matter ought to be restored to his file. On a perusal of the reply of the assessee placed on record as well as the impugned order, we find that the assessee had, in response to the show cause notice dated 28.11.2024, furnished detailed written submissions along with documentary evidences including tenancy contracts, bank statements, trust documents and explanatory notes on peak balances. The learned CIT(A) has recorded a categorical finding that the evidences were available on record and were considered while adjudicating the appeal. The learned DR has not been able to point out any specific document which is being relied upon for the first time before the Tribunal. In these circumstances, we do not find merit in the prayer for remand merely for the purpose of re-appreciation of the same material. A remand cannot be granted to enable the Revenue to conduct a fresh enquiry when the matter has already been examined on the bas....
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....unts in question were in the name of separate legal entities namely Skyways International Pte. Ltd. and Parkland Investments Ltd., and that the assessee was neither the legal owner nor beneficial owner of the funds therein. It has further been held that mere signatory authority does not ipso facto establish ownership and that section 68 can be invoked only in respect of credits appearing in the books of the assessee. 25. We have perused the relevant documents placed in the paper book. The bank accounts in question are admittedly not in the personal name of the assessee. No material has been brought on record by the Assessing Officer to demonstrate that the corporate entities were sham or mere conduits of the assessee. The addition is premised solely on the fact of signatory authority and alleged beneficiary status. Such a presumption, in absence of evidence establishing ownership or control of funds as alter ego, cannot sustain an addition under section 68.The learned DR has not pointed out any specific material to contradict the factual findings recorded by the learned CIT(A). In absence of evidence to lift the corporate veil or to establish that the monies represented undisclo....