2009 (12) TMI 672 - AT - Income Tax

Business income - Value of any benefit or perquisite arising from business or exercise of profession, Unexplained investments,

Issues Involved:
1. Deletion of addition on account of fair rental value of property.
2. Validity of reopening the assessment under section 147.
3. Taxability of gift received under section 28(iv).
4. Levy of interest under sections 234B and 234D.
5. Condonation of delay in filing the appeal.

Issue-wise Detailed Analysis:

1. Deletion of Addition on Account of Fair Rental Value of Property:
The Revenue challenged the deletion of an addition of Rs. 15,77,858 on account of the fair rental value (FRV) of a property at Jantar Mantar Road, New Delhi. The Assessing Officer (AO) determined the annual letting value of the property at Rs. 19,72,322, resulting in an addition of Rs. 15,77,858, arguing that the property was owned by the assessee and not the HUF. However, the Commissioner of Income-tax (Appeals) [CIT(A)] directed the AO to consider the annual letting value in the hands of the HUF, citing the balance sheet and Wealth-tax returns which showed the amount as a loan to the HUF. The Tribunal upheld the CIT(A)'s decision, noting the absence of contrary evidence from the Revenue and dismissed the Revenue's appeal.

2. Validity of Reopening the Assessment under Section 147:
The assessee contested the reopening of the assessment under section 147, arguing that the provisions were not applicable. However, this ground was not pressed before the Tribunal during the hearing and was consequently dismissed.

3. Taxability of Gift Received under Section 28(iv):
The assessee received a gift of Rs. 50 lakhs from Geetganga Leasing & Finance (P.) Ltd., which the AO taxed under section 28(iv) as professional fees. The CIT(A) upheld this decision, reasoning that the gift was a form of remuneration for the assessee's efforts. The Tribunal, however, found no evidence of services rendered by the assessee to the company and noted that section 28(iv) applies to non-monetary benefits or perquisites, not to cash receipts. Citing judicial precedents, the Tribunal concluded that the gift did not constitute a benefit or perquisite under section 28(iv) and deleted the addition.

4. Levy of Interest under Sections 234B and 234D:
The assessee challenged the levy of interest under sections 234B and 234D. The Tribunal noted that the levy of interest is mandatory as per the Supreme Court's decision in CIT v. Anjum M.H. Ghaswala and found no infirmity in its application. This ground was dismissed, but the AO was directed to allow consequential relief while giving effect to the order.

5. Condonation of Delay in Filing the Appeal:
The assessee's appeal was delayed by 62 days, and no application for condonation of delay was filed. The Tribunal found no evidence to support the claim of handing over the appeal papers to the CA firm and concluded that the assessee had not demonstrated sufficient cause for the delay. Consequently, the application for condonation of delay was rejected, and the appeal was dismissed as barred by limitation.

Conclusion:
The Tribunal dismissed the appeals of both the assessee and the Revenue, while the cross-objection was partly allowed. The key takeaways include the Tribunal's adherence to legal principles regarding the ownership of property, the non-taxability of cash gifts under section 28(iv), and the mandatory nature of interest levies under sections 234B and 234D.

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