2009 (9) TMI 959 - AT - Income Tax

Summary

Issues involved: Determination of ownership of property for assessment of rental income and consideration of evidence regarding the same.

Summary:
The appeal was filed by the assessee against the order of the Commissioner of Income-tax (Appeals) - V, Bangalore for the assessment year 2005-06. The assessee, an individual and Kartha of his HUF, had purchased land and constructed a factory building, which was let out to a tenant. The issue arose when the tenant deducted tax at source and quoted the PAN of the individual instead of the HUF. The Assessing Officer (AO) assessed the rental income in the hands of the individual, leading to an appeal before the CIT(A) and subsequently before the ITAT.

The assessee contended that the rental income should be assessed in the hands of the HUF, providing evidence to support this claim. The ITAT examined the rent agreement, lease agreement, and possession certificate, all of which indicated the individual as the owner of the property. The agreements did not mention the HUF, and the individual had signed the agreements in his personal capacity, not as a member of the HUF. Therefore, the ITAT upheld the orders of the lower authorities, concluding that the property belonged to the individual and the rental income should be assessed in his hands. The ITAT suggested that any rectification regarding the declaration of rental income by the HUF should be pursued by the HUF-assessee.

In light of the evidence and agreements presented, the ITAT dismissed the appeal of the assessee, affirming the assessment of rental income in the hands of the individual.