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2020 (3) TMI 1284 - AT - Income TaxLower rent income in Return of Income - as argued by assessee actual rent income earned and accrued to Appellant has been shown in Return of Income and no further addition is called for - HELD THAT - AR placed reliance on assessment framed u/s. 143(3) r.w.s. 147 for AY 2010-11 on 21/10/2013 to submit that a new MOU was entered into between the co-owners on 21/10/2011 wherein the assessee and Mrs. Lataben paid a sum of ₹ 35 Lacs to Mrs. Chaulaben D. Doshi which would substantiate the fact that the money was advanced by Mrs. Chaulaben D. Doshi to facilitate the purchase of property and therefore the right of Mrs. Chaulaben D. Doshi and Mrs. Darshnaben A. Patel was undisputed. Considering the same, the proportion of rent as offered by respective co-owners were accepted by Ld. AO. DR submitted that the said assessment was framed after the date of impugned order and further the issue of TDS credit would require to be reappreciated. Upon due consideration of factual matrix, the bench formed an opinion that considering the assessment framed for AY 2010-11 which is subsequent to the date of impugned order, it would be in the fitness of things to restore the matter back to the file of Ld. CIT(A). Therefore, the matter stand remitted back to the file of Ld. CIT(A) for re-adjudication.
Issues Involved:
1. Addition of lower rent income in the return of income. 2. Assessment of rent income in the hands of the appellant. 3. Validity of MOU in determining ownership and rental income distribution. 4. Reappreciation of TDS credit issue post-assessment for AY 2010-11. Issue 1: Addition of Lower Rent Income: The appellant contested the addition of ?10,88,446 made by the Assessing Officer due to showing lower rent income in the return of income. The appellant argued that the actual rent income earned and accrued was correctly shown in the return, and no further addition was warranted. The CIT(A) upheld the addition, leading to the appeal. Issue 2: Assessment of Rent Income: The CIT(A) upheld the action of the Assessing Officer in assessing rent income of ?18,14,076 entirely in the hands of the appellant, despite the appellant showing a lower income of ?7,25,630. The appellant claimed that the remaining income was shared among other co-owners, and should not be taxed in their hands due to an overriding title. Issue 3: Validity of MOU and Rental Income Distribution: The property in question was jointly owned, and a MOU was entered into among the co-owners regarding the rental income distribution. The MOU was deemed an afterthought to divert rental income, as it was created after the lease agreement. The CIT(A) confirmed the Assessing Officer's decision to tax the entire rental income in the appellant's hands, disregarding the MOU's terms. Issue 4: Reappreciation of TDS Credit Post-Assessment: The appellant relied on an assessment for AY 2010-11 to argue that a new MOU was entered into among co-owners, affecting the rental income distribution. The issue of TDS credit was raised, and the appellant sought reappreciation. The Tribunal decided to remit the matter back to the CIT(A) for re-adjudication in light of the submissions made by the appellant, including a review of the TDS credit issue. In conclusion, the Tribunal allowed the appeal for statistical purposes, directing the matter to be reconsidered by the CIT(A) in light of the subsequent assessment for AY 2010-11, emphasizing granting the appellant a reasonable opportunity to substantiate their claims.
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