9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (5) TMI 85 - AT - Income TaxRental income earned on immovable properties owned by his family members - Benami Owner - properties owned by relatives of the assessee - basis for treating the same as benami property of the assessee is the CBI search conducted on the assessee making out a case of assets owned by the assessee disproportionate to his source of income - assessee contended before us that this rental income had been disclosed by the owners of the property in their returns, and the same had not been disturbed or disputed till the date - HELD THAT - As it is evident that the case of the Revenue of the impugned properties being benami of the assessee rests merely on the preliminary report of the CBI which did not see the light of day by framing concrete charges against the assessee. We have perused the statement recorded by CBI and as rightly pointed out by the Ld.Counsel the assessee denied having anything to do with the said properties, he stated the names of the owners of the properties and also revealed sources from where investment was made by them. The entire case of the Revenue rests on the CBI Charge sheet framed by the CBI which was subsequently dropped. Revenue has failed miserably to prove that the assessee was a benami owner of the impugned properties. The assessee therefore cannot be treated as owner of the properties. The decision referred of the Hon ble Kerala High Court in K. Mahim Udma 1999 (10) TMI 45 - KERALA HIGH COURT casting an onerous burden on the party alleging benami transaction aptly covers the issue in hand, in favour of the assessee. Therefore there is no occasion to tax rental income earned therefrom in the hands of the assessee.Further the fact that rental income from these properties was returned in the hands of respective owners has been accepted by the Revenue all along, also strengthens the case of the assessee. In view of the above we hold that the rental income cannot be treated to be that belonging to the assessee. Addition made of the same is directed to be deleted. B adla income earned by the assessee - HELD THAT - As entire case of the Revenue rests on the CBI charge sheet which ultimately did not culminate in any charges being framed on the assessee. Therefore, not much credence can be given to allegations levelled on the assessee in the charge sheet. Besides we have noted that Sh. Pawar filed an affidavit stating on oath that all income from badla activities carried out in D.D Enterprises related to him and had nothing to do with the assessee. The Revenue has been unable to point any infirmity in the affidavit of Shri Pawar. Even income from the badla business carried out in D D Enterprises was shown to be duly returned to tax by the said entity,being proprietorship of Sh.Pawar. Thus no substance in the addition made by the Revenue of income badla. Income earned from investments held to be benami of the assessee - interest earned on Post-Office MIS - investment being in the name of father of the assessee treated to be benami of the assessee - HELD THAT - As there is no case for treating the impugned income as that related to the assessee, since Revenue has been unable to discharge its onus of proving that these investments were benami of the assessee.In view of the same, the addition made of interest income earned from FDR and interest earned on Post Office MIS are directed to be deleted. Appeal of the assessee is allowed.
Issues Involved:
1. Validity of the assessment framed u/s 147 of the Income Tax Act. 2. Addition of Rs. 3,05,000/- on account of rental income. 3. Addition of Rs. 11,471/- being income from investment with D.D. Enterprise. 4. Addition of Rs. 84,445/- being interest earned on FDRs. 5. Addition of Rs. 26,520/- being interest earned on Post-Office MIS. Summary of Judgment: 1. Validity of the assessment framed u/s 147 of the Income Tax Act: - The assessee raised additional grounds challenging the validity of the assessment framed u/s 147 of the Act. However, the assessee's counsel did not press this ground, and it was not admitted for adjudication. 2. Addition of Rs. 3,05,000/- on account of rental income: - The assessee challenged the addition of Rs. 3,05,000/- made on account of rental income from properties owned by his family members, which were treated as benami properties of the assessee. - The properties in question were Ratna Jyoti Complex and Riddhi Siddhi Cellar, registered in the names of the assessee's father, mother, and sister. - The assessee contended that the rental income had been disclosed by the actual owners in their IT returns, and this was supported by evidence, including Income Tax Returns and municipal tax bills. - The Tribunal noted that the burden of proving a benami transaction lies on the person asserting it, as held by the Hon'ble Kerala High Court in CIT Vs. K.Mahim Udma. - Since the CBI's preliminary report did not result in concrete charges, and the Revenue failed to prove the benami nature of the properties, the addition was deleted. 3. Addition of Rs. 11,471/- being income from investment with D.D. Enterprise: - The issue related to alleged badla income earned by the assessee from DD Enterprises. - The assessee provided evidence that the income was returned to tax by Shri J.R. Pawar, who was involved in the badla business. - An affidavit from Shri J.R. Pawar stated that the assessee was not involved in the badla business. - The Tribunal found no substance in the addition made by the Revenue, as the CBI charge sheet did not culminate in any charges, and the affidavit was not contradicted by the Revenue. - The addition was deleted. 4. Addition of Rs. 84,445/- being interest earned on FDRs: - The issue related to interest income earned on FDRs in the names of the assessee's family members, treated as benami income of the assessee. - The assessee argued that the onus of proving the benami nature of the investments lay on the Department, which was not discharged. - The Tribunal applied the same reasoning as in the rental income issue and found no case for treating the interest income as related to the assessee. - The addition was deleted. 5. Addition of Rs. 26,520/- being interest earned on Post-Office MIS: - The issue related to interest earned on Post-Office MIS in the name of the assessee's father, treated as benami income of the assessee. - The assessee's arguments were identical to those in the previous issues, and the Tribunal applied the same reasoning. - The addition was deleted. Conclusion: - The appeal of the assessee was allowed, and all the additions made by the Revenue were directed to be deleted.
|
