2013 (5) TMI 743 - AT - Income Tax

Addition on account of notional rent - CIT(A) deleted the addition - Held that - CIT(A) has decided the issue in favour of assessee on the basis of light bill for the period from Aug.08 to Mar. 09 which showed zero reading & has also noted that this bill was produced before him during the course of appellate proceedings. Hence, this bill was never produced before AO & CIT(A) has decided this issue in favour of assessee on the basis of this bill without obtaining any remand report from the AO. This issue is restored back to the file of CIT(A) for a fresh decision. In favour of revenue by way or remand. Unexplained investment observing there was a difference in the purchase consideration and jantri rate of the shop purchased by the assessee - CIT(A) deleted the addition - Held that - The addition on the basis of jantry value can be made u/s 50C in the case of sale of property for the purpose of computing capital gain but there is no such production for making addition on the basis of excess jantry value in the hands of the purchaser. There is no other evidence brought on record by the AO showing that any extra price was paid by the assessee for purchase of this property and hence no reason to interfere in the order of CIT(A) - In favour of assessee. Unaccounted sundry creditors - CIT(A) deleted the addition - Held that - For examining the genuineness of transaction, it should be examined as to when the sale of property in question is actually declared by the assessee because even if sale deed was not executed in the present year or in the year of receipt of this amount also, then the sale has to be considered in the light of clause (v) or (vi) of sub-section 47 of Section 2 in the year when payment is received by the assessee and possession was handed over to the buyer. Since no light is thrown by the assessee or by any authorities below on this aspect set aside the order of CIT(A) on this issue also and restore the matter back to his file for fresh decision - In favour of revenue by way or remand.

Summary

Issues:
1. Deletion of addition of Rs.33,000 on account of notional rent.
2. Deletion of addition of Rs.3,06,700 on account of unexplained investment.
3. Deletion of addition of Rs.15,00,000 on account of sundry creditors.

Analysis:

1. Deletion of addition of Rs.33,000 on account of notional rent:
The Revenue's appeal challenged the deletion of the addition of Rs.33,000 by the Commissioner of Income-tax (Appeals) for the assessment year 2009-10. The Appellate Tribunal found that the Assessing Officer had estimated deemed rent without allowing the assessee to produce supporting documents. The Tribunal noted that the light bill produced during the appellate proceedings showed zero reading, which was not presented before the Assessing Officer. Consequently, the Tribunal ordered the matter to be sent back to the Commissioner for a fresh decision after obtaining a remand report from the Assessing Officer.

2. Deletion of addition of Rs.3,06,700 on account of unexplained investment:
Regarding the addition of Rs.3,06,700 made by the Assessing Officer for the difference between the purchase consideration and the jantri rate of a property purchased by the assessee, the Tribunal upheld the Commissioner's decision to delete the addition. The Tribunal noted that there was no evidence to support the claim that the assessee paid an extra amount for the property. As such, the Tribunal rejected the Revenue's appeal on this issue.

3. Deletion of addition of Rs.15,00,000 on account of sundry creditors:
The Tribunal addressed the addition of Rs.15,00,000 made by the Assessing Officer on account of sundry creditors. It was observed that the balance-sheet showed creditors of Rs.15 lakh, but it was unclear whether this amount was received in the relevant year. The Tribunal found deficiencies in both the Assessing Officer's and the Commissioner's findings. The Tribunal emphasized the need to establish whether the liability in the balance-sheet was from the present year or the preceding year. Consequently, the matter was remanded to the Commissioner for a fresh decision, with instructions to examine the issue thoroughly and provide a reasoned decision based on the facts presented.

In conclusion, the Appellate Tribunal partially allowed the Revenue's appeal for statistical purposes, remanding certain issues back to the Commissioner for a fresh decision based on the specific legal considerations outlined in the judgment.