2024 (12) TMI 116 - AT - Income Tax

Quantum Addition and Penalty u/s 270A - difference between the actual rent received and agreed rent as per agreement - HELD THAT - Assessee received rent from M/s. Mobivil Technologies India Pvt. Ltd. only to the extent of ₹. 3,74,879/- and also TDS deducted thereon of ₹. 37,492/-, which is not disputed by both the parties. But, we find that the AO fell in error in taking into consideration the agreed rent as per the agreement resulting the impugned addition. Rent bill issued by the assessee in favour of M/s. Mobivil Technologies India Pvt. Ltd. for the period from 01.04.2017 to 31.03.2018. In all the months, it is noted that the assessee raised bill under the head office rent and also raised tax invoice for the period from July, 2017 to March, 2018, clearly shows CGST SGST at 9% each was calculated and paid for the monthly rent received by the assessee. Therefore, we find force in the argument of the AR that the AO fell in error in ignoring the receipt of rent as reflected in Form 26AS and TDS deducted thereon. Therefore, in our opinion, the addition made by the AO and confirmed by the ld. CIT(A) is not justified. Thus, the addition made on the amount of difference between the actual rent received and agreed rent as per agreement in the case of M/s. Mobivil Technologies India Pvt. Ltd. is deleted. Appeals filed by the assessee are allowed.

Summary

Issues:
Delay in filing appeals, Addition of rental receipts, Penalty under section 270A of the Income Tax Act, 1961.

Delay in Filing Appeals:
The appellant filed appeals with a delay of 3 days, seeking condonation of the delay. The tribunal, after considering the reasons provided by the appellant and finding them to be genuine, condoned the delay. Both parties consented to hear and decide the appeals together due to similar issues raised.

Addition of Rental Receipts:
The appellant, an HUF deriving income from house property, challenged the addition made by the Assessing Officer on rental receipts. The tribunal noted discrepancies in the rental income details provided by the appellant and the actual amounts received. The tribunal found that the rental income difference was paid in subsequent assessment years and offered for taxation. The tribunal, after examining evidence and submissions, concluded that the additions made by the Assessing Officer were not justified. Therefore, the additions were deleted.

Penalty under Section 270A:
The Assessing Officer initiated penalty proceedings under section 270A for misreporting of income. However, since the tribunal had deleted the quantum additions made by the Assessing Officer, it was observed that the appellant had correctly reported its income for taxation. Consequently, the penalty levied under section 270A was deemed infructuous and dismissed.

In conclusion, both appeals filed by the appellant were allowed by the tribunal, with the order pronounced on 29th November 2024 at Chennai.