Harpreet Singh Kang, Chandigarh V. ITO, W-2(3), Chandigarh

ITA 1530/CHANDI/2019

AI Insights

The case involves Shri Harpreet Singh Kang appealing against the order of the Commissioner of Income Tax (Appeals)-1, Chandigarh, which confirmed the additions made by the Assessing Officer to his income for the assessment year 2011-12. The additions were based on rental incomes reported under his name in Form 26AS, which he contended were incorrectly attributed to him. The Tribunal found that the property from which the rent was received did not belong to Shri Kang but to his wife and HUF, and that the income had been wrongly reported under his PAN due to a clerical error by M/s Lease Plan India Pvt. Ltd. The Tribunal also addressed the issue of a claimed deduction under section 80C, which was initially disallowed due to the non-submission of proof during the assessment proceedings but was later submitted during the appellate proceedings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127487 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-08-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 01-12-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; TDS
• Section: 148; 80C

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘A’ CHANDIGARH BEFORE: SHRI A.D.JAIN, VICE PRESIDENT AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकर अपील सं/. ITA No. 1530/CHD/2019 नधा रण वष / Assessment Year : 2011-12 Shri Harpreet Singh Kang, # 125, Sector 18-A, Chandigarh. बनाम VS The ITO, Ward 2(3), Chandigarh. थायी लेखा सं./PAN /TAN No: AHTPK2485M अपीलाथ /Appellant यथ /Respondent नधा रती क ओर से/Assessee by : Shri Parikshit Aggarwal, C.A. राज व क ओर से/ Revenue by : Smt. Amanpreet Kaur, Sr.DR तार"ख/Date of Hearing : 09.08.2023 उदघोषणा क तार"ख/Date of Pronouncement : 18.09.2023 आदेश/ORDER PER A.D.JAIN, VICE PRESIDENT This is assessee's appeal for assessment year 2011-12 against the order dated 25.09.2019 passed by the ld. Commissioner of Income Tax(Appeals)-1, Chandigarh (in short ‘the CIT(A). 2. The assessee has raised the following grounds of appeal : 1. Income of Rs. 1,80,000/- was made as Rent Received from Lease Plan India Ltd. 301 CA Chambers , 218384/62 Naiwala, Gurudawara Road , Karol Bagh , New Delhi. ITA 1530/CHD/2019 A.Y.2011-12 2 The above property 2nd Floor , Unit No. 203C , Tower A ,Millennium Plaza ,Sector 27, Gurgaon-Haryana is in the name of Harneet kang W/o Shri Harpreet Singh Kang & Harpreet Kang & Sons (HUF). The Rent agreement is also executed between Lease Plan India Limited &Harneet Kang & Harpreet Kang & Sons HUF. Mrs. Harneet Kang ( PANAGFPK5756Q) & Harpreet Kang & Sons. AGFPK5756Q) & Harpreet Kang & Sons (AABHH3191Q)are independent Assessee and declaring Income in their Return. However as per 26 AS this amount has been wrongly shown in the 26AS of Mr. Harpreet Singh Kang. The above amount is also not received in the Bank account of the Assessee. During the Appeal a clarification in this regard was submitted to , CIT Appeals-1,Chandigarh, A copy of Conveyance deed & Lease deed was also produced in support of Clarification. However appeal was not allowed. 2. Income of Rs. 48239/- was added to Income of the Assessee on a/c of Rent received from 4th Floor of Tower D ,406 A . at Global Business Park , Mehrauli Gurgaon Road , Vill Sikanderpur Ghosi Gurgaon (Hya). The agreement of the above property was with Interglobe Aviation Ltd. Out of above Rs. 48,239/- assessee has declared Income of Rs. 39,940/- . Only Rs. 8299/-less 30% i.e. Rs. 5,809/-should be added to the Income of the Assessee. CIT Appeals has not even discussed the above addition in the order. 3. Rs. 1, 00 , 0 0 0 / - Rebate under chapter VI A was denied on a/c of non submission of proof. The proof were not available at the time of assessment proceedings. However these proofs were made available to CIT - Appeals Chandigarh at the time of hearing . Request to accept additional evidence was also made at the time of hearing . But the appeal was not allowed . 3. The assessee has raised the following additional grounds of appeal : 1. "That on facts, circumstances and legal position of the case, Worthy CIT(A) has erred in not even considering the ground raised by the appellant that the Ld. AO was not justified in making addition of Rs. 48,239/- on account of Rental Income from M/s Globe Aviation Limited" ITA 1530/CHD/2019 A.Y.2011-12 3 2. "That on facts, circumstances and legal position of the case, Worthy CIT(A) has erred in not allowing the benefit of deduction of Rs. 1,00,000/- u/s 80C even when all evidences were on his record." 4. It is seen that additional Ground No.1 is an extension of the original Ground No. 2 and the additional Ground No. 2 is an extension of the original Ground No.3. All the facts and material with regard to the two additional grounds taken by the assessee are on record and nothing fresh requires to be gone into. These issues are legal issues going to the root of the matter and, therefore, these additional grounds are admitted. 5. Apropos Ground No.1, the amount of Rs.1,80,000/- representing rent received from M/s Lease Plan India Ltd. was shown in the 26AS of the assessee, Shri Harpreet Singh Kang. The Assessing Officer ( in short ‘the AO’) observed that the assessee had failed to disclose this income in his return of income. Accordingly, the amount of Rs.1,80,000/- was added to the income of the assessee. 6. The ld. CIT(A) confirmed the addition, holding that the assessee had failed to establish that evidence that the property under rent did not belong to the assessee, or that it was the same property as that of M/s Millennium Plaza Ltd., that the documents submitted by the assessee did not support the claim of the assessee; that the amount of Rs.1,80,000/- had been found to have been credited to the assessee in Form ITA 1530/CHD/2019 A.Y.2011-12 4 26AS; and that hence, the AO had rightly assessed the amount in the hands of the assessee. 7. The ld. Counsel for the assessee has contended that the property in question, i.e., Second Floor, Unit No. 203C, Tower- A, Millennium Plaza, Sector 27, Gurgaon, Haryana was in the name of Smt. Harneet Kang, wife of the assessee Shri Harpreet Singh Kang, and the assessee's HUF, namely, Harpreet Kang & Sons (HUF); that Rent Agreement was also executed between Lease Plan (India) Ltd. and Harneet Kang & Harpreet Kang & Sons (HUF); that Smt. Harneet Kang (PAN AGFPK5756Q) and Harpreet Kang & Sons (PAN AGFPK5756Q) and Harpreet Kang & Sons (PAN AABHH3191Q) are independent assessees and are declaring income in their return; however, as per 26AS Form, this amount has been wrongly shown in the name of the assessee, Shri Harpreet Singh Kang, in his 26AS Form; that the amount of Rs.1,80,000/- has not been received in the bank account of the assessee; that during the appeal before the ld. CIT(A), a clarification in this regard was submitted to the ld. CIT(A) and a copy of the Conveyance Deed and Lease Deed was also produced; that however, the appeal was erroneously not allowed. Our attention has been drawn to APB-1, which is the first page of the Written Submissions (APB 1-3) filed by the assessee before the ld. CIT(A). Attention has also been drawn ITA 1530/CHD/2019 A.Y.2011-12 5 to Conveyance Deed (APB 6-15) dated 16.01.2008 and to Supplementary Agreement (APB 4-5) dated 29.05.2009. 8. The ld. DR, on the other hand, has placed strong reliance on the impugned order, contending that since the assessee was not able to prove before the ld. CIT(A), with documentary evidence, that the property in question did not belong to him, the ld. CIT(A) cannot said to have erred in upholding the addition of Rs.1,80,000/-. 9. On this issue, we find that as per the Conveyance Deed (supra), M/s Millennium Plaza Ltd. entered into a Lease Agreement with Smt. Harneet Kaur Kang, wife of the assessee and the HUF of the assessee, i.e., Harpreet Singh Kang and Sons (HUF). M/s Millennium Plaza Ltd. was the vendor of the property as per the Conveyance Deed, whereas Smt. Harneet Kang and Harpreet Singh & Sons (HUF) are the vendees. As per the Supplementary Agreement (supra), Smt. Harneet Kang and Harpreet Singh Kang & Sons (HUF) are the lessors and M/s Lease Plan India Pvt. Ltd. is the lessee of the building in question, for rent of Rs.80/- per sq.ft. M/s Millennium Plaza Ltd. entered into a Lease Agreement with M/s Lease Plan India Pvt. Ltd. for leasing the office space in the property in question, vide Agreement dated 01.11.2001. Subsequently, M/s Millennium Plaza Ltd. sold the property in question to ITA 1530/CHD/2019 A.Y.2011-12 6 Smt. Harneet Kang, the assessee's wife and Harpreet Kang & Sons (HUF). Thereafter, the assessee's wife, and his HUF became the owners of the premises. In Financial Year 2009-10, the assessee's wife and his HUF entered into the Supplementary Agreement with M/s Lease Plan India Pvt. Ltd. for extension of lease period. During the year under consideration, M/s Lease Plan India Pvt. Ltd. paid rent of Rs.1,80,000/- to the lessors, i.e., the assessee's wife and his HUF. The issue arose since M/s Lease Plan India Pvt. Ltd. mistakenly deducted TDS on this payment and mistakenly reported the same against the PAN of the assessee. 10. In the Statement of Facts before the ld. CIT(A), the assessee has clearly stated that : “The ld. Assessing Officer was not justified in addition of Rs.1,80,000/- as taxable income on account of rental income from M/s Lease Plan India Pvt. Ltd., Karol Bagh, New Delhi, as the same is wrongly reflected in 26AS of the assessee. The said property is in the name of Harneet Kang (wife of the assessee). During the course of assessment proceedings, the documents of the said property were produced before AO but she had not accepted the same”. 11. As per the order passed by the ld. CIT(A), during the appellate proceedings before him, the assessee submitted that ITA 1530/CHD/2019 A.Y.2011-12 7 the Rent Agreement was executed between M/s Lease Plan India Pvt. Ltd. and Smt. Harneet Kang, wife of the assessee, Harpreet Kang and Harpreet Kang & Sons (HUF) which is the same Agreement as that executed between M/s Millennium Plaza Ltd. and Smt. Harneet Kang, wife of Harpreet Kang and Harpreet Kang & Sons (HUF); that as per the 26AS, the amount of Rs.1,80,000/- had been wrongly shown in the 26AS of the assessee, on the basis of which the AO made the addition in the hands of the assessee; that he further submitted that the AO had made another addition of Rs.4,80,000/- by calculating the rent on the basis of Lease Deed between M/s Millennium Plaza Ltd. and Harneet Kang and Harpreet Kang & Sons (HUF), which was the same property on which the AO had made the addition of Rs.1,80,000/- on the basis of 26AS; that he had also submitted that the said property and the income of Rs.1,80,000/- earned from this property belonged to Harpreet Singh & Sons (HUF). It is further seen that receipt of rental income of Rs.4,80,000/-, from M/s Millennium Plaza Ltd. stands deleted by the ld. CIT(A). While doing so, the ld. CIT(A) observed that the Deed was between M/s Millennium Plaza Ltd. and Smt. Harneet Kang, wife of the assessee and Harpreet Kang & Sons (HUF), the HUF of the assessee, for property situated in Sector 27, Gurgaon. The ld. CIT(A) found that Supplementary Agreement dated 29.05.2009 was also between Smt. Harneet ITA 1530/CHD/2019 A.Y.2011-12 8 Kang and Harpreet Kang & Sons (HUF), as lessors and M/s Millennium Plaza Ltd., lessee, for the same property. The ld. CIT(A) found the property not to belong to the assessee. Therefore also, there was no reason for the ld. CIT(A) to sustain the addition of Rs.1,80,000/-. 12. The ld. CIT(A), however, has made the addition, which, in the facts discussed above, we do not find sustainable in law. It was solely on account of the aforesaid mistake committed by M/s Lease Plan India Pvt. Ltd., i.e., deducting of TDS and reporting it wrongly against the PAN of the assessee, that the anomaly came about, whereas, infact the property itself stands duly proved to be not in the name of the assessee, but in the name of his wife and his HUF. Accordingly, the addition of Rs.1,80,000/- is deleted. Additional Ground No.1 & original Ground No.2 13. The AO observed that the assessee was found to have received an amount of Rs.48,239/- on account of rent from M/s Globe Aviation Ltd. but he had failed to disclose this income in his return of income. The AO, accordingly, added the amount of Rs.48,239/- to the income of the assessee. The ld. CIT(A) has not adjudicated on this issue, as evident from the order under appeal. ITA 1530/CHD/2019 A.Y.2011-12 9 14. The ld. Counsel for the assessee has drawn our attention to the computation of total income (under Section 148 of the Income Tax Act), copy at APB 20. It has been contended that as submitted before the authorities below, instead of the amount of Rs.48,239/-, an amount of Rs.39,940/- was mistakenly shown and that so, it has been only the difference of Rs.8299/-, which could have been legally directed to be added. 15. The ld. DR has not been able to dispute the fact that the ld. CIT(A), in the impugned order, has not adjudicated this issue. 16. As per the AO, the amount of Rs.48,239/- had not been disclosed by the assessee in his return of income. In the Statement of Facts filed by the assessee before the ld. CIT(A), at para 5, the assessee had submitted before the ld. CIT(A) that; “The ld. AO was not justified in addition of Rs.48,239/- as taxable income on account of rental income from M/s Globe Aviation Ltd. as we have shown Rs.39,940/- as income in return instead of Rs.48,239/- but the AO instead of adding the difference of Rs.8299/- has disallowed the whole amount”. 17. As per the “Relief Claimed”, as stated below the Statement of Facts filed before the ld. CIT(A), in para 1 thereof, the assessee has contended: “That the order dated 15.12.2018 be ITA 1530/CHD/2019 A.Y.2011-12 10 quashed and the addition of Rs.7,08,239/- be removed”. In para 2 of the Statement of Facts, it has been stated that the AO made total addition of Rs.7,08,239/-, it is seen, comprised of the three additions made by the AO, i.e. the addition of Rs.1,80,000/- (Ground No.1) ; the addition of Rs.4,80,000/-, deleted by the ld. CIT(A) himself and an addition of Rs.48,239/- (Ground No.2). The ld. CIT(A) has not decided this issue. In the written statement filed by the assessee before the ld. CIT(A) (APB 2, para 3), it has been stated that the Agreement of the property was with M/s Globe Aviation Ltd.; that out of the amount of Rs.48,239/-, the assessee declared income of Rs.39,940/-; and that therefore, only Rs.8299/- less 30%, i.e., Rs.5809/- should be added to the income of the assessee. 18. The ld. Counsel for the assessee has placed before us, a copy of Lease Deed dated 10.01.2011, which Lease Deed is stated to have been placed before the authorities below also, to buttress the argument in this regard, as submitted before the Taxing Authorities also. 19. From the above, we find the contention on behalf of the assessee to be correct. It is that instead of the amount of Rs.48,239/-, the assessee showed an amount of Rs.39,940/- in ITA 1530/CHD/2019 A.Y.2011-12 11 the return of income. Accordingly, the AO is directed to add the amount of Rs.5809/- only. Additional Ground No.2 and Original Ground No. 3 20. So far as regards additional Ground No. 2 and original Ground No.3, the AO observed that the assessee had claimed deduction of Rs.1 lac under Chapter VI of the Income Tax Act but no proof had been provided by the assessee; that therefore, deduction under Chapter IV was not being allowed to the assessee; and that the assessee had failed to provide Form No.16 and 80C proof during the assessment proceedings. The ld. CIT(A) has observed that, “Since the assessee had not raised any ground regarding claim u/s 80C of the Act in Form No.35, nor had he raised any additional ground of appeal during the assessment proceedings, the claim of rebate was not being adjudicated”. 21. The ld. CIT(A) has contended that before the AO, the proof regarding the claim could not be submitted because the same was not available at that time; that however, these proofs were made available to the ld. CIT(A) during the First Appellate Proceedings and a request to accept additional evidence had also been made; that however, the ld. CIT(A) did not allow the appeal on this issue. ITA 1530/CHD/2019 A.Y.2011-12 12 Before us, the assessee has again made a request for admission of additional evidence. In the application filed in this regard, it has been submitted that the additional evidence sought to be filed is in the shape of copies of Insurance Premium Statements of the assessee and his daughter; that during the year under consideration, the assessee had claimed deduction u/s 80C of the Income Tax Act, amounting to Rs.1 lac ( Rs.50,000/- each) on account of Insurance Premium paid by the assessee for himself and his daughter; that during the assessment proceedings, the AO had asked for the documents to prove such deduction claimed, but despite a number of efforts made by the assessee, he was not able to compile such documents within the due time, which resulted in disallowance of the deduction claimed; that in the course of appeal before the CIT(A), these documents were made available before the ld. CIT(A); that further, the ld. CIT(A) did not consider the same, despite the request on behalf of the assessee to accept such additional evidence; that therefore, the significance of these documents was illegally overlooked by the ld. CIT(A), resulting in unjust denial of the assessee's legitimate deduction of Rs.1 lac u/s 80C of the Act, even though the same had been duly claimed in the Income Tax Return and payment had been made through banking channel. ITA 1530/CHD/2019 A.Y.2011-12 13 22. In the written submissions filed before the ld. CIT(A), the assessee has contended (APB-3) as follows : “(4) Rs. 1,00,000/- Rebate under chapter VI A was denied on a/c of non submission of proof. The proof were not available at the time of assessment proceedings. However now these proofs are available. Rs. 50,000/- was paid on a/c of Insurance Premium of the Assessee himself & Rs. 50,000/- was paid on the Insurance Premium of his daughter Sukhmani Kang. You are requested to consider the enclosed Insurance Premium receipts of Rs. 1,00,000/- as Rebate under Chapter VI A . (Copies enclosed vide Page No. 24-25”. 23. It is seen that thus, the ld. Counsel for the assessee is correct in contending that request has been made before the ld. CIT(A) to consider the Insurance Premium receipts of Rs.1 lac as rebate under Chapter VI-A of the Income Tax Act. 24. The additional evidence filed before us, therefore, is not additional evidence as such, the same having been filed before the ld. CIT(A) also. The order of the ld. CIT(A) on this issue was passed in oblivion of the aforementioned submissions made by the assessee on this issue. The ld. CIT(A), hence, erred in observing that no ground or additional ground regarding the claim u/s 80C of the Act was raised before him. 25. In view of the above, the AO is directed to verify the claim of the assessee u/s 80C of the Income Tax Act, in the light of ITA 1530/CHD/2019 A.Y.2011-12 14 the Insurance Receipts of Rs.1 lac qua the assessee and his daughter and to grant relief accordingly. 26. In the result, the appeal is allowed. Order pronounced in the Open Court on 18 th September,2023. Sd/- sd/- व म !संह यादव आकाश द प जैन ( VIKRAM SINGH YADAV) (AAKASH DEEP JAIN) लेखा सद'य/ ACCOUNTANT MEMBER उपा)य* / VICE PRESIDENT “Poonam” आदेश क琉 灹ितिलिप अ灡ेिषत/ Copy of the order forwarded to : 1. अपीलाथ牸/ The Appellant 2. 灹瀄यथ牸/ The Respondent 3. आयकर आयु猴/ CIT 4. िवभागीय 灹ितिनिध, आयकर अपीलीय आिधकरण, च瀃डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड榁 फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar