Mohan Lal Jain, Ludhiana V. ACIT, Ludhiana

ITA 245/CHANDI/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9953 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 21-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTALDR
• Assessee Lawyers: S C JAIN
• Keywords: Opportunity of being heard
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 245/CHD/2016 ASSESSMENT YEAR : 2008-09 SHRI MOHAN LAL JAIN, VS THE ACIT, 327, BENJAMIN ROAD, CIRCLE II, LUDHIANA LUDHIANA. PAN: AEAPJ7080F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.C.JAIN RESPONDENT BY : SHRI S.K.MITTAL,DR DATE OF HEARING : 20.05.2016 DATE OF PRONOUNCEMENT : 01.06.2016 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-I, LUDHIANA DATED 22.01.2016 FOR ASSESSMENT YEAR 2008-09 CHALLENGING THE ADDITION OF RS. 2,40,000/-. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER NOTED THAT ASSESSEE CLAIMED EXPENSES ON ACCOUNT OF RENT PAID AMOUNTING TO RS. 2,40,000/-. THE ASSESSEE WAS ASKED TO PROVIDE THE PROOF. IN THIS REGARD, THE AS SESSEE COULD NOT PRODUCE ANY RENT DEED OR ANY PROOF OF TDS DEDUCTED TO SUBSTANTIATE HIS CLAIM OF DEDUCTION OF RS. 2,40,000/-. FURTHER, ON PERUSAL OF SAVING BANK ACC OUNT, 2 NOWHERE ANY AMOUNT WAS DEBITED WHICH WAS FOR THE RE NT PAID AS CLAIMED BY THE ASSESSEE. THE ASSESSING OFF ICER IN THE ABSENCE OF ANY MATERIAL ON RECORD, DISALLOWED RS. 2,40,000/- AS RENT CONSIDERING IT TO BE BOGUS. 3. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS) AND HIS WRITTEN SUBMISSION IS INCORPOR ATED IN THE IMPUGNED ORDER IN WHICH THE ASSESSEE BRIEFLY EXPLAINED THAT ASSESSEE HAS TAKEN PROPERTY ON RENT AT NALAGARH AND PAID RENT TO SHRI BHAG SINGH AND SHRI KULDIP SINGH OF NALAGARH OF RS. 1,20,000/- EACH. T HE SAID PROPERTY WAS SUB-LET BY THE ASSESSEE TO ANOTHE R PERSON FROM WHOM HE HAS RECEIVED RENT OF RS. 5,40,0 00/- FROM THE COMPANY M/S JCBL (INDIA) PVT. LTD. THE ASSESSEE IS NOT OWNER OF THE PROPERTY AND WAS PAYIN G RENT TO THE ABOVE PERSONS @ RS. 10,000/- PER MONTH AND S UB LET THE PROPERTY TO THE COMPANY. THE ASSESSEE FILE D COPIES OF THE RECEIPTS ISSUED BY BOTH THE PERSONS B EFORE ASSESSING OFFICER. NO TDS WAS REQUIRED TO BE DEDUC TED, ON PAYMENT OF RENT, THEREFORE, ADDITION IS LIABLE T O BE DELETED. 4. THE LD. CIT(APPEALS), HOWEVER, DID NOT ACCEPT CONTENTION OF THE ASSESSEE AND DISMISSED THE APPEAL OF THE ASSESSEE. THE LD. CIT(APPEALS) OBSERVED THAT A SSESSEE FAILED TO PRODUCE RENT DEED. PHOTO COPIES OF THE RE CEIPTS ARE FILED WHICH ARE ON PLAIN PAPERS. THE ASSESSEE DID NOT SUBSTANTIATE PAYMENT OF RENT. NO INCOME TAX DETAIL S OF THE PERSON TO WHOM RENT HAVE BEEN PAID, HAVE BEEN F ILED. 3 NO TDS WAS DEDUCTED, THEREFORE, IN THE ABSENCE OF A NY CORROBORATIVE EVIDENCE, APPEAL OF THE ASSESSEE WAS DISMISSED. 5. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE MATERIAL ON RECORD. IT IS ADMITTED FACT THAT NO RENT DEED WAS PRODUCED BEFORE THE AUTHORITI ES BELOW. THE AUTHORITIES BELOW ALSO NOTED THAT EVEN N O PROOF OF TDS DEDUCTED TO PROVE THE PAYMENT OF RENT HAS BEEN FILED. HOWEVER, IN THE CASE OF ASSESSEE, THE RENT PAID IS RS. 1,20,000/- PER ANNUM IN THE CASE OF TWO PERSONS. THE RENT IS STATED TO HAVE BEEN PAID BY INDIVIDUAL TO THE INDIVIDUALS. THEREFORE, PROVISION S OF SECTION 194I MAY NOT APPLY IN THE CASE OF INDIVIDUA L. FURTHER, ACCORDING TO PROVISO OF SECTION 194I, THIS PROVISION WILL NOT APPLY IN CASE THE RENT PAYMENT D OES NOT EXCEED ONE HUNDRED AND TWENTY THOUSAND RUPEES (RS.1,20,000/-). THEREFORE, THE OBJECTION OF THE AUTHORITIES BELOW THAT NO TDS WAS DEDUCTED MAY NOT BE TENABLE. HOWEVER, IT IS A FACT THAT NO RENT DEED W AS PRODUCED BY THE ASSESSEE. THE COPY OF THE BANK STATEMENT OF THE ASSESSEE IS FILED IN THE PAPER BOO K. THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT PAYME NTS HAVE BEEN MADE THROUGH TRANSFER TO SHRI KULDIP SING H AND SHRI BHAG SINGH IN A SUM OF RS. 6000/- EACH ON CERTAIN DATES, THEREFORE, IT WILL PROVE PAYMENT OF RENT TO THEM. HOWEVER, THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE DID NOT MATCH WITH THE SUBMISSIONS MADE BE FORE 4 LD. CIT(APPEALS). RS. 6000/- IS PAID EACH ON FIVE TIMES ONLY IN YEAR. 5(I) THE ASSESSEE IN THE WRITTEN SUBMISSION BEFORE LD. CIT(APPEALS) SUBMITTED THAT ASSESSEE WAS PAYING REN T TO THE ABOVE PERSONS @ RS. 10,000/- PER MONTH PER PERS ON. HOWEVER, THE AMOUNT PAID IN A SUM OF RS. 6000/- ONL Y ON CERTAIN DATES TO THESE PERSONS WOULD NOT MATCH WITH THE MONTHLY PAYMENT OF RENT OF RS. 10,000/- EACH. THER EFORE, CERTAIN AMOUNTS PAID TO THESE PERSONS AS PER BANK ACCOUNT WOULD NOT SUPPORT THE CONTENTION OF THE ASS ESSEE. HOWEVER, IT IS A FACT THAT ASSESSEE HAS RECEIVED TH E AMOUNT OF RS. 5,40,000/- FROM M/S JCBL (INDIA) PVT. LTD. AND SHOWN THE SAME IN THE COMPUTATION OF INCOME AS 'INCOME FROM OTHER SOURCES'. THE ASSESSEE CLAIMED THAT AFTER TAKING RENTED PROPERTY, THE SAME WAS GIVEN TO THIS COMPANY FROM WHOM ASSESSEE RECEIVED RENT. THEREFOR E, IT IS CLEAR THAT ASSESSEE RECEIVED INCOME OF RS. 5,40, 000/- FROM THIS COMPANY FOR USE AND OCCUPANCY OF SOME PROPERTY. HOWEVER, ASSESSEE FAILED TO PROVE WHETHE R THE SAME PROPERTY WHICH ASSESSEE HAS ALLEGEDLY BEEN TAK EN ON RENT FROM SHRI KULDIP SINGH AND SHRI BHAG SINGH WAS SUB-LETTED TO M/S JCBL (INDIA) PVT. LTD. THE LD. C OUNSEL FOR THE ASSESSEE ADMITTED THAT EVEN NO RECEIPTS HAV E BEEN ISSUED BY THEM AND ONLY YEARLY RECEIPT ON PLAIN PAP ER HAVE BEEN RECEIVED. THEREFORE, HE HAS SUBMITTED TH AT ASSESSEE IS WILLING TO PRODUCE BOTH THE ABOVE PERSO NS SHRI KULDIP SINGH AND SHRI BHAG SINGH BEFORE ASSESSING 5 OFFICER FOR EXAMINATION UNDER SECTION 131 OF THE IN COME TAX ACT. THE LD. COUNSEL FOR THE ASSESSEE, THEREFO RE, UNDERTOOK BEFORE ME THAT ASSESSEE WOULD PRODUCE THE SE PERSONS BEFORE ASSESSING OFFICER FOR EXAMINATION AN D UNDER SECTION 131 OF THE ACT FOR FINDING OUT THE TR UTH IN THE MATTER. 6. CONSIDERING ABOVE DISCUSSION AND UNDERTAKING GIV EN BY LD. COUNSEL FOR THE ASSESSEE ABOVE, IN THE LIGHT OF THE FACT THAT ASSESSEE RECEIVED RENT FROM M/S JCBL (IND IA) P.LTD., I AM OF THE VIEW ONE MORE CHANCE SHOULD BE GIVEN TO THE ASSESSEE TO PROVE HIS CASE BY PRODUCING SUFF ICIENT AND RELIABLE EVIDENCE BEFORE ASSESSING OFFICER INCL UDING THE PRODUCTION OF BOTH THE ABOVE PERSONS, SHRI KULD IP SINGH AND SHRI BHAG SINGH FOR EXAMINATION UNDER SEC TION 131 OF THE ACT. 7. IN THE INTEREST OF JUSTICE AND CONSIDERING FACTS AND FOR AFFORDING ONE MORE OPPORTUNITY TO THE ASSESSEE, I SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND RESTORE T HIS ISSUE TO THE FILE OF ASSESSING OFFICER WITH DIRECTI ON TO THE ASSESSEE TO PRODUCE SHRI KULDIP SINGH AND SHRI BHAG SINGH OF HIS OWN AT HIS OWN EXPENSES AND EFFORTS BE FORE ASSESSING OFFICER FOR EXAMINATION UNDER SECTION 131 OF THE ACT. THE ASSESSING OFFICER WHILE RECORDING THE STATEMENTS OF THESE PERSONS MAY ALSO DIRECT THESE P ERSONS AND THE ASSESSEE TO PRODUCE THE BANK ACCOUNTS OF TH ESE PERSONS ALONGWITH THEIR IT RETURNS IN ORDER TO VERI FY IF THEY HAVE ACTUALLY RECEIVED THE RENT IN QUESTION FR OM THE 6 ASSESSEE. THE ASSESSING OFFICER MAY ALSO VERIFY IF ANY PROPERTY ON RENT HAS BEEN TAKEN BY ASSESSEE FRO THO SE PERSONS AND WHETHER SAME PROPERTY SUBLETTED TO M/S JCBL INDIA (P) LTD. IN CASE ASSESSEE FAILS TO PRODU CE BOTH THE PERSONS BEFORE ASSESSING OFFICER ON THE APPOINT ED DATE, THE ASSESSING OFFICER MAY DRAW ADVERSE INFERE NCE AGAINST THE ASSESSEE AND SHALL PROCEED TO PASS THE ORDER IN ACCORDANCE WITH LAW. THE ASSESSING OFFICER SHAL L GIVE REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE PASSING THE ORDER AFRESH. 8. WITH THESE OBSERVATIONS AND DIRECTIONS, APPEAL O F THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 1 ST JUNE, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD