ACIT, New Delhi V. Sh. Amit Gupta, Faridabad

ITA 3292/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97187 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-08-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 23-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Reassessment proceedings
• Section: 54B; 54F; 54; 11; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `A NEW DELHI SHRI CHANDRAMOHAN GARG, JUDICIAL MEMBER AND BEFORE SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A.NO.3474/DEL/2013 ASSESSMENT YEAR : 2006-07 SHRI AMIT GUPTA, VS ACIT, C/O HEENA INDUSTRIES PVT. LTD., CIRCLE-I, PLOT NO. 45, SECTOR-27A, FARIDABAD. FARIDABAD. (PAN: AADPG9388E) I.T.A.NO.3292/DEL/2013 ASSESSMENT YEAR : 2006-07 ACIT, VS SMT. AMIT GUPTA, FARIDABAD. FARIDABAD. (APPELLANT) (RESPONDENT) APPELLANT B Y: SHRI RAKESH JAIN, ADVOCATE RESPONDENT BY : SHRI CHAN DRAKAR, SR. DR DATE OF HEARING: 27.08.2015 DATE OF PRONOUNCEMENT: 9.9.2015 O R D E R PER CHANDRAMOHAN GARG, J.M. THESE CROSS APPEALS BY THE REVENUE AS WELL AS BY TH E ASSESSEE HAVE BEEN PREFERRED AGAINST THE ORDER OF CIT(A), FARIDABAD DA TED 26.3.13 IN APPEAL NO. 258/11-12 FOR AY 2006-07. REVENUES APPEAL - ITA NO. 3292/D/13 FOR AY 2006-07 2. THE REVENUE HAS RAISED SOLE GROUND IN THIS APPEAL W HICH READS AS UNDER:- ITA NO. 3474/D/2013 & ITA 3292/D/2013 AY 2006-07 2 1. A) BECAUSE THE ACTION FOR THE ASSUMPTION AND A PPLICATION OF JURISDICTION, FOR REASSESSMENT PROCEEDINGS (U/S 147) IS BEING CHALLENGED ON FACTS AND LAW. B) BECAUSE THE ACTION IS BEING CHALLENGED ON FACTS AND LAW, PARTICULARLY WHILE ON THE MERITS THE REASONS TO BE LIEVE DO NOT SURVIVE QUA THE ADDITION OF RS.32,00,000/- WHICH F ORMS THE BASIS FOR THE INITIATION OF THE PROCEEDINGS. 3. BRIEF FACTS GIVING RISE TO THIS APPEAL ARE THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE CLAIMED DEDUCTION U/S 54B OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) WHICH WAS DEPOSITED IN CAP ITAL GAINS ACCOUNT WITH PUNJAB NATIONAL BANK ON 28.10.06. TO SUPPORT THIS CLAIM, THE ASSESSEE POINTED OUT BEFORE THE AO THAT AS PER ORDER DATED 24.7.2006 OF GOVT. OF INDIA, MINISTRY OF FINANCE, DEPT. OF REVENUE (CBDT) ISSUED U/S 119( 2) (B) OF THE ACT, THE DATE OF FILING OF RETURN WAS EXTENDED TO 31.10.06, THERE FORE, THE CLAIM OF THE ASSESSEE IS ESTABLISHED AND ALLOWABLE. THE AO DISMISSED THE CLAIM OF THE ASSESSEE U/S 54B OF THE ACT BY HOLDING THAT IT IS MANDATORY THAT THE AMOUNT OF CAPITAL GAIN WHICH WAS NOT UTILIZED BY THE ASSESSEE FOR THE PUR CHASE OF NEW ASSET BEFORE THE DATE OF FURNISHING A RETURN OF INCOME U/S 139 OF TH E ACT SHALL BE DEPOSITED BY HIM BEFORE THE FURNISHING OF SUCH RETURN AND THE AS SESSEE HAS NOT COMPLIED WITH THE PROVISIONS OF SECTION 54B OF THE ACT FOR CLAIMI NG DEDUCTION THEREUNDER AS IN HIS CASE, THE DUE DATE FOR FILING RETURN WAS 31.7.2 006 AND NOT 31.10.06 AS CLAIMED BY THE ASSESSEE. THE AO DISALLOWED THE CLA IM OF THE ASSESSEE AND ADDED THE AMOUNT OF RS.32 LAKH TO THE TAXABLE INCOM E OF THE ASSESSEE. ITA NO. 3474/D/2013 & ITA 3292/D/2013 AY 2006-07 3 4. THE AGGRIEVED ASSESSEE FILED AN APPEAL BEFORE TH E CIT(A) WHICH WAS ALLOWED BY HOLDING THAT IN VIEW OF THE ORDER U/S 11 9(2)(B) OF THE ACT DATED 24.7.06 ISSUED BY THE CBDT AND THE RELEVANT EVIDENC E FILED BY THE ASSESSE IN SUPPORT OF DEPOSITING OF IMPUGNED AMOUNT IN HIS BAN K ACCOUNT OF 28.10.06, THE ASSESSEE RIGHTLY CLAIMED DEDUCTION U/S 54B OF THE A CT AND RELIEF WAS GRANTED TO THE ASSESSEE. THE CIT(A) EXPLICITLY HELD THAT AS P ER ORDER OF THE CBDT DATED 24.7.06 (SUPRA), THE DUE DATE FOR FURNISHING OF RET URN OF INCOME FOR AY 2006-07 WAS EXTENDED TO 31.10.06 IN ALL THE CASES OF NON-CO RPORATE TAX PAYERS INCLUDING PARTNERS OF FIRMS AND CHARITABLE TRUSTS AND INSTITU TIONS. HENCE, LAST DATE FOR FILING OF RETURN APPLICABLE TO THE ASSESSEE WAS 31. 10.06. NOW, THE AGGRIEVED REVENUE IS BEFORE THIS TRIBUNAL WITH THE SOLE GROUN D AS REPRODUCED HEREINABOVE. 5. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD INTER ALIA ASSES SMENT ORDER, IMPUGNED ORDER OF THE FIRST APPELLATE AUTHORITY AND ORDER OF CBDT U/S 119(2)(B) DATED 24.07.2006 (SUPRA). WE HAVE ALSO PERUSED THE REVIS ED COMPUTATION OF TOTAL INCOME AVAILABLE AT PAGES 60 & 63 OF THE ASSESSEES PAPER BOOK. FIRSTLY, WE FIND IT APPROPRIATE TO NOTE THAT ADMITTEDLY AND UND ISPUTEDLY, THE FACT EMERGES FROM THE RECORDS THAT THE ASSESSEE DEPOSITED RS.32 LAKH IN CAPITAL GAINS ACCOUNTS SCHEME WITH PNB ON 28.10.06. AS PER REVIS ED COMPUTATION OF INCOME SUBMITTED BEFORE THE AO, THE ASSESSEE WAS AL SO A PARTNER IN VIDHYA WAREHOUSE INC. HAVING 20% OF SHARE WHICH BROUGHT IN COME FROM BUSINESS AND ITA NO. 3474/D/2013 & ITA 3292/D/2013 AY 2006-07 4 PROFESSION TO THE ASSESSEE AS PER CHAPTER IV D OF T HE ACT. WHEN WE ANALYSE THE ORDER ISSUED BY MINISTRY OF FINANCE, DEPARTMENT OF REVENUE (CBDT) DATED 24.7.2006, PARA 3, THEN IT IS AMPLY CLEAR THAT THE DUE DATE FOR FURNISHING RETURN OF INCOME AND/OR RETURN OF FRINGE BENEFITS FOR AY 2006 -07 WAS EXTENDED FROM 31 ST JULY, 2006 TO 31 ST OCTOBER, 2006 IN ALL CASES OF NON-CORPORATE TAXPAY ERS INCLUDING PARTNERS OF THE FIRMS AND CHARITABLE TRUS TS AND INSTITUTIONS. 6. ON BARE READING OF THE IMPUGNED ORDER OF THE CIT (A), WE NOTE THAT THE CIT(A) GRANTED RELIEF TO THE ASSESSEE WITH FOLLOWIN G OBSERVATIONS AND CONCLUSION:- ALONG WITH WRITTEN SUBMISSIONS, THE APPELLANT GAV E A COPY OF ORDER NO. 142/41/200S-TPL(PT) U/S. 119(2)(B) OF THE INCOME TAX ACT DATED 24.07.2006 OF THE CBDT, AS PER WHICH THE DUE DATE FOR FURNISHING THE RETURN OF INCOME FOR ASSESSMENT YEAR 2006-07 WAS EXTENDED BY THE CBDT TO 31.10.2006 IN ALL CASES OF NON- CORPORATE TAX PAYERS INCLUDING PARTNERS OF FIRMS AN D CHARITABLE TRUSTS AND INSTITUTIONS. ALONG WITH THE ORDER U/S 1 19(2)(B), THE APPELLANT ALSO SUBMITTED A COPY OF ITS ACCOUNT UNDE R THE CAPITAL GAINS ACCOUNTS SCHEME, AS PER WHICH AN AMOUNT OF RS.32,00,000/- WAS DEPOSITED IN THE ACCOUNT ON 28.1 0.2006. IN VIEW OF THE ORDER U/S 119(2)(B) OF THE INCOME TAX A CT DATED 24.07.2006 ISSUED BY THE CBDT AND THE REQUISITE EVI DENCE FILED BY THE APPELLANT IN SUPPORT OF DEPOSITING OF RS.32 ,00,000 IN HIS BANK ACCOUNT ON 28.10.2006, I HOLD THAT THE APPELLA NT RIGHTLY CLAIMED THE EXEMPTION U/S 54B OF THE INCOME TAX ACT AMOUNTING TO RS.32,00,000/-. THIS GROUND OF APPEAL IS THUS A LLOWED. 7. IN VIEW OF ABOVE, WHEN THE ASSESSEE IS SHOWING I NCOME FROM BUSINESS AND PROFESSION IN THE RETURN OF INCOME EITHER NEGAT IVE OR POSITIVE, THEN OBVIOUSLY, THE ASSESSEE FALLS WITHIN THE AMBIT OF N ON-CORPORATE TAX PAYERS WHICH ITA NO. 3474/D/2013 & ITA 3292/D/2013 AY 2006-07 5 INCLUDES PARTNERS OF THE FIRM AND HENCE, DATE OF FI LING OF RETURN APPLICABLE FOR THE ASSESSEE WOULD BE 31.10.06. WE MAY FURTHER POI NT OUT THAT WHEN ADMITTEDLY AND UNDISPUTEDLY, THE ASSESSEE DEPOSITED IMPUGNED A MOUNT OF RS. 32 LAKH IN THE CAPITAL GAINS ACCOUNT SCHEME ON 28.10.06 BEFORE TH E DUE DATE OF FILING OF RETURN I.E. 31.10.06, THEN ASSESSEE IS ELIGIBLE FOR DEDUCT ION U/S 54B OF THE ACT IN THIS REGARD. WE, THEREFORE, ARE OF THE OPINION THAT THE VIEW TAKEN BY THE CIT(A) IS SUSTAINABLE AND AS PER PROVISIONS OF THE ACT AND WE ARE UNABLE TO SEE ANY INFIRMITY, PERVERSITY OR ANY OTHER VALID REASON TO INTERFERE WITH THE SAME. ACCORDINGLY, SOLE GROUND OF THE REVENUE BEING DEVOI D OF MERITS IS DISMISSED. ASSESSEES APPEAL IN ITA NO.3474/D/13 FOR AY 2006-0 7 8. FIRST OF ALL, LD. COUNSEL OF THE ASSESSEE SUBMIT TED THAT THE ASSESSEE DOES NOT WANT TO PRESS GROUND NO. 1 AND HENCE, THE SAME IS DISMISSED AS NOT PRESSED. THE REMAINING GROUNDS OF THE ASSESSEE FOR ADJUDICAT ION READ AS UNDER:- 2. BECAUSE THE ACTION FOR DECLINING THE CLAIM (U/ S 54F ) OF DEDUCTION FOR RS.23,80,000 IS BEING CHALLENGED ON FACTS AND LAW ON THE TRUE & CORRECT INTERPRETATION TO THE PRO VISIONS OF THE TRANSFER OF PROPERTY ACT, 1882 R/W THE REGISTRATION ACT, 1908 QUA THE OWNERSHIP, CONTROL AND POSSESSION OF THE PR OPERTY THROUGH A 'GENERAL POWER OF ATTORNEY' (GPA). 3. BECAUSE THE ACTION FOR MAKING THE ADDITION OF RS .25,200 FOR 'INCOME FROM HOUSE PROPERTY' IS BEING CHALLENGE D ON FACTS AND LAW. ITA NO. 3474/D/2013 & ITA 3292/D/2013 AY 2006-07 6 GROUND NO.2 9. APROPOS GROUND NO.2, LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE AO AND THE CIT(A) WERE NOT JUSTIFIED IN DISMISSING THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 54F OF THE ACT. LD. COUNSEL FURTHER CONTENDED THAT CONCLUSION OF THE AUTHORITIES BELOW IS NOT SUSTAINABLE ON THE FAC T AND IN LAW AND ON THE TRUE AND CORRECT PROVISIONS OF TRANSFER OF PROPERTY ACT 1882 R/W PROVISIONS OF THE REGISTRATION ACT 1908 QUA THE OWNERSHIP, CONTROL AN D POSSESSION OF THE PROPERTY THROUGH A GENERAL POWER OF ATTORNEY (GPA). LD. C OUNSEL FURTHER SUBMITTED THAT AS PER JUDGMENT OF HONBLE HIGH COURT OF MADRAS IN THE CASE OF DR. P.K. VASANTHI RANGARAJAN VS CIT (2012) 209 TAXMAN 6 28 (MADRAS) UNLESS AND UNTIL THERE ARE MATERIALS TO SHOW THAT THE ASSE SSEE IS THE EXCLUSIVE OWNER OF THE RESIDENTIAL PROPERTY, THE HARSHNESS OF THE PROV ISO CANNOT BE APPLIED FOR DENYING THE EXEMPTION. LD. COUNSEL VEHEMENTLY CONT ENDED THAT THE HONBLE MADRAS HIGH COURT ALSO HELD THAT WHEN IT WAS CLEAR THAT AS ON THE DATE OF TRANSFER, THE ASSESSEE DID NOT OWN RESIDENTIAL HOUS E IN HER/HIS NAME ONLY AND WAS THE HOLDER OF ONLY 50% OF SHARE, THEN THE PROVI SIONS OF SECTION 54F OF THE ACT DO NOT CREATE A RIDER AND THE ASSESSEE SHOULD B E HELD ENTITLED TO EXEMPTION U/S 54F OF THE ACT. 10. REPLYING TO THE ABOVE, LD. DR SUPPORTED THE ACT ION OF THE AUTHORITIES BELOW AND SUBMITTED THAT ON COMBINED READING OF THE FACTS OF THE CASE, TOGETHER WITH THE PROVISIONS OF SECTION 54 OF THE ACT SHOWS THAT THE APPELLANT ASSESSEE ITA NO. 3474/D/2013 & ITA 3292/D/2013 AY 2006-07 7 SHOULD NOT OWN MORE THAN ONE RESIDENTIAL HOUSE ON T HE DATE OF TRANSFER OF THE ORIGINAL ASSET. LD. DR STRONGLY SUPPORTING THE ASS ESSMENT ORDER AND THE IMPUGNED ORDER OF THE CIT(A) FURTHER SUBMITTED THAT THE ASSESSEE APPELLANT OWNED TWO RESIDENTIAL PROPERTIES ON THE DATE OF TRA NSFER OF ORIGINAL ASSET VIZ. PROPERTY NO. 2109, SECTOR 28, FARIDABAD AND SFS FLA T NO. 36B, FIRST FLOOR, POCKET C, SIDDARTH EXTENSION RESIDENTIAL SCHEME, NE W DELHI AND THE ASSESSEE WAS ALSO SEEKING CLAIM OF EXEMPTION U/S 54F OF THE ACT BY PURCHASING A THIRD PROPERTY NO. 614, SECTOR 21-C, FARIDABAD WHICH IS C LEARLY HIT BY THE PROVISO (A) (I) TO SECTION 54F(1) OF THE ACT. LD. DR SUBMITTED THAT THE AO RIGHTLY DENIED EXEMPTION U/S 54 OF THE ACT TO THE ASSESSEE WHICH W AS RIGHTLY UPHELD AND CONFIRMED BY THE CIT(A), FARIDABAD. THUS, THESE GR OUNDS OF THE ASSESSEE BEING DEVOID OF MERITS MAY KINDLY BE DISMISSED. LD. DR S UBMITTED THAT THE BENEFIT OF THE RATIO OF DECISION OF HONBLE MADRAS HIGH COURT IS NOT AVAILABLE FOR THE ASSESSEE IN THE PRESENT CASE. 11. REPLYING TO THE ABOVE, LD. COUNSEL OF THE ASSES SEE ALSO PLACED A REJOINDER AND SUBMITTED THAT THE IMPUGNED ALLEGED SECOND PROP ERTY SFS FLAT NO. 36F, SITUATED AT SIDDARTH EXTENSION RESIDENTIAL SCHEME, NEW DELHI WAS NOT EXCLUSIVELY OWNED BY THE ASSESSEE AND THE ASSESSEE WAS OWNING ONLY 50% OF SHARE IN THAT PROPERTY, THEREFORE, IN VIEW OF JUDGM ENT OF HONBLE HIGH COURT OF MADRAS IN THE CASE OF DR. P.K. VASNATHI RANGARAJAN VS CIT (SUPRA) IS APPLICABLE TO THE CASE OF THE ASSESSEE. LD. COUNSEL OF THE AS SESSEE ALSO TOOK US THROUGH THE ITA NO. 3474/D/2013 & ITA 3292/D/2013 AY 2006-07 8 WILL OF SHRI HARISH CHANDER BATRA DATED 7.5.1993 AN D SUBMITTED THAT THE TESTATOR BY WAY OF WILL PARTED WITH HIS LEASEHOLD R IGHTS IN THE SAID PROPERTY IN FAVOUR OF THE ASSESSEE AND SMT. SAROJ RANI AGGARWAL EXCLUDING THE RIGHTS OF HIS OTHER LEGAL HEIRS AND SUCCESSORS AND SHARE OF THE A SSESSEE WAS ONLY 50% , THEREFORE, IN VIEW OF DECISION OF HONBLE MADRAS HI GH COURT, JOINT OWNERSHIP OF THE SAID PROPERTY WITH SMT. SAROJ RANI AGGARWAL WOU LD NOT STAND IN THE WAY OF THE ASSESSEE FOR CLAIMING EXEMPTION U/S 54 OF THE A CT. 12. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSION OF BOTH THE PARTIES, AT THE VERY OUTSET, WE FIND IT APPROPRIATE TO CONSIDER THE PROVISO (A)(I) TO SECTION 54F(1) OF THE ACT WHEREIN THE STATUTE MANDATES THAT WHERE THE ASSESSEE OWNS MORE THAN ONE RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET ON THE DATE OF TRANSFER OF ORIGINAL ASSET, THEN THE PROVISIONS OF SECTION 5 4F(1) OF THE ACT SHALL NOT APPLY. MEANING THEREBY, THE CLAIM OF THE ASSESSEE U/S 54(F)(1) OF THE ACT IS NOT MAINTAINABLE AND WHERE THE ASSESSEE OWNS MORE THAN ONE RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET ON THE DATE OF TRANSFER OF ORIGINAL ASSET WHICH WAS OLD AND THE REVENUE WANTS TO TAX CAPITAL GAIN ON SUCH T RANSFER OF ASSET. IN THE PRESENT CASE, ADMITTEDLY AND UNDISPUTEDLY, THE ASSE SSEE WAS OWNING PROPERTY NO. 2109, SECTOR 28, FARIDABAD AND CLAIMED EXEMPTIO N U/S 54F OF THE ACT BY PURCHASING PROPERTY NO. 614, SECTOR 21C, FARIDABAD. THE AO NOTED THAT THE ASSESSEE ALSO OWNS SFS FLAT 36F, FIRST FLOOR, POCKE T C, SIDDARTH EXTENSION RESIDENTIAL SCHEME, NEW DELHI, THEREFORE, HE IS NOT ENTITLED TO EXEMPTION AS PER ITA NO. 3474/D/2013 & ITA 3292/D/2013 AY 2006-07 9 PROVISO (A) (I) TO SECTION 54F(1) OF THE ACT. HOWE VER, FROM THE COPY OF WILL AVAILABLE AT PAGE 65 OF THE ASSESSEES PAPER BOOK A VAILABLE AT PAGE 65 OF THE ASSESSEES PAPER BOOK, IT IS VIVID THAT THE ASSESSE E DOES NOT EXCLUSIVELY OWN THIS PROPERTY BUT HAVING ONLY 50% OF THE SHARE JOINTLY W ITH SMT. SAROJ AGGARWAL. HENCE, THE DICTA LAID DOWN BY HONBLE MADRAS HIGH C OURT IN THE CASE OF DR. P.K. VASNATHI RANGARAJAN VS CIT (SUPRA) SUPPORTS TH E CASE OF THE ASSESSEE WHEREIN THEIR LORDSHIPS HELD THAT THE JOINT OWNERSH IP OF THE PROPERTY WOULD NOT STAND IN THE WAY OF CLAIMING EXEMPTION U/S 54 OF TH E ACT. IN A PECULIAR SITUATION WHERE THE ASSESSEE DID NOT OWN RESIDENTIAL HOUSE EX CLUSIVELY IN HIS NAME AND WAS THE HOLDER OF 50% SHARE AND HENCE, THE ASSESSEE WAS HELD TO BE ENTITLED TO EXEMPTION U/S 54F OF THE ACT. ON A SPECIFIC QUERY FROM THE BENCH, LD. DR COULD NOT SHOW US ANY OTHER JUDGEMENT OR ORDER WHICH COUL D LEAD US TO TAKE A DIFFERENT VIEW ON THIS ISSUE. HENCE, WE ARE INCLIN ED TO HOLD THAT THE ISSUE RAISED BY THE ASSESSEE IS SQUARELY COVERED IN FAVOUR OF TH E ASSESSEE BY THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE OF DR. P.K. V ASNATHI RANGARAJAN VS CIT (SUPRA) AND THE ASSESSEE CANNOT BE DENIED EXEMPTION U/S 54F OF THE ACT MERELY BECAUSE HE WAS THE HOLDER OF 50% OF THE SHARE JOINT LY WITH SMT. SAROJ AGGARWAL OF THE PROPERTY SITUATED AT SIDDARTH EXTENSION RESI DENTIAL SCHEME AND THE AO WAS NOT JUSTIFIED IN DENYING CLAIM OF THE ASSESSEE U/S 54 OF THE ACT AND THE FIRST APPELLATE AUTHORITY WAS INCORRECT IN UPHOLDING THE ACTION OF THE AO ON THIS ISSUE. FINALLY IN VIEW OF OUR FOREGOING DISCUSSION , WE DISMISS THE ACTION OF THE ITA NO. 3474/D/2013 & ITA 3292/D/2013 AY 2006-07 10 AO AS WELL AS IMPUGNED ORDER PERTAINING TO THE CLAI M OF DEDUCTION U/S 54F OF THE ACT AND THE AO IS DIRECTED TO ALLOW THE SAME TO THE ASSESSEE. ACCORDINGLY, GROUND NO. 2 OF THE ASSESSEE IS ALLOWED. GROUND NO.3 13. APROPOS GROUND NO. 3, LD. COUNSEL OF THE ASSESS EE SUBMITTED THAT THE ASSESSEE HAS NOT RECEIVED ANY RENT FROM THE HOUSE P ROPERTY SITUATED AT SIDDARTH EXTENSION RESIDENTIAL SCHEME, NEW DELHI AND THE AO MADE ADDITION IN THIS REGARD ON THE BASIS OF SURMISES AND CONJECTURES WHI CH IS NOT SUSTAINABLE. LD. COUNSEL FURTHER SUBMITTED THAT THE RENTAL INCOME CA N ONLY BE ASSESSED WHEN THE ASSESSEE HAD ACTUALLY EARNED RENT FROM THE ALLEGED PROPERTY AND THE PROPERTY WAS LYING VACANT DURING THE RELEVANT FINANCIAL PERIOD, THEREFORE, NO ADDITION IN THIS REGARD COULD BE MADE. 14. REPLYING TO THE ABOVE, LD. DR SUPPORTED THE ACT ION OF THE AO AND THE CONCLUSION OF THE CIT(A) AND SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS SIMPLY SUBMITTED THAT ALL THE RELE VANT DETAILS OF HIS INCOME WERE SUBMITTED AND THE ASSESSEE NOWHERE DENIED HAVI NG INCOME OF RS.25,200 FROM THE PROPERTY SITUATED AT SIDDARTH EXTENSION RE SIDENTIAL SCHEME, THEREFORE, INCOME IN THIS REGARD WAS RIGHTLY ASSESSED ON THE B ASIS OF PRECEDING YEARSS FACTS. LD. DR ALSO SUBMITTED THAT BEFORE THE FIRST APPELLATE AUTHORITY, AR OF THE ASSESSEE ACCEPTED THAT THE ASSESSEE WAS STILL HOLDI NG THE SAID PROPERTY AND DID ITA NO. 3474/D/2013 & ITA 3292/D/2013 AY 2006-07 11 NOT SAY ANYTHING ABOUT THE RENTAL INCOME DERIVED TH EREFROM, THEREFORE, THE RENTAL INCOME WAS RIGHTLY BROUGHT TO TAX BY THE AUTHORITIE S BELOW. 15. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISS IONS, FIRSTLY, WE MAY POINT OUT THAT UNDISPUTEDLY, THE ASSESSEE WAS OWNING/HOLD ING PROPERTY SITUATED AT SIDDARTH EXTENSION RESIDENTIAL SCHEME, NEW DELHI DU RING THE RELEVANT FINANCIAL PERIOD. WE MAY FURTHER POINT OUT THAT THE AO HAS N OT BROUGHT OUT ANY ALLEGATION, EVIDENCE OR FACT AGAINST THE ASSESSEE T HAT THE ASSESSEE HAD ACTUALLY EARNED RS.25,200 AS RENTAL INCOME FROM THE SAID PRO PERTY DURING THE RELEVANT FINANCIAL PERIOD. THIS KIND OF ADDITION CANNOT BE MADE ON THE BASIS OF FACTS OF THE EARLIER ASSESSMENT YEAR AND FOR MAKING SUCH TYP E OF ADDITION, IT IS RELEVANT THAT THE AO IS DUTY BOUND TO BRING OUT AND ESTABLIS H THE FACT THAT THE AO ACTUALLY EARNED RENTAL INCOME FROM THE ALLEGED PROP ERTY DURING THE RELEVANT FINANCIAL PERIOD WHICH WAS NOT OFFERED TO TAX BY TH E ASSESSEE. FROM CAREFUL READING OF THE IMPUGNED ASSESSMENT ORDER AND ORDER OF THE CIT(A), WE ARE UNABLE TO SEE ANY FACT OR EVIDENCE WHICH CAN SUBSTA NTIATE THAT THE ASSESSEE ACTUALLY EARNED RENTAL INCOME FROM THE SAID PROPERT Y DURING THE PREVIOUS YEAR, EVEN WE ARE UNABLE TO SEE ANY NAME OR ENTITY TO WHO M THE SAID PROPERTY WAS RENTED BY THE ASSESSEE. IN THIS SITUATION, ADDITIO N MADE BY THE AO ON THE BASIS OF SURMISES AND CONJECTURES CANNOT BE HELD AS SUSTA INABLE AND THE VIEW TAKEN BY THE CIT(A) IS MECHANICAL AND WE DECLINE TO ACCEPT T HE SAME. ACCORDINGLY, ITA NO. 3474/D/2013 & ITA 3292/D/2013 AY 2006-07 12 ADDITION MADE BY THE AO IS DIRECTED TO BE DELETED A ND THUS, GROUND NO. 3 OF THE ASSESSEE IS ALSO ALLOWED. 16. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AND APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9.9.2015. SD/- SD/- (L.P. SAHU) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 9TH SEPTEMBER 2015 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. C.I.T.(A) 4. C.I.T. 5. DR BY ORDER ASSTT.REGISTRAR