Income Tax Appellate Tribunal - Pune
Deokisan Bastiram Sarda,, Nashik vs Assessee on 13 March, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "A", PUNE
Before Shri Shailendra Kumar Yadav, Judicial Member,
and Shri R.K.Panda, Accountant Member.
ITA.No.352/PN/2011
(Asstt. Year : 2006-07)
Deokisan Bastiram Sarda,
Plot No.A-38, NICE, Satpur,
Nashik. .. Appellant
Vs.
ITO, Ward-2(1),
Nashik. .. Respondent
Assessee by : Shri Abhay Avchat
Department by : Ms.Ann Kapthuama
Date of Hearing : 13.03.2013
Date of Pronouncement : 28.03.2013
ORDER
PER SHAILENDRA KUMAR YADAV, JM:
This appeal has been filed by the assessee against the order of the CIT(A) on the following grounds:
1. Without considering law, facts and circumstances of the case, the learned Income Tax Officer, Ward 2(1), Nashik erred in assessing the income of the assessee at Rs.4,97,673/- instead of returned income of Rs.2,47,770/- the learned Commissioner of Income Tax (Appeals)-ll, Nashik erred in confirming the same.
2. The learned Income Tax Officer, Ward 2(1), Nashik erred in assessing total rent of Rs. 6,87,000/- as Assessee's income instead of 50% component thereof, and the learned Commissioner of Income Tax (Appeals)-II, Nashik has erred in confirming the same.
3. On facts and circumstances of the case, the Assessing Officer was not justified in assessing total rent of Rs.6,87,000/- as assessee's income when only 50% of the same belongs to the assessee.
4. The learned Commissioner of Income Tax (Appeals)-II, Nashik erred in passing order under section 250 dated January 28, 2011 without application of mind and in particular in assessing total rent of Rs. 6,87,000/- as assessee's income, under the pretext that the property is owned by the assessee.
5. The learned Assessing Officer erred in assessing total rent of Rs.6,87,000/- as assessee's income by wrongly 2 holding that the assessee is diverting his own income in the name of Kumari Ovee Rameshwar Sarda by bifurcating the rental income and learned Commissioner of Income Tax (Appeals)-II, Nashik erred in confirming the same.
6. The order under section 250 dated January 28, 2011 of the Commissioner of Income Tax (Appeals) - II, Nashik is bad in law and needs to be cancelled.
2. Brief facts of the case are that the assessee is an individual who filed the return of income declaring total income of Rs.2,47,770/- that includes income from house property and interest on savings bank deposits. The assessee is owner of property in Shree Nirmal Commercial Ltd., Nariman Point, Mumbai. The total area of the premises is 1000 sq.ft. which has been given on rent to SICOM Ltd. On verification the Assessing Officer found that the rent receipts as per TDS certificate issued by SICOM Ltd. (tenant) in the name of the assessee was at Rs.6,87,000/-. The assessee, however, had shown rent receipts amounting to Rs.3,30,000/- in his computation of income filed alongwith the return. The assessee has claimed credit of entire TDS amounting to Rs.1,05,120/- in his return. When confronted on this issue, the assessee furnished that 500 sq.ft. belongs to his grand-daughter Kumari Ovee Rameshwar Sarda who has shown rental income from SICOM Ltd., for her share in the property under reference in her income tax return for A.Y. 2005-06 and 2006-07. Since the TDS certificate issued by SICOM Ltd., was in the name of the assessee and the entire rent receipts issued by SICOM Ltd., were directly credited to the bank accounts of the assessee, the Assessing Officer did not accept the explanation of the assessee and taxed the entire rent receipts amounting to Rs.6,87,000/- in the hands of the assessee holding that the assessee had tried to divert 50% of his rental income in the name of his grand daughter. Matter was carried before the First Appellate Authority, who has confirmed the action of the Assessing Officer on this issue. Same has been opposed before us.
33. The Ld. Authorised Representative submitted that the Assessing Officer was not justified in assessing the total rent of Rs.6,87,000/- as assessee's income while he is entitled for 50% of the same as per family settlement/partition in the property. This family settlement/partition could not be filed before the lower authorities at the relevant point of time because same could not be traced by the assessee at the relevant point of time. According to the Ld. Authorised Representative, fact remains that assessee's grand daughter has also paid tax on 50% of the rent in question, so addition of same in the hands of assessee is not justified. The Assessing Officer was not justified in holding that the assessee is diverting his own income in the name of Kumari Ovee Rameshwar Sarda by bifurcating the rental income. Accordingly, same should be set aside. On the other hand, Ld. Departmental Representative supported the order of the authorities below and submitted that assessee should not be given second innings because they could not establish the bifurcation of the property for claiming bifurcated rent at relevant point of time.
4. After going through the above submissions and material on record, we find that TDS certificate furnished by the assessee in the name of Kumari Ovee Rameshwar Sarda is from August, 2010, and no documentary evidence was filed to claim that Kumari Ovee Rameshwar Sarda was owner of the half of the property i.e., 500 sq.ft. of property given on rent to SICOM Ltd., for the period under appeal, i.e., A.Y. 2005-06. According to lower authorities ownership of the immovable property is only by registration of document/deed. It is settled legal position that there is no compulsion for division of HUF property amongst its coparceners by registered document. Family settlement can be done on plain paper as well but facts remain that same was not produced before the lower authorities. Moreover, TDS certificates issued by Shree Nirmal Commercial Ltd., Mumbai, was also in the name of assessee at relevant point of time. It is not emerging from the facts whether after division of this property, her name was mutated in the relevant records of the Society Shree Nirmal Commercial Ltd., 4 Nariman Point, Mumbai. At the same time, Revenue has not disputed the fact that she has returned her half share which amounts to double taxation of the same property income. In overall interest of justice, we set aside the order of the CIT(A) and restore the matter to the Assessing Officer with a direction to decide the same as per fact and law. The Assessing Officer is at liberty to look into the validity of the partnership deed/family settlement claimed to be entered by the family members of the assessee. The Assessing Officer is also at liberty to look into the matter whether the strength of the alleged family settlement/partnership deed in the name of the grand daughter in question has been entered into relevant record of the society and decide the issue. So the Assessing Officer is directed to do the assessment de novo as per fact and law after providing due opportunity of hearing to the assessee.
5. As a result, the appeal filed by the assessee is allowed for statistical purposes.
Pronounced in the open court on this the 28th day of March, 2013.
Sd/- Sd/-
( R.K.PANDA ) ( SHAILENDRA KUMAR YADAV )
ACCOUNTANT MEMBER JUDICIAL MEMBER
gsps
Pune, dated the 28th March, 2013
Copy of the order is forwarded to:
1. The Assessee
2. The ITO, Ward-2(1), Nashik.
3. The CIT(A)-II, Nashik.
4. The CIT-II, Nashik.
5. The DR "A" Bench, Pune.
6. Guard File.
By Order
//TRUE COPY//
Private Secretary,
Income Tax Appellate Tribunal,
Pune.