DCIT Vs Smt.Indira Kamineni (ITAT Hyderabad)
The Income Tax Appellate Tribunal (ITAT), Hyderabad, disposed of the Revenue’s appeal against the order of the Commissioner of Income Tax (Appeals), NFAC, for Assessment Year 2018-19.
The assessee, an individual and a 70% beneficiary of KSN Trust, filed a return under Section 139(1) declaring nil income. During scrutiny assessment, the Assessing Officer found that KSN Trust had reported losses of ₹1,73,62,048 under the head “Income from House Property” and ₹1,66,15,605 under the head “Income from Other Sources.” Based on a 70% beneficial interest, the assessee claimed losses of ₹1,21,53,433 and ₹81,30,924 respectively in the individual return. The Assessing Officer disallowed the claims and completed the assessment under Section 143(3) read with Sections 143(3A) and 143(3B).
The CIT(A) allowed the assessee’s appeal, holding that KSN Trust was a determinate trust and that the assessee was entitled to claim the corresponding share of loss in the individual return. The Revenue challenged this finding before the Tribunal. It submitted that KSN Trust had not filed a return of income, its income or loss had not been determined under the Act, and the CIT(A) had allowed the claim without examining the computation of trust losses or obtaining a remand report. The assessee contended that KSN Trust was a non-discretionary trust with determinate beneficiary shares and that Sections 161 and 166 permitted direct assessment of beneficiaries, justifying the claim of loss.
