Case Law Details
Sunil Kumar Ahuja Vs ACIT (ITAT Hyderabad)
ITAT Hyderabad held that interest income received towards loan extended against mortgage of properties cannot partake the character of rental income.
Facts- The assessee is an individual and derives income from investment in real estate and share marketing. He had filed his original return of income on 31.12.2009 admitting total income of Rs.83,95,860/- and agricultural income of Rs.9,28,856/-. A search and seizure operation u/s 132 of the I.T. Act was conducted at the residential and business premises of the assessee on 17.09.2008. Notice u/s 153A of the Act was issued and served on the assessee. However, no return of income in response to such notice was filed. AO completed the assessment u/s 153A r.w.s. 143(3) on 30.12.2010 determining the total income of the assessee a Rs.2,09,52,528/- wherein apart from other additions he made addition of Rs.34,14,900/- towards house rent and treated the agricultural income of Rs.9,28,856/- as income from other sources.
In appeal, the learned CIT (A) confirmed the additions made by AO. Aggrieved with such order of the CIT (A) the assessee is in appeal before the Tribunal.
Conclusion- We find the Assessing Officer in the instant case made addition of Rs.34,14,900/- by treating the same as “income from other sources” as against rental income shown by the assessee on the ground that the assessee could not prove the existence of the persons against whom he has shown the cash receipt as rental income as those persons were not in existence and were not traceable. It is the case of the Assessing Officer that the assessee had given certain amount os loan against mortgage of property and such interest income has to be treated as income from other sources and not rental income.
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