Sunil Kumar Vs ACIT (ITAT Delhi)
The Delhi Bench of the Income Tax Appellate Tribunal allowed the assessee’s appeal for Assessment Year 2014-15 and deleted additions of Rs. 14,88,110/- towards notional rent and Rs. 44,51,750/- towards unexplained cash. The appeal arose from the order dated 31.01.2017 passed by the Commissioner of Income-Tax (Appeals), 31, New Delhi, confirming the assessment order dated 29.03.2016.
The assessee, an individual deriving income from house properties and other sources, was covered during a search and seizure operation conducted under Section 132 of the Income-Tax Act, 1961 in the AKN Group cases. Pursuant to proceedings under Section 142(1), the assessee filed a return on 30.03.2015 declaring income of Rs. 38,90,638/-. The Assessing Officer subsequently issued notices under Sections 143(2) and 142(1) and completed the assessment under Section 143(3).
The first dispute concerned an addition of Rs. 14,88,110/- on account of notional rent relating to a vacant property. The assessee contended that the rent had never been earned or realised. The assessee also relied upon the Tribunal’s order dated 09.03.2022 in his own case for Assessment Years 2011-12, 2012-13 and 2013-14, where similar additions had been deleted.
The Assessing Officer had estimated the annual letting value of the property at Rs. 12,00,000/- for Assessment Year 2008-09 and applied an annual enhancement of 10% for subsequent years, referring to Section 23(1)(c). The Tribunal noted that similar additions had been made for Assessment Years 2011-12, 2012-13 and 2013-14. In the earlier proceedings, the Coordinate Bench had found that the Assessing Officer had not based the estimated annual letting value on any reasonable working and that no description of the property, its area or prevalent market rental rates had been brought on record.
