Subject: Briefly the facts of the case are that in this case return of income was filed by assessee declaring NIL income.
Referred Sections:
Section 144 of the I.T. Act
Section 10 of the I.T. Act
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES "SMC" : DELHI
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
ITA.No.742/Del./2018
Assessment Year 2014-2015
Shri Pankaj Kayathwal,
The Income Tax Officer,
H.No.241, Sector-30,
Faridabad, Haryana vs. Ward -2 (4),
PIN 121000 PAN ALRPK8316M
Noida.
(Appellant) (Respondent)
For Assessee : Shri Pankaj Kayathwal,
Party-in-Person
For Revenue : Shri S.L. Anuragi, Sr. D.R.
Date of Hearing : 01.05.2019
Date of Pronouncement : 02.05.2019
ORDER
This appeal by Assessee has been directed
against the Order of the Ld. CIT(A)-1, Noida, Dated
25.09.2017, for the A.Y. 2014-2015.
2. I have heard the Assessee-in-Person and Ld. D.R.
on behalf of the Revenue.
3. Briefly the facts of the case are that in this case
return of income was filed by assessee declaring NIL
income. The assessee is an individual and deriving income
2
ITA.No.742/Del./2018 Shri Pankaj
Kayathwal, Faridabad.
from salary. The case was selected for scrutiny. The A.O.
issued statutory notices for completion of the assessment
which remain un-complied with. The A.O. issued show
cause notice under section 144 of the I.T. Act and asked for
the reply of the assessee and supporting documents on the
points specified in the notice. The A.O. pointed-out that
assessee filed return of income at NIL. However, perusal of
26AS reveals that assessee has received salary of
Rs.25,41,859/- from M/s. L.G. Electronics India Pvt. Ltd.,
Greater Noida, which should have been shown in the return
of income. In the absence of any supporting documents, the
A.O. made addition of Rs.25,41,859/- under the head
"Income from Salary" and computed the income of assessee
at the salaried income.
3. The assessee preferred appeal before the Ld.
CIT(A). The Counsel for assessee submitted before Ld.
CIT(A) that he is an employee of Multinational Company and
submitted the details of his income obtained from the
employer for filing of the income tax return, but, his case
has not been properly handled and the details called for by
3
ITA.No.742/Del./2018 Shri Pankaj
Kayathwal, Faridabad.
the A.O. could not be furnished. It was submitted that gross
salary of the assessee was Rs.26,26,187/- instead of
Rs.25,41,860/- as considered by the A.O. Learned Counsel
for the Assessee, therefore, submitted that the correct figure
of the salary may be taken at Rs.26,26,187/-. The Counsel
for Assessee also submitted that assessee was entitled to
the deduction under section 10 of the I.T. Act amounting to
Rs.4,04,060/- being the rent paid by assessee in respect of
the house taken on rent. It was also claimed that amount of
Rs.1,24,080/- is an admissible deduction under the
provisions of Chapter-VIA of the I.T. Act, 1961.
3.1. The Ld. CIT(A) after considering the explanation
of assessee noted that assessee has paid rent to his wife
who in turn has been residing with the assessee in the same
house. The Ld. CIT(A), therefore, observed that there is a
funny situation wherein the Landlord of the house is using
the property let out for her residence as well as while
claiming to have let it out to a rent paying tenant.
Obviously, the arrangement is a collusive arrangement and
a colourable exercise to reduce the tax payable by the
4
ITA.No.742/Del./2018 Shri Pankaj
Kayathwal, Faridabad.
assessee. Therefore, claim of assessee for deduction under
section 10 of the I.T. Act was denied. The Ld. CIT(A),
however, find that claim of assessee for deduction under
Chapter-VIA is admissible. The same was accordingly
allowed. The total income of the assessee was determined at
the gross salary of Rs.26,26,187/- reduced by the
admissible deduction under Chapter-VIA of Rs.1,24,080/-.
4. The assessee in the present appeal has claimed
deduction of Rs.4,04,060/- on account of rent paid to his
wife.
5. After considering the rival submissions, I am of
the view that no interference is called for in the Order of the
Ld. CIT(A). The assessee submitted that rent was paid to his
wife who has shown the same as income in her return of
income. This itself is not justified to make a claim of
deduction under section 10 of the I.T. Act. The Ld. CIT(A)
has categorically recorded a finding of fact that assessee
paid the rent to his wife who is residing with the assessee in
the same house. It is, therefore, clear that alleged rent was
paid by the assessee to his wife as a owner of the house,
5
ITA.No.742/Del./2018 Shri Pankaj
Kayathwal, Faridabad.
who, in turn, have been residing in the same house with the
assessee. When the Landlord/owner have been residing in
the rented house, where is the question of paying any rent
by the assessee to the Landlord. The Ld. CIT(A), therefore,
correctly held that it is a colourable devise to avoid
legitimate payment of the taxes. No interference is required
in the matter. This ground of appeal of assessee has no
merit and the same is accordingly dismissed. No other point
is argued or pressed.
6. In the result, appeal of Assessee dismissed.
Order pronounced in the open Court.
Sd/-
(BHAVNESH SAINI)
Delhi, Dated 02nd May, 2019 JUDICIAL MEMBER
VBP/-
Copy to
1. The appellant
2. The respondent
3. CIT(A) concerned
4. CIT concerned
5. D.R. ITAT `SMC' Bench, Delhi
6. Guard File.
// BY Order //
Assistant Registrar : ITAT Delhi Benches : Delhi.
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