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2017 (8) TMI 26 - AT - Income TaxNotional fair rental value - computation of notional rent - Held that:- AO had taken the market rent from the website on 28/07/2011 whereas the assessment order was passed on 30/12/2011 and thus there was almost a period of 6 months between the date the information was obtained from the website and the date on which the assessment order was passed. The Ld. CIT (Appeals) has further observed that the AO should have intimated the proposed adoption of notional rent to the assessee and that the AO was not right in making addition behind the back of the assessee under assumed circumstances. CIT (Appeals) proceeded to adopt a notional rent of ₹ 12,000/- per month instead of ₹ 22,000/- per month as adopted by the AO. In our considered opinion, the AO was patently wrong in adopting a figure of notional fair rental value without confronting the assessee with the same and as such the entire addition is liable to be deleted. However, since the assessee has not challenged the action of the Ld. CIT (Appeals) in upholding the computation of notional rent to the extent of ₹ 12,000/- per month, we cannot grant any further relief to the assessee but deem it fit to dismiss ground numbers 1 and 2 of the Department’s appeal. Addition under section 68 - Held that:- Hon’ble Delhi High Court in the case of CIT versus Divine Leasing and Finance Ltd [2006 (11) TMI 121 - DELHI HIGH COURT] for the proposition that the burden of proof can seldom be discharged to the hilt by the assessee and if the AO harbours doubt of legitimacy to any subscription, he is empowered to carry out thorough investigations but if the AO fails to unearth any wrong or illegal dealings, he cannot adhere to his suspicions and treat the subscribed capital as the undisclosed income of the company. CIT (Appeals) correctly observed that in all the cases the assessee had submitted all possible evidences and there was no evidence on record which may prove that assessee had given cash for receiving advances. The Ld. CIT (Appeals) has further observed that the assessee had duly discharged his burden of proof which a person of ordinary prudence would discharge under section 68 of the Act and that once the assessee has discharged his primary onus, the burden shifts to the AO to prove that the transaction of advance was not genuine. - Decided in favour of assessee.
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