TMI Blog2013 (8) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. It is not correct that assessee had sufficient funds that were carried forward from the earlier AY and were deposited in the bank a/cs during the year under consideration - Following decision of Sumati Dayal Versus Commissioner of Income-Tax [1995 (3) TMI 3 - SUPREME Court] - Decided in favour of Revenue. Income from House property - Addition on house rent - notional interest on interest free security deposit - if AO finds that the actual rent received is less than the "fair/market rent" because of the reason that the assessee has received abnormally high interest free security deposit and because of that reason, the actual rent received is less than the rent which the property might fetch, he can undertake necessary exercise in that behalf - High Court in the case of Commissioner of Income Tax Vs. J. K. Investors (Bombay) Ltd., [2000 -TMI - 14566 - BOMBAY High Court] categorically rejected the formula of addition of notional interest while determining the "fair rent" - Decided in favor of the assessee Income from House property - whether the annual letting value fixed by the Municipal Authorities under the Delhi Municipal Authority Act can be the basis of adopting ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to Rs.22 lakhs. During the assessment proceedings, AO found that assessee had deposited cash on as many as 12 occasions in the month of April 2007 in his bank a/c in HSBC Bank and Standard Chartered Bank. AO directed the assessee to explain the source of cash deposited in the said banks. After considering the submissions of the assessee dated. 04-11-2010 and 16-11-2010, AO held that the assessee had made drawings of Rs.37.99 lakhs during the Financial Year (FY) 2006-07 and Rs.37.43 lakhs during the FY 2007-08, that assessee required a substantial amount for house-hold expenses, that withdrawals for both the AYs were almost in the same range, that assessee could not have been left with substantial savings during the FY 2006-07 which could have been deposited in the subsequ-ent AY, that claim made by the assessee about depositing 16lakhs from withdrawal of FY 2006-07 was factually incorrect, that amounts withdrawn at different dates were utilised for meeting different expenses, that amounts deposited in bank a/cs. in April 2007 were from the un-accounted sources for which no proper explanation was offered by the assessee. Finally, he held that cash deposits made in April 2007 we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the opinion that from these papers do not prove anything. If the withdrawals for both the years are compared it becomes clear that they are of the same range. In these circumstances, the claim of the assessee that a sum of Rs. 16 lakhs were deposited out of the withdrawals made in the earlier AY. cannot be accepted in absence of some positive evidences. 3.4. In tax-matters, liability to pay taxes is decided on pre-ponderances on probabilities - evidence required in the criminal cases do not decide the taxation matters. The cash -dealings of the assessee for the year under consideration are against normal human behavior. As per the settled law of taxation in all cases in which a receipt is sought to be taxed as income, the burden lies on the AO to prove that it is within the taxing provision and if a receipt is in the nature of income, the burden of proving that it is not taxable because it falls within exemption provided by the Act lies upon the assessee. But, in view of provisions of section 68 of the Act ,where any sum is found credited in the books of the assessee for any previous year the same may be charged to income-tax as the income of the assessee of that previous year i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying upon the decisions of McDowell Company Ltd (154 ITR 148) and Juggilal Kamlapat (73 ITR 702) delivered by the Hon ble Supreme Court, he concluded the assessee was not showing real income based on the benefits derived from the said properties. AO further relied upon the orders of the ITAT Mumbai in the case of M/s. Tivoli Investment and Trading Co. P. Ltd., (ITA No. 3269/Bom/1993 and 3009/Bom/1994 dt. 30-06-2003). He also relied upon the decision of Apar Ltd, Chem Mech. P. Ltd (83 ITD 427) and Baker Technical Services P. Ltd., (30 DTR 1) to support his contention that benefit derived by the assessee from interest free deposits could be taken into consideration for determination of Fair Rental Value (FRV). Accordingly, AO computed the interest @ 12% on the total deposits of 3.19 Crores and added the sum of Rs. 38.28 Lakhs to the income of the assessee under the head property . 5. Assessee preferred an appeal before the FAA. After considering the submissions of the assessee and the Assessment Order, he held that AO had made the addition by considering the notional interest as part of ALV by relying on the decision of M/s. Tivoli Investment and Trading Co. P. Ltd., (supra), tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t AO had not brought on record any material to prove that properties were capable of yielding earning more rentals, that the security deposit was Rs. 64.45 Lakhs, that assessee had received advance rental of Rs. 2.54 Crores from the tenants. He relied upon the cases of JK Investors (SLP No. 5480/2001 before Hon ble Supreme Court) and Asian Hotels Ltd., (ITA No. 794/2007) delivered by Hon ble High Court of Delhi. He also referred to the case of Reclamation Realty India Pvt. Ltd., delivered by the ITAT Mumbai vide ITA No. 1411/Mum/2007 in this regard. 7. We have heard the rival submissions and perused the material put before us. It is found that assessee was co-owner of seven residential/commercial properties, that he earned gross rental of Rs.1,65,87,500/- being 50% of the co-owners of the said properties, that rental value for both the co-owners was Rs. 3,31,75,000/-. Assessee has taken deposits as well as advance rentals from the tenants. It is found that assessee had received security deposits of Rs. 64,45,530/- whereas Rs. 2,54,58,435/- were the advance rentals that were adjusted against the rents of the next year. AO has not done any exercise to find out the FMV from the neig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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