Addition of Rental Income under "Income from Other Sources" Invalid as already declared under "Income from House Property": ITAT Strikes Down Double Taxation [Read Order]

The Income Tax Appellate Tribunal (ITAT), Chandigarh Bench has invalidated the addition of rental income under the head "Income from Other Sources" wherein the assessee has already offered the same to tax under the head "Income from House Property." The decision effectively strikes down the case of double taxation of the same income imposed on the assessee.

The appeal was filed by Shri Dinesh Kumar Singal against the order of the Commissioner of Income Tax (Appeals) (CIT(A)).

The assessee had raised two grounds of appeal, the first ground challenging the addition of Rs. 3,00,000 as rental income under "Income from Other Sources" through a prima facie adjustment under section 143(1) of the Income Tax Act, 1961.

The second ground is with respect to the rectifiability of a mistake apparent from the record under section 154 of the Income Tax Act, 1961.

The assessee represented by Ashwani Kumar, CA and Aditya Kumar, CA argued that the addition of rental income under "Income from Other Sources" was unjustified since the same income had already been disclosed and taxed under the head of "Income from House Property."

The assessee highlighted the discrepancy between the acknowledgement of rental income under the appropriate head "Income from House Property" and the subsequent imposition of tax under "Income from Other Sources" and argued that this overlap leads to double taxation.

The revenue represented by Smt. Amanpreet Kaur stated that the decision of the Central Processing Center (CPC) was based on the inconsistency between the income under the head “Income from other sources” as declared by the assessee in the return of income and as reflected in Form No. 26AS.

The assessee argued that CPC has erroneously added the same income under the head "Income from Other Sources" based on information from Form No. 26AS.

The bench noted that there was a mistake apparent from the record as CPC had acknowledged the rental income under the appropriate head "income from house property" as declared by the assessee, but still brought it to tax again under the head "income from other sources."

The two-member bench consisting of Aakash Deep Jain (Vice President) and Vikram Singh Yadav (Accountant Member) has directed to delete the addition made by CPC and confirmed by CIT(A) as it resulted in double taxation of the same income.

The appeal of the assessee was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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