In a relief to Humdard, the Delhi High Court has held that Material collected from the internet, estate agents cannot be termed as corroborative evidence for levying house tax.
The Assessing Officer, for the Assessment Year 2007-08, had noted that the respondent/assessee had received donation from Hamdard Dawakhana (Wakf) amounting to ₹9,43,81,000/- and rental income of ₹46,41,028/-. In addition, the respondent/assessee had also received ₹20,00,00,000/- as corpus donation from Hamdard Dawakhana (Wakf) during the said Assessment Year. Relying upon the enquiry made from one M/s CB Richard Ellis South Asia Private Limited and from the various websites, namely, makan.com; 99acres.com; magicbricks.com, the Assessing Officer held that the property at Asaf Ali Road, New Delhi and Rajdoot Marg, Chanakyapuri, New Delhi, had been let out by the respondent/assessee to Hamdard Dawakhana (Wakf) at a much lower rate as compared to the market rate of rent and therefore, invoked the provisions of Section 13(2)(b) read with Section 13(3) of the Act.
The appellant/ revenue further submitted that market rent, as found by the Assessing Officer, had been confronted to the respondent/assessee, however, the respondent/assessee never asked for the source of information nor asked for an opportunity to controvert the same during the assessment proceedings. He submits that in terms of Section 13(1)(c)(ii) of the Act, it was imperative on the Assessing Officer to examine whether any part of the income or any property of the charitable trust is used for the benefit of a specified person referred to in Section 13(3)(b) of the Act. Having found so, the Assessing Officer was entitled to make the additions in the Return of Income of the respondent-assessee.
The ITAT has observed that the revenue had failed to bring on record any cogent evidence to show that the rent received by the respondent/assessee, in the facts of the case, was inadequate. It has held that the material collected from the internet as well as the estate agents cannot be termed as a corroborative piece of evidence in this regard. It has further held that the rent received by the respondent/assessee exceeds the valuation adopted by the Municipal Corporation of Delhi for the purpose of levying house tax.
The division bench of Justice Navin Chawla and Justice Manmohan has ruled that respondent/assessee and taken note of by the learned ITAT and not denied by the appellant/revenue, the property at Rajdoot Marg was not even ready during Assessment Year 2008-09 and was lying vacant. In the absence of any such inquiry by the Assessing Officer, the invocation of Section 13(2)(b) of the Act was clearly flawed and rightly rejected by the ITAT.
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