Ravinder Raghav Huf vs ITO Ward 3(1), Gurgaon

PER VIKAS AWASTHY, JUDICIAL MEMBER:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short 'the CIT(A)'] dated 11.02.2026, for Assessment Year 2020-21.

Shri Pranav Yadav, appearing on behalf of the assessee at the outset submits that he is not pressing Ground Nos. 1 and 2 of the appeal challenging validity of reopening of assessment.

The ld. Counsel submits that the Assessing Officer (AO) had made an addition of Rs.22,000/- under the head “Income from House Property”. The said addition has been made merely for the reason that there was a discrepancy between the actual rent received by the assessee and the amount of rent on which TDS u/s 194-I of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was purportedly deducted by the tenant, M/s Triumph Auto Engineering Pvt. Ltd. The ld. Counsel submits that the assessee has offered to tax the rental income actually received. The ld. Counsel further submits that the second addition of Rs.6,76,111/- has been made in respect of term deposits made by the assessee in the bank. The ld. Counsel submitted that the AO has made the aforesaid addition merely on the presumption that out of the term deposits of Rs.2,45,75,396/- made by the assessee in Sarva Haryana Gramin Bank amount of Rs.2,38,99,285/- is explainable i.e. it represents compensation received by assessee on acquisition of land. The remaining amount of Rs.6,76,111/- is unexplained money. The ld. Counsel submits that the term deposits of Rs.2,45,75,396/- included the compensation received on acquisition of land as well as the amount already available with the assessee in the bank account, including accrued interest. The ld. Counsel thus prayed for deleting the additions made by the AO.

Shri Manoj Kumar, representing the Department vehemently defending the impugned order and prayed for dismissing appeal of the assessee.

Both sides heard, orders of the authorities below examined. The assessee in appeal has assailed the addition of Rs.22,000/- on account of the difference between the rental income offered to tax by the assessee in the return of income and the amount on which TDS was deducted u/s 194-I of the Act by the deductor. After perusing the documents available on record, I am of the considered view that the assessee has been able to substantiate that the rental income received during the period relevant to the assessment year under appeal has been correctly offered to tax. Hence, the addition of Rs.22,000/- made by the AO is directed to be deleted.

The second addition assailed by the assessee in appeal is with regard to the difference between the amount of term deposits and amount received on acquisition of land. Admittedly, the assessee had received compensation of Rs.2,38,99,285/- on acquisition of land. Thereafter, the assessee made term deposits amounting to Rs.2,45,75,396/-. The assessee explained that the difference between the two amounts, i.e., Rs.6,76,111/-, was the amount already available in his bank account. After examining the documents furnished by the assessee, I am satisfied that the assessee has been able to explain the source of the differential amount of Rs.6,76,111/-. Accordingly, the addition of the aforesaid amount is directed to be deleted.

In the result, appeal of the assessee is partly allowed in the term aforesaid.