HC deleted sec. 69 additions as assessee duly explained source of advance rental income

[2019] 105 taxmann.com 229 (Kerala)/[2019] 412 ITR 199 (Kerala)(MAG)

IT: Where AO made addition to assessee’s income under section 69 in respect of advance rent received, since source was clear and there was proper explanation for amount in question in books of account, impugned addition was to be deleted

Section 69, read with section 28(i), of the Income-tax Act, 1961 – Unexplained investment (Rent receipts) – Assessment year 2004-05 – Assessee company was engaged in letting out commercial spaces – It entered into a contract with another company for letting out a commercial space towards which said other company had advanced certain amount as rent – Company, who advanced rent could not occupy premises allegedly due to company having not received certain licences for carrying out proposed business activities – In relevant previous year, amount was shown as a liability in accounts of assessee – Assessing Officer treated said amount as unexplained investment under section 69 – Tribunal, however, deleted addition made by Assessing Officer – Whether since source was clear and there was proper explanation for amount in question in books of account, same could not be taken as unexplained investment or unexplained cash credit – Held, yes

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