It is well known that Assessing Officers spare no effort in their zeal to collect taxes from hapless taxpayers. They can stoop to any extent and level all sorts of allegations without any regard to the stature of the taxpayer or his track record of paying taxes.
Sachin Tendulkar, the illustrious sporting champion, is the latest to fall victim to the exuberance of the AO to make additions for the flimsiest of reasons.
Though Sachin offered a hefty income of Rs. 61 crore for AY 2012-13, he had to face the ignominy of being accused by the AO of making a wrong claim for vacancy allowance under section 23(1)(c) of the Act.
Sachin pleaded with the AO that he could not find a suitable tenant for his flat and so he had calculated the annual at Nil by claiming vacancy allowance.
Normally, CsIT(A) are expected to rush to the rescue of taxpayers in such cases.
However, the worthy who decided Sachin’s case was in mood to play fair.
Instead, he held that the letters written by Sachin to the builder requesting him to identify tenants for the flat at Sapphire Park are “purported letters written on plain paper” and that there is “no evidences for dispatch of these letters as well as receipt of these letters by the builder”.
The clear implication of the CIT(A)’s observations is that Sachin tendered bogus and fake letters to save petty tax.
This allegation did not go down well with a Division Bench comprising of Hon’ble Shamim Yahya (A. M) and Hon’ble Sandeep Gosain (JM).
“The authorities below have doubted the veracity of these letters and doubted the credentials of the assessee’s claim. In our considered opinion, this does not display application of mind to the facts of the case,” the Bench observed in a dry tone.
The Bench reminded the department that the assessee is a well renowned cricketer and that he has furnished a return declaring income of Rs.61.23 crore.
In contrast, the let out value of the property in dispute is assessed as only Rs.1,26,000.
It was also pointed out that the finding of the CIT(A) that the letters addressed by the assessee to the CIT(A) are fake “defies logic” because the same builder had helped the assessee to find tenant for another flat.
The Bench also came down heavily on the expectation of the department that the assessee should maintain a dispatch register for his letters. It described this as “abnormal expectation“.
The contention that Sachin Tendulkar should get stamped receipt from the builder for the receipt of his letters was dismissed as an “equally quixotic proposition”.
“The insinuation that the assessee has submitted bogus and fake documents to support the case that reasonable efforts were made to find out a tenant for the vacant flat, is not sustainable in law,” the Bench fumed.
The Bench was also not impressed by the vehement submission of the Department that despite Sachin’s unarguably busy professional engagements commanding huge amount of money, he should have embarked upon and displayed a more robust and exuberant expedition to find a tenant for his vacant flat by approaching other real estate brokers and keeping an infallible record thereof.
The submission was contemptuously dismissed as being “beyond normal conception”.
Hopefully, after the strictures by the ITAT, the Department will think twice before levelling defamatory allegations against honest taxpayers.