Punit Balan L/H of S. Balan, Pune V. Assistant Commissioner of Income-tax, Central Circle - 1(1), Pune

CO 51/PUN/2022

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A) which allowed the deduction of interest under section 24(b) of the Income Tax Act, 1961, for the assessment year 2014-15. The assessee, Balkrishnan Shanmugham Chettiar Alias S. Balan, had filed a return declaring a total income which was later revised. The Assessing Officer reopened the assessment and made additions to the income, which led to the appeal before the CIT(A). The CIT(A) allowed the deduction of interest, which was contested by the Revenue in the tribunal. The tribunal found that the treatment of interest in the books of account does not affect the admissibility of the expenditure while computing the assessable income.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137132 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 03-01-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-01-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 20-09-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 148; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S. S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.109/PUN/2021 िनधाᭅरण वषᭅ / Assessment Year: 2014-15 DCIT, Central Circle-1(1), Pune. Vs. Balkrishnan Shanmugham Chettiar Alias S. Balan, 1133/5, Nirankar F.C. Road, Shivaji Nagar, Pune- 411016. PAN : AALPC5158J Appellant Respondent C.O. No.51/PUN/2022 (Arising out of ITA No.109/PUN/2021) िनधाᭅरण वषᭅ / Assessment Year: 2014-15 Punit Balan, L/H of S. Balan, 605, Sai Chambers, Pune – Mumbai Road, Wakdewadi, Pune- 411003. PAN : AALPC5158J Vs. ACIT, Central Circle- 1(1), Pune. Appellant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the Revenue directed against the order of ld. Commissioner of Income Tax (Appeals)- 11, Pune [‘the Revenue by : Shri Ramnath P. Murkunde Assessee by : Shri M. R. Bhagwat Date of hearing : 03.01.2023 Date of pronouncement : 04.01.2023 ITA No.109/PUN/2021 C.O. No.51/PUN/2022 2 CIT(A)’] dated 20.01.2021 for the assessment year 2014-15. The Cross Objection filed by the assessee against the appeal of the Revenue. 2. Briefly, the facts of the case are that the assessee is an individual engaged in the business of investments. The Return of Income for the assessment year 2014-15 was filed on 15.09.2014 declaring total income of Rs.3,86,63,302/- and the same was revised on 11.02.2016 at total income of Rs.3,95,96,507/-. Against the said return of income, the assessment was completed by the Asstt. Commissioner of Income Tax, Central Circle-1(1), Pune (‘the Assessing Officer’) vide order dated 31.12.2019 passed u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (‘the Act’) at a total income of Rs.9,20,96,507/-. Subsequently, the assessment was reopened by issuing of notice u/s 148 on 31.03.2019. In response to the said notice, the assessee had filed return of income on 30.04.2019 declaring income of Rs.1,53,97,840/-. Subsequently, the assessment was completed by the Assessing Officer by making addition of Rs.1,72,42,788/- by assessing deemed annual value of the flats lying vacant purchased by the assessee. 3. Being aggrieved by the above order of assessment, an appeal was filed before the ld. CIT(A), who vide impugned order allowed ITA No.109/PUN/2021 C.O. No.51/PUN/2022 3 the ground of appeal relating to the allowability of interest u/s 24(b) of the Act. The relevant facts were set out by the ld. CIT(A) in para 12 of his order. 4. Being aggrieved by the decision of the ld. CIT(A), the Revenue is in appeal before us in the present appeal. 5. It is contended by the ld. Sr. DR that when the interest was capitalized in books of account, the ld. CIT(A) ought not to have allowed the deduction u/s 24(b) of the Act. 6. On the other hand, ld. AR placing reliance on the order of the ld. CIT(A) submitted that the order of the ld. CIT(A) is just, proper and legal and requires no interference. 7. We heard the rival submissions and perused the material on record. The issue in the present appeal relates to allowability of interest u/s 24(b) of the Act. It is not in dispute that the borrowed funds had been utilized for the purpose of purchasing of flats and income from which was assessed to tax under the head “Income from house property”. The fact that the interest on the borrowings was capitalized in the books of account does not bar on assessee to claim deduction u/s 24(b) of the Act and treatment given in the books of account had no relevance in deciding the admissibility or otherwise of expenditure while computing the assessable income. ITA No.109/PUN/2021 C.O. No.51/PUN/2022 4 Therefore, the order of the ld. CIT(A) is just, proper and legal and does not require any interference. 8. In the result, the appeal filed by the Revenue in ITA No.109/PUN/2021 stands dismissed. C. O. No.51/PUN/2022 : 9. Since the appeal filed by the Revenue is dismissed, the Cross Objection filed by the assessee becomes infructuous. Thus, the Cross Objection filed by the assessee stands dismissed. 10. To sum up, the appeal filed by the Revenue as well as Cross Objection filed by the assessee stands dismissed. Order pronounced on this 04 th day of January, 2023. Sd/- Sd/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 04 th January, 2023. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A)-11, Pune. 4. The Pr. CIT (Central), Pune. 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “A” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.