P.Kayambu Ammal, Tiruvarur V. ITO, Nagapattinam

ITA 1083/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96169 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 11-09-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 08-05-2015
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: K SOUNDARARAJAN
• Keywords: Unexplained cash credit; Revised return
• Section: 143(3); 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL S M C BENCH : CHENNAI . , [ BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.1083/MDS/2015 / ASSESSMENT YEAR : 2010-11 SMT. P. KAYAMBU AMMAL KEELATHIRUPPALAKUDI VILLAGE & POST MANARGUDI TK. 614 028 THIRUVARUR DISTRICT VS. THE INCOME TAX OFFICER WARD I(2), NAGAPATTINAM NOW WARD I(2), THIRUVARUR [PAN AEEPK 7002 E] ( ! / APPELLANT) ( '# ! /RESPONDENT) / APPELLANT BY : SHRI K. SOUNDARARAJAN, ADVOCATE /RESPONDENT BY : SHRI A.B. KOLI, JCIT / DATE OF HEARING : 11 - 09 - 2015 ! / DATE OF PRONOUNCEMENT : 13 - 10 - 2015 $ / O R D E R THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), TIRUCHIRAPALL I, DATED 20.1.2015 IN I.T.A.NO.173/2013-14/CIT(A)/TRY, FOR THE ASSESSM ENT YEAR 2010- 11, PASSED U/S 143(3) R.W.S 147 AND 250 OF THE ACT 2. THERE IS A DELAY OF SIX DAYS IN FILING THE APPEAL B EFORE THE TRIBUNAL. THE ASSESSEE HAS FILED AN AFFIDAVIT ALON G WITH DOCTORS CERTIFICATE FOR CONDONATION OF THE DELAY. AFTER PE RUSING THE PRAYER OF THE ASSESSEE, I AM OF THE CONSIDERED VIEW THAT THE CAUSE OF DELAY IS ITA NO.1083/15 :- 2 -: GENUINE AND THEREFORE, THE DELAY IS CONDONED AND TH E APPEAL IS ADMITTED. 3. THE ASSESSEE HAS RAISED FIVE GROUNDS IN HER APPEAL, HOWEVER AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASS ESSEE DID NOT PRESS FOR GROUND NOS.(IV) & (V) AND THE REMAINING GROUN DS ARE EXTRACTED HEREIN BELOW FOR ADJUDICATION: (I) DISALLOWANCE OF INTEREST ON HOUSING LOA N FOR SELF- OCCUPIED PROPERTY ` 93,637/- (II) DIFFERENCE IN RECONCILIATION OF BANK PASSBOOK AND AMOUNT DISCLOSED IN BALANCE SHEET - ` 12,984/- (III) DISALLOWANCE OF STATUTORY DEDUCTION U/S 24(A) FOR REPAIRS IN RESPECT OF RENTAL INCOME FROM PROPERTY DISCLOSED UNDER INCOME FROM HOUSE PROPERTY ` 99,075/- 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL ENGAGED IN THE BUSINESS OF RUNNING LODGE AND RENTING OUT PROPERTIES. RETURN OF INCOME WAS FILED ON 21.12.201 0 DISCLOSING TOTAL INCOME AS ` 2,45,795/-. IN RESPONSE TO NOTICE ISSUED U/S 148 OF THE ACT, THE ASSESSEE FILED DETAILS OF INTEREST ON SEL F-OCCUPIED HOUSE PROPERTY WITH COPIES OF BANK IS HOUSING LOAN STATEM ENTS AS AGAINST THE CLAIM OF ` 1,50,000/-. THE ASSESSING OFFICER HAS ALLOWED INT EREST OF ` 56,363/- ONLY AND DISALLOWED THE REMAINING INTEREST OF ` 93,637/-. ITA NO.1083/15 :- 3 -: 5. FURTHER THE ASSESSING OFFICER ON PERUSAL OF THE BAL ANCE SHEET AND BANK HOUSING LOAN STATEMENT ADDED DIFFERENCE IN RECONCILIATION AS UNEXPLAINED CASH CREDIT OF ` 12,984/- TO THE RETURNED INCOME. 6. THE ASSESSEE WAS ALSO IN RECEIPT OF RENTAL INCOME OF ` 3,30,250/- FROM GROUND FLOOR SHOPS AND CLAIMED DEDU CTION FOR REPAIRS @ 30% - ` 99,075/-. THE ASSESSING OFFICER ON PRESUMPTION TH AT THE RENTED PROPERTY ADDRESS IS RELATED TO LODGE BUILDIN G AND EXPENSES ARE ALREADY CLAIMED IN THE PROFIT & LOSS ACCOUNT OF LOD GE, ON SUSPICION, DENIED THE CLAIM OF ` 99,075/-. FINALLY ASSESSMENT WAS COMPLETED ON 28.3.2013 VIDE ORDER PASSED U/S 143(3) R.W.S 147 OF THE ACT. 7. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, TH E ASSESSEE FILED APPEAL BEFORE THE LD.CIT(A). THE LD . CIT(A) CONFIRMED THE ADDITION OF INTEREST ON HOUSING LOAN, DIFFERENC E IN RECONCILIATION OF BANK BALANCE AND REPAIRS TO HOUSE PROPERTY AND UPHE LD THE ORDER OF THE ASSESSING OFFICER. 8. FURTHER AGGRIEVED BY THE ORDER OF THE LD.CIT(A), TH E ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL SUBMITTED INCOME AND EXPENDITURE ACCOUNT, RECEIPTS AND PAYMENTS ACCOUNT, AND THE BALANCE SHEET BEFORE THE TRIBUNAL AND DEMONSTRATED THAT THE TOTAL INTEREST ON LOAN FROM CITY UNION BAN K, MANNARGUDI, FOR CONSTRUCTION WAS ` 2,10,351/-, BUT AS PER THE PROVISIONS OF THE ACT, ` ITA NO.1083/15 :- 4 -: 1,50,000/- WAS CLAIMED IN THE REVISED RETURN AGAINS T WHICH THE ASSESSING OFFICER ALLOWED ` 56,363/- ONLY. THE ASSESSING OFFICER ALSO MADE AN ADDITION OF ` 12,984/- AS DIFFERENCE DUE TO RECONCILIATION OF BANK BALANCE AND ARGUED THAT INTEREST COMPONENT HAS TO BE CONSIDERED TO EQUAL THE BALANCES IN THE BOOKS OF AC COUNT. THE LD. COUNSEL ARGUED THAT THE ASSESSEE IS THE OWNER OF B UILDING AT NATESAN STREET, MANNARGUDI WHERE GROUND FLOOR WAS LET OUT T O OTHERS AND THE FIRST AND SECOND FLOOR WAS USED FOR BUSINESS OF RUN NING THE LODGE. ASSESSEE HAS DISCLOSED RENTAL INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND CLAIMED DEDUCTION FOR REPAIRS @ 30% OF RENTAL RECEIPTS U/S 24(A) OF THE ACT. THE ASSESSING OFFI CER PRESUMED THAT REPAIR EXPENDITURE IS CLAIMED IN THE INCOME AND EXP ENDITURE OF LODGE ACCOUNT AND DENIED THE STATUTORY CLAIM OF ` 99,075/-. CONSIDERING THE ABOVE SUBMISSIONS, PRAYED THAT THE ADDITIONS BE DEL ETED. 9. THE LD. DEPARTMENTAL REPRESENTATIVE HAS RELIED UPON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THE ORDE R OF ASSESSING OFFICER BE UPHELD. 10. AFTER HEARING THE RIVAL SUBMISSIONS OF BOTH THE COU NSELS, PERUSING THE MATERIAL PLACED ON RECORD, I AM OF TH E OPINION THAT THE ASSESSEE HAS AVAILED LOANS FOR CONSTRUCTION OF SELF -OCCUPIED PROPERTY WHICH IS NOT IN DISPUTE AND INTEREST ON LOAN WORKED OUT TO ` 2,10,351/-. ITA NO.1083/15 :- 5 -: THE ASSESSEE HAS RESTRICTED THE CLAIM OF INTEREST TO ` 1,50,000/-. AS PER THE PROVISIONS OF SEC. 24 OF THE ACT, INTEREST ON HOUSING LOAN IS DEDUCTIBLE ON ACCRUAL BASIS EVEN IF NO PAYMENT IS M ADE DURING THE SAID FINANCIAL YEAR AND THE ASSESSEE HAS RIGHTLY CLAIME D INTEREST OF ` 1,50,000/-. HENCE, ADDITION OF ` 93,637/- TOWARDS INTEREST IS HEREBY DIRECTED TO BE DELETED BY ASSESSING OFFICER. 11. IT IS APPARENT THAT DIFFERENCE OF ` 12,984/- IN BANK PASSBOOK AND BOOKS WAS DUE TO NON CONSIDERATION OF INTEREST DEBITED BY THE BANK. HENCE, THE ADDITION MADE BY THE LD. ASSESSING OFFICER IS NOT JUSTIFIED. THEREFORE, ADDITION OF ` 12,984/- IS DIRECTED TO BE DELETED. THE ASSESSEE HAS DISCLOSED INCOME FROM HOUSE PROPE RTY IN RESPECT OF A BUILDING WHERE THE GROUND FLOOR WAS LET OUT AND F IRST AND SECOND FLOOR WAS USED FOR RUNNING THE LODGE AND CLAIMED 30 % OF RENTAL RECEIPTS FOR REPAIRS WHICH IS ALLOWABLE U/S 24(A) OF THE ACT AND THERE IS NO DOUBLE DEDUCTION AS STATED BY THE ASSESSING OFFI CER THAT THE EXPENSES HAVE BEEN CLAIMED IN THE INCOME AND EXPEND ITURE ACCOUNT OF LODGE. ON PERUSAL, IT WAS FOUND THAT SUCH EXPENDIT URE IN LODGE ACCOUNT DOES NOT RELATE TO HOUSE PROPERTY INCOME. HENCE, THE ASSESSEE IS ENTITLED FOR DEDUCTION OF ` 99,075/-. THEREFORE, I DIRECT THE ASSESSING OFFICER TO ALLOW THE DEDUCTION. ITA NO.1083/15 :- 6 -: 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH OCTOBER, 2015, AT CHENNAI. SD/ - ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED: 13 TH OCTOBER, 2015 RD %& '()( / COPY TO: 1 . / APPELLANT 4. * / CIT 2. / RESPONDENT 5. (+, - / DR 3. *./ / CIT(A) 6. ,01 / GF