SMT RAMA BAJAJ, JAIPUR V. INCOME TAX OFFICER, WARD-4-2, JAIPUR

ITA 1156/JPR/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6097 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 27-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Ignorance of law
• Section: 143(3); 251; 13; 68; 56

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES A JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA- @ ITA NO. 1156/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2009-10 SMT. RAMA BAJAJ, 1/567, VIDHYADHAR NAGAR, JAIPUR CUKE VS. ITO, WARD-4(2), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AEEPB6564L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SH. ROHAN SOGANI (CA) JKTLO DH VKSJ LS @ REVENUE BY : SMT. MONISHA CHOUDHARY (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 09/09/2021 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 14/09/2021 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT (A)-2, JAIPUR DATED 25.07.2019 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD. AO , IN DISALLOWING THE INTEREST CLAIMED UNDER SECTION 24(B) OF THE INC OME TAX ACT, 1961, AMOUNTING TO RS. 3,56,678/-. THE ACTION OF LD . CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FAC TS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY ALLOWING THE DEDUCTION OF INTEREST UNDER SECTION 24(B), AS CLAIMED. ITA NO. 1156/JP/2019 SMT. RAMA BAJAJ, JAIPUR VS. ITO, JAIPUR 2 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD. AO , IN NOT ALLOWING DEDUCTION OF BALANCE INTEREST ON HOUSING LOAN, AGAI NST INCOME FROM OTHER SOURCES. THE ACTION OF LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEAS E BE GRANTED BY ALLOWING THE DEDUCTION OF BALANCE INTEREST PAID ON HOUSING LOAN, AGAINST INTEREST INCOME OFFERED FOR TAX UNDER INCOM E FROM OTHER SOURCES. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD. AO , IN MAKING ADDITION OF RS. 40,000/- UNDER SECTION 68 OF THE IN COME TAX ACT, 1961. THE ACTION OF LD. CIT(A) IS ILLEGAL, UNJUSTIF IED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID ADDITION, MADE BY LD. AO AND SUST AINED BY LD. CIT(A). 2. REGARDING GROUND NO. 1, THE LD. SUBMITTED THAT THE ASSESSEE HAS INCURRED INTEREST EXPENSES OF RS. 5,06,678/-. HOWEV ER, IN THE RETURN OF INCOME, THE ASSESSEE HAS CLAIMED ONLY A SUM OF RS. 3,48,888/- U/S 24(B) OF THE ACT AND THE BALANCE INTEREST PERTAINING TO T HE CONSTRUCTION PERIOD WAS INADVERTENTLY NOT CLAIMED IN THE RETURN OF INCO ME AMOUNTING TO RS. 1,57,790/-. IT WAS SUBMITTED THAT THE REVISED CLAIM WAS MADE BEFORE THE LD. CIT(A) AMOUNTING TO RS. 5,06,678/-. HOWEVER , THE LD. CIT(A) AMOUNTING TO RS. 5,06,678/-. HOWEVER, THE LD. CIT(A ) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER IN ALLOWING INTERES T OF RS. 1.5 LAKH ONLY FOR THE REASON THAT THE HOUSING LOAN WAS NOT FULLY UTIL IZED FOR PURPOSE OF CONSTRUCTION OF THE HOUSE. IT WAS SUBMITTED THAT IN TEREST ON A PART OF THE LOAN WHICH WAS UTILIZED FOR LENDING, THE ASSESSEE E ARNED INTEREST INCOME OF RS. 2,89,004/- AND AGAINST THAT THE ASSESSEE HAS CL AIMED INTEREST EXPENSE ITA NO. 1156/JP/2019 SMT. RAMA BAJAJ, JAIPUR VS. ITO, JAIPUR 3 OF RS. 2,74,705/-. IT WAS SUBMITTED THAT THE LD. CI T(A) HAS NOT CONSIDERED THE SAME AND HAS MERELY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. IT WAS ACCORDINGLY SUBMITTED THAT TO THE EXTENT OF LOA N UTILIZED FOR CONSTRUCTION OF THE HOUSE, THE ASSESSEE BE ALLOWED A DEDUCTION TOWARDS INTEREST AMOUNTING TO RS. 2,31,973/- AND AS REGARDS THE AMOUNT OF LOAN UTILIZED TOWARDS ONWARD LENDING IN RESPECT OF WHICH INTEREST INCOME HAS ALREADY BEEN OFFERED TO TAX, THE INTEREST EXPENSE O F RS. 2,74,705/- SHOULD BE ALLOWED. 3. IN THIS REGARD, THE ASSESSEE FURTHER RELIED ON THE WRITTEN SUBMISSIONS MADE BEFORE THE LD. CIT(A) WHICH IS REP RODUCED AS UNDER:- 2.1 DURING THE YEAR THE APPELLANT HAD PAID INTEREST OF RS.5,06,678/- TO ICICI BANK AGAINST THE HOUSING LOAN TAKEN FOR THE P URPOSE OF CONSTRUCTION OF SECOND FLOOR. THE CONSTRUCTION OF THE SECOND FLO OR WAS COMPLETED DURING THE RELEVANT ASSESSMENT YEAR. THESE FACTS ARE UNDIS PUTED. OUT OF TOTAL INTEREST OF RS. 5,06,678/-, LD. AO ALLOWED CLAIM OF RS. 1,50,000/- ONLY RESULTING INTO A DISALLOWANCE OF RS. 3,56,678/-. 2.2 OUT OF THE TOTAL INTEREST OF RS. 5,06,678/-, INTER EST OF RS. 1,57,790/- PERTAINED TO CONSTRUCTION PERIOD. DUE TO IGNORANCE OF LAW, THE APPELLANT HAD CLAIMED ONLY THE BALANCE INTEREST OF RS. 3,48,8 88/- (5,06,678 - 1,57,790) U/S 24(B) DURING THE YEAR. 2.3 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE C LAIM OF THE ASSESSEE STOOD REVISED AS UNDER: S. NO. PARTICULARS AMOUNT (IN RS.) 1. INTEREST TO BE ALLOWED UNDER INCOME FROM OTHER SOURCES 2,74,705/- ITA NO. 1156/JP/2019 SMT. RAMA BAJAJ, JAIPUR VS. ITO, JAIPUR 4 2.4 THE LD. AO ALLEGED THAT AS PER BALANCE SHEET SU BMITTED BY APPELLANT, AGAINST THE OUTSTANDING HOUSING LOAN OF RS. 44,12,9 66/-, INVESTMENT IN PROPERTY HAS BEEN SHOWN AT RS. 20,12,207/-. THEREFO RE, THE HOUSING LOAN WAS NOT FULLY UTILIZED FOR HOUSING PURPOSE AND ACCO RDINGLY, THE LD. AO ALLOWED THE INTEREST OF RS. 1,50,000/- AGAINST THE SELF OCCUPIED PROPERTY AND DISALLOWED THE DEDUCTION OF RS. 1,98,888/- (3 ,48,888 -1,50,000). 2.5 DURING THE ASSESSMENT PROCEEDINGS, IT WAS EXPLA INED VIDE LETTER DATED 5 TH DECEMBER, 2011 THAT A PART OF THE HOUSING LOAN HAS BEEN USED FOR GIVING ADVANCES TO OTHER PARTIES. THE LD. AO HI MSELF ACCEPTED THE FACT THAT THE HOUSING LOAN WAS NOT FULLY UTILIZED FOR TH E PURPOSE OF CONSTRUCTION OF THE HOUSE. HOWEVER, HE FAILED IN APPRECIATING TH E FACT THAT INTEREST ON THAT PART OF THE LOAN WHICH HAS BEEN USED FOR LENDI NG AND EARNING INTEREST IS ALLOWABLE UNDER SECTION 56 OF THE INCOME TAX ACT , 1961. 2.6 INTEREST PERTAINING TO THAT PORTION OF LOAN WHICH I S UTILIZED FOR THE PURPOSE OF CONSTRUCTION OF THE HOUSE IS ALLOWABLE U NDER SECTION 24(B) AND THE REMAINING INTEREST IS ALLOWABLE UNDER SECTION 5 6. BASED ON ACTUAL UTILIZATION OF HOUSING LOAN MENTIONED AS ABOVE THE INTEREST OF RS. 5,06,678/- WOULD BE ALLOWABLE AS DETAILED IN PARA 2 .3 ABOVE AND SO CLAIMED DURING ASSESSMENT PROCEEDINGS. 2. BALANCE INTEREST TO BE ALLOWED UNDER INCOME FROM HOUSE PROPERTY A) RENTED HOUSE PROPERTY- 81,973/- B) SOP HOUSE PROPERTY 1,50,000/- TOTAL 5,06,678/- ITA NO. 1156/JP/2019 SMT. RAMA BAJAJ, JAIPUR VS. ITO, JAIPUR 5 2.7 DEDUCTION U/S 24(B) 2.7.1 IT IS HUMBLY SUBMITTED THAT AS PER EXPLANATIO N TO SECTION 24(B) INTEREST PAYABLE ON CAPITAL BORROWED FOR THE PERIOD PRIOR TO THE PREVIOUS YEAR IN WHICH THE PROPERTY HAS BEEN ACQUIRED OR CON STRUCTED, SHALL BE DEDUCTABLE U/S 24(B) IN EQUAL INSTALLMENTS FOR THE SAID PREVIOUS YEAR AND FOR EACH OF THE FOUR IMMEDIATELY SUCCEEDING PREVIOU S YEARS. IN THE PRESENT CASE, SINCE THE CONSTRUCTION OF THE PROPERTY WAS CO MPLETED DURING THE RELEVANT ASSESSMENT YEAR FULL INTEREST WOULD BE ALL OWABLE U/S 24(B) AND NO PART OF INTEREST WOULD BE DISALLOWABLE ON ACCOUNT O F BEING RELATED TO CONSTRUCTION PERIOD. 2.7.2 THE LD. AOS ALLEGATION THAT IN THE CERTIFIC ATE OF ICICI BANK, THERE IS SPECIFIC MENTION THAT PRE EMI INTEREST FROM APRIL, 2008 TO MARCH, 2009 IS ZERO IS IRRELEVANT BECAUSE EVEN IF THERE IS INTERES T FOR PRE CONSTRUCTION PERIOD, THE INTEREST IS FULLY ALLOWABLE IF CONSTRUC TION IS COMPLETED IN RELEVANT ASSESSMENT YEAR, IN VIEW OF EXPLANATION TO SECTION 24(B) AS EXPLAINED ABOVE. 2.7.3 THE OBSERVATION OF THE LD. AO THAT REGULAR EM I OF RS. 49,743/- IS BEING PAID FROM THE MONTH OF APRIL, 2008 ONWARDS CA N HAVE NO ADVERSE BEARING ON THE CLAIM OF THE ASSESSEE. 2.7.4 THE LD. AOS ALLEGATION THAT APPELLANT HAS S HOWN RENTAL INCOME OF RS. 36,000/- FOR THE WHOLE YEAR FOR ONE PORTION OF THE HOUSE PROPERTY IS ALSO IRRELEVANT BECAUSE AS MENTIONED EARLIER THE AP PELLANT HAS LET OUT A PORTION OF FIRST FLOOR WHEREAS THE CONSTRUCTION WAS DONE ON SECOND FLOOR. 2.7.5 THE CONSTRUCTION OF THE SECOND FLOOR WAS CO MPLETED DURING THE RELEVANT ASSESSMENT YEAR. DUE TO IGNORANCE OF LAW, THE ASSESSEE DID NOT CLAIM THE INTEREST WHICH PERTAINED TO THE CONSTRUCT ION PERIOD. THESE FACTS ITA NO. 1156/JP/2019 SMT. RAMA BAJAJ, JAIPUR VS. ITO, JAIPUR 6 WERE EVIDENT ON RECORD. EVEN IF THE APPELLANT MADE NO CLAIM OF THE BALANCE INTEREST OF RS. 1,57,790/-, THE LD. AO WAS BOUND TO GIVE RELIEF TO WHICH THE APPELLANT APPEARED TO BE CLEARLY ENTITLED BUT WHICH HE HAD OMITTED TO CLAIM THE SAME FOR SOME REASON. YOUR ATT ENTION IS INVITED TO THE CBDT CIRCULAR NO. 14 OF 11 APRIL 1955, WHICH STATES THAT: OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVANTAGE OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS. IT IS ONE OF THEIR DU TIES TO ASSIST A TAXPAYER IN EVERY REASONABLE WAY, PARTICULARLY IN T HE MATTER OF CLAIMING AND SECURING RELIEFS AND IN THIS REGARD TH E OFFICERS SHOULD TAKE THE INITIATIVE IN GUIDING A TAXPAYER WHERE PRO CEEDINGS OR OTHER PARTICULARS BEFORE THEM INDICATE THAT SOME REFUND O R RELIEF IS DUE TO HIM. THIS ATTITUDE WOULD, IN THE LONG RUN, BENEFIT THE DEPARTMENT FOR IT WOULD INSPIRE CONFIDENCE IN HIM THAT HE MAY BE SURE OF GETTING A SQUARE DEAL FROM THE DEPARTMENT. ALTHOUGH, THEREFOR E, THE RESPONSIBILITY FOR CLAIMING REFUNDS AND RELIEFS RES TS WITH ASSESSEES ON WHOM IT IS IMPOSED BY LAW, OFFICERS SHOULD:- (A) DRAW THEIR ATTENTION TO ANY REFUNDS OR RELIEFS TO WHICH THEY APPEAR TO BE CLEARLY ENTITLED BUT WHICH THEY HAVE O MITTED TO CLAIM FOR SOME REASON OR OTHER; (B) FREELY ADVISE THEM WHEN APPROACHED BY THEM AS T O THEIR RIGHTS AND LIABILITIES AND AS TO THE PROCEDURE TO BE ADOPT ED FOR CLAIMING REFUNDS AND RELIEFS; (C) PUBLIC RELATION OFFICERS HAVE BEEN APPOINTED AT IMPORTANT CENTERS, BUT BY THE VERY NATURE OF THEIR DUTIES, THEIR FIELD OF ACTIVITY IS BOUND TO BE LIMITED . 2.7.6 THE VERY PURPOSE OF ASSESSMENT PROCEEDING S U/S 143(3) OF THE ACT IS TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE IN ACCORDANCE WITH LAW.. IT WAS THEREFORE AGAINST ALL CANNONS OF LAW F OR THE LD. A.O. TO NOT ITA NO. 1156/JP/2019 SMT. RAMA BAJAJ, JAIPUR VS. ITO, JAIPUR 7 ALLOW RELIEFS TO WHICH APPELLANT WAS CLEARLY ENTITL ED BUT WHICH SHE HAD OMITTED TO CLAIM ON ACCOUNT OF BONAFIDE ERROR. THE AO, UNDER THE LAW, IS DUTY BOUND TO PASS THE ASSESSMENT ORDER IN ACCORDAN CE WITH THE PROVISIONS OF LAW. 2.7.7 WE PLACE RELIANCE ON THE JUDGMENT OF THE J URISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX V. RAJAST HAN FASTENERS (P) LTD. (2014) 266 CTR (RAJ) 401 WHEREIN IT WAS HELD A S UNDER: THE PURPOSE OF ASSESSMENT PROCEEDINGS BEFORE THE T AXING AUTHORITIES WAS TO ASSESS THE INCOME CORRECTLY AND THE TAX LIAB ILITY OF AN ASSESSEE IN ACCORDANCE WITH LAW. 2.8 DEDUCTION U/S 56 2.8.1 IT IS HUMBLY SUBMITTED THAT THE APPELLANT HA S TAKEN HOUSING LOAN OF RS. 45,00,000/- IN THE MONTH OF MARCH, 2008, WHICH WAS UTILIZED AS UNDER: S. NO. PARTICULAR NATURE AMOUNT DATE 1. PINKCITY LANDBASE (P) LTD. ADVANCE 4,50,000/- 17/03/2008 2. SHREE SHYAM LANDBASE (P) LTD. ADVANCE 20,00,000/- 17/03/2008 3. REPAYMENT OF LOAN TO IDBI TAKEN FOR CONSTRUCTION OF GROUND FLOOR AND 1 ST FLOOR REPAYMENT 15,34,481/- 06/03/2008 4. CONSTRUCTION EXPENSES SECOND FLOOR EXPENSES 1,97,028/- F.Y. 2007-08 1,33,486/- F.Y. 2008-09 5. INTEREST & OTHER EXPENSES EXPENSES 1,85,005/- F.Y. 2007-08 TOTAL 45,00,000/- ABOVE FACTS WERE BEFORE LD. AO VIDE LETTER DATED 5 TH DECEMBER, 2011. ITA NO. 1156/JP/2019 SMT. RAMA BAJAJ, JAIPUR VS. ITO, JAIPUR 8 2.8.2 AS MAY BE OBSERVED FROM ABOVE, THE HOUSING LOAN WAS ALSO UTILIZED TO GIVE ADVANCE TO PINKCITY LANDBASE (P) LTD AND SH REE SHYAM LANDBASE (P) LTD, AGAINST WHICH THE APPELLANT WAS EARNING IN TEREST INCOME. THE ADVANCES GIVEN TO PINKCITY LANDBASE (P) LTD. AND SH REE SHYAM LANDBASE (P) LTD. ON 17TH MARCH, 2008 WERE RETURNED BACK AND WERE AGAIN GIVEN AS ADVANCE FOR EARNING INTEREST INCOME AS UNDER:- AMOUNT RECEIVED AMOUNT PAID DATE NAME OF PARTY AMOUNT DATE NAME OF PARTY AMOUN T 8/09/2008 PCLBPL 450000 8/09/2008 SSLBPL 2000000 09/09/2008 RSBPL 2375000 TOTAL 2450000 TOTAL 2375000 21/11/2008 RSBPL 2375000 22/11/2008 RSBPL 320000 22/11/2008 SCLMTPL 2055000 TOTAL 2375000 TOTAL 2375000 COPY OF BANK STATEMENT EVIDENCING THE ABOVE UTILIZA TION IN THE FINANCIAL YEAR 2008-09 IS PLACED ON RECORD. 2.9 VARIATION AND INCREASE IN CLAIM CAN BE MADE FOR THE FIRST TIME BEFORE CIT(A) 2.9.1 IT IS SUBMITTED THAT THE DETAILS OF THE UTILI ZATION OF THE HOUSING LOAN WERE ALREADY ON RECORD BEFORE THE LD. AO. 2.9.2 ALTHOUGH DURING THE ASSESSMENT PROCEEDINGS, THROUGH WRITTEN SUBMISSIONS, CLAIM OF INTEREST WAS VARIED AND INCRE ASED, YET, ALTERNATIVELY WITHOUT PREJUDICE TO ABOVE, THE VARIATION / INCREAS E IN CLAIM CAN BE MADE FOR THE FIRST TIME BEFORE THE CIT(A). 2.9.3 THE TOTAL CLAIM OF INTEREST STANDS AT RS. 5 ,06,678/- AND THE SAME IS CLAIMED UNDER DIFFERENT SECTIONS AS FOLLOWS: ITA NO. 1156/JP/2019 SMT. RAMA BAJAJ, JAIPUR VS. ITO, JAIPUR 9 S. NO. PARTICULARS AMOUNT (IN RS.) 1. INTEREST TO BE ALLOWED UNDER INCOME FROM OTHER SOURCES 2,74,705/- 2. BALANCE INTEREST TO BE ALLOWED UNDER INCOME FROM HOUSE PROPERTY A) RENTED HOUSE PROPERTY- 81,973/- B) SOP HOUSE PROPERTY- 1,50,000/- TOTAL 5,06,678/- 2.9.4 FIRST APPEAL IS AN EXTENSION OF ASSESSMENT PROCEEDINGS. THE POWERS OF CIT(A) ARE CO-TERMINUS WITH THAT OF AO. I N THIS VIEW OF THE SCHEME OF THE LAW EVEN VERIFICATION OF FACTS AT CIT (A) LEVEL SHOULD NOT OBSTRUCT ADMISSION OF ADDITIONAL CLAIM. WHEN CIT(A) IS EMPOWERED, ON FURTHER VERIFICATION OF FACTS, FOR ENHANCEMENT OF I NCOME THEN THERE IS NO REASON THAT SAME POWERS ARE NOT UTILIZED FOR ADMITT ING ADDITIONAL CLAIM. ITAT IS NOT THE EXTENSION OF ASSESSMENT PROCEEDINGS AND THEREFORE ANY ADDITIONAL CLAIM BEFORE ITAT MAY NOT BE ACCEPTABLE IF THE SAME REQUIRES VERIFICATION OF FACTS. 2.9.5 SINCE THE ENTIRE ASSESSMENT IS OPEN BEFORE THE CIT(A), THERE IS NO REASON FOR HIS NOT ENTERTAINING THE CLAIM, OR DIREC TING THE AO TO ALLOW APPROPRIATE RELIEF, ON FACTS BEING SUBMITTED TO CIT (A) EVEN IF NOT ON RECORD. 2.9.6 THE HONBLE SUPREME COURT IN JUTE CORPORATIO N OF INDIA LTD. VS. CIT (1991) 187 ITR 688 (SC) HAS DEALT WITH THIS ISS UE OF ADMISSION OF ADDITIONAL GROUND BY FIRST APPELLATE AUTHORITY. THE HONBLE SUPREME COURT AT PARA 3 HAS ANALYSED THE POWERS OF FIRST APPELLAT E AUTHORITY CONTAINED IN SECTION 251 OF THE ACT AND HAS OBSERVED THAT- ITA NO. 1156/JP/2019 SMT. RAMA BAJAJ, JAIPUR VS. ITO, JAIPUR 10 THE ACT DOES NOT CONTAIN ANY EXPRESS PROVISION DEB ARRING AN ASSESSEE FROM RAISING AN ADDITIONAL GROUND IN APPEA L AND THERE IS NO PROVISION IN THE ACT PLACING RESTRICTION ON THE POW ER OF THE APPELLATE AUTHORITY IN ENTERTAINING AN ADDITIONAL GROUND IN A PPEAL. IN THE ABSENCE OF ANY STATUTORY PROVISION, GENERAL PRINCIP LE RELATING TO THE AMPLITUDE OF APPELLATE AUTHORITY'S POWER BEING CO-T ERMINUS WITH THAT OF THE INITIAL AUTHORITY SHOULD NORMALLY BE APPLICA BLE. 2.9.7 THE HONBLE SUPREME COURT IN THE ABOVE CASE HAS CONSIDERED THE JUDGEMENT OF CIT VS. KANPUR COAL SYNDICATE (1964) 5 3 ITR 225 (SC) AND HAS REPRODUCED THE OBSERVATIONS OF THE HONBLE SUPR EME COURT IN THE SAID CASE IN PARA 5 OF JUTE CORPORATION OF INDIA LTD. VS . CIT (SUPRA) ORDER- ' IF AN APPEAL, LIES, SECTION 31 OF THE ACT DESCRIBES THE POWERS OF THE AAC IN SUCH AN APPEAL. UNDER SECTION 31(3)(A) IN DI SPOSING OF SUCH AN APPEAL THE APPELLATE ASSISTANT COMMISSIONER MAY, IN THE CASE OF AN ORDER OF ASSESSMENT, CONFIRM, REDUCE, ENHANCE OR AN NUL THE ASSESSMENT; UNDER CLAUSE (B) THEREOF HE MAY SET ASI DE THE ASSESSMENT AND DIRECT THE INCOME TAX OFFICER TO MAK E A FRESH ASSESSMENT. THE APPELLATE ASSISTANT COMMISSIONER HA S, THEREFORE, PLENARY POWERS IN DISPOSING OF AN APPEAL. THE SCOPE OF HIS POWER IS CONTERMINOUS WITH THAT OF THE INCOME TAX OFFICER. H E CAN DO WHAT THE INCOME TAX OFFICER CAN DO AND ALSO DIRECT HIM T O DO WHAT HE HAS FAILED TO DO . ' THE DECLARATION OF LAW IS CLEAR THAT THE POWER OF THE AAC IS CO- TERMINUS WITH THAT OF THE ITO, AND IF THAT IS SO, THERE APPEARS TO BE NO REASON AS TO WHY THE APPELLATE AUTHORITY CANNOT MODIFY THE ASSESSMENT ORDER ON AN ADDITIONAL GROUND EVEN IF NO T RAISED BEFORE THE ITO. NO EXCEPTION COULD BE TAKEN TO THIS VIEW A S THE ACT DOES NOT ITA NO. 1156/JP/2019 SMT. RAMA BAJAJ, JAIPUR VS. ITO, JAIPUR 11 PLACE ANY RESTRICTION OR LIMITATION ON THE EXERCISE OF APPELLATE POWER. EVEN OTHERWISE, AN APPELLATE AUTHORITY WHILE HEARIN G APPEAL AGAINST THE ORDER OF A SUBORDINATE AUTHORITY, HAS ALL THE P OWERS WHICH THE ORIGINAL AUTHORITY MAY HAVE IN DECIDING THE QUESTIO N BEFORE IT SUBJECT TO THE RESTRICTIONS OR LIMITATIONS, IF ANY, PRESCRI BED BY THE STATUTORY PROVISIONS. IN THE ABSENCE OF ANY STATUTORY PROVISI ON, THE APPELLATE AUTHORITY IS VESTED WITH ALL THE PLENARY POWERS WHI CH THE SUBORDINATE AUTHORITY MAY HAVE IN THE MATTER. THERE APPEARS TO BE NO GOOD REASON AND NONE WAS PLACED BEFORE US TO JUSTIFY CUR TAILMENT OF THE POWER OF THE AAC IN ENTERTAINING AN ADDITIONAL GROU ND RAISED BY THE ASSESSEE IN SEEKING MODIFICATION OF THE ORDER OF AS SESSMENT PASSED BY THE ITO. 2.9.8 IN VIEW OF THE JUTE CORPORATION OF INDIA L TD. VS. CIT (SUPRA) DECISION OF THE HONBLE APEX COURT, THE FIRST APPEL LATE AUTHORITY IS DUTY BOUND TO ACCEPT ADDITIONAL CLAIM IF THE TWIN CONDIT IONS CONTAINED IN SECTION 250(5) ARE SATISFIED WHETHER OR NOT THE FACTS ARE A LREADY ON RECORD. THUS, THERE IS A DIFFERENCE IN THIS REGARD WHEN AN ADDITIONAL GROUND/CLAIM IS TAKEN BEFORE ITAT AND WHEN IT IS TAKEN BEFORE CI T(A). 2.9.9 EVEN IN NATIONAL THERMAL POWER COMPANY LTD. VS CIT 1998 229 ITR 383 SC, THE HONBLE SUPREME COURT IN PARA 3 HAS OBSERVED AS UNDER: UNDER SECTION 254 OF THE IT ACT, THE APPELLATE TRIB UNAL MAY, AFTER GIVING BOTH THE PARTIES TO THE APPEAL AN OPPORTUNIT Y OF BEING HEARD, PASS SUCH ORDERS THEREON AS IT THINKS FIT. THE POWE R OF THE TRIBUNAL IN DEALING WITH APPEALS IS THUS EXPRESSED IN THE WI DEST POSSIBLE TERMS. THE PURPOSE OF THE ASSESSMENT PROCEEDINGS BE FORE THE TAXING AUTHORITIES IS TO ASSESS CORRECTLY THE TAX L IABILITY OF AN ASSESSEE IN ACCORDANCE WITH LAW ITA NO. 1156/JP/2019 SMT. RAMA BAJAJ, JAIPUR VS. ITO, JAIPUR 12 2.9.10 WE ALSO PLACE RELIANCE ON THE RECENT JUDGM ENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF COMMISSIONER OF I NCOME TAX V. MITESH IMPEX DATED 02-04-2014. COPY OF THE ORDER IS ENCLOS ED. 2.9.11 WE ALSO PLACE RELIANCE ON THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX V. RAJASTHAN FASTENERS (P) LTD. (2014) 266 CTR (RAJ) 401 WHEREIN IT WAS HE LD AS UNDER: POWER OF CIT(A) WAS CO TERMINUS WITH THAT OF THE IT O AND THE APPELLATE AUTHORITY COULD MODIFY THE ASSESSMENT ORD ER ON AN ADDITIONAL GROUND EVEN IF NOT RAISED BEFORE THE ITO ; CIT(A) WAS THEREFORE JUSTIFIED IN ACCEPTING ASSESSEES CLAIM F OR EXEMPTION UNDER SECTION 10B. IN VIEW OF THE ABOVE SUBMISSIONS, ENTIRE INTEREST E XPENSE OF RS. 5,06,678/- MAY PLEASE BE ALLOWED UNDER INCOME FROM HOUSE PROPERTY AS WELL UNDER INCOME FROM OTHER SOURCES AS ABOVE. 4. REGARDING GROUND NO. 3, THE LD. AR SUBMITTED THAT D URING THE YEAR, THE APPELLANT HAD DEPOSITED CASH OF RS. 40,000/- IN BANK ON 5 TH JULY, 2008. THE LD. AO ADDED THE SAME ON ACCOUNT OF UNEXPLAINED CASH CREDITS ON THE ALLEGATION THAT SOURCE OF THE SAME IS NOT VERIFIABL E AS NO CASH BOOK/CASH FLOW STATEMENT WAS SUBMITTED BY THE APPELLANT. 5. IT WAS SUBMITTED THAT THE APPELLANT IS PREPARING BO OKS OF ACCOUNT. THE CASH HAD BEEN DEPOSITED BY APPELLANT OUT OF CAS H WITHDRAWALS FROM BANK AND CASH IN HAND AS UNDER: PARTICULARS AMOUNT (IN RS.) OPENING BALANCE 27,076/- ADD:- CASH WITHDRAWALS FROM BANK ON 15-4-2008 1,00, 000/- ADD:- RENT FROM HOUSE PROPERTY RECEIVED IN CASH FOR 9,000/- ITA NO. 1156/JP/2019 SMT. RAMA BAJAJ, JAIPUR VS. ITO, JAIPUR 13 THREE MONTHS (3000*3) 1,36,076/- LESS:- HOUSEHOLD DRAWINGS FOR THREE MONTHS @ RS. 10,000/- PER MONTH 30,000/- LESS:- CONSTRUCTION EXPENSES UPTO 5-7-2008 31,190/- TOTAL CASH AVAILABLE AS ON 5-7-2008 74,886/- CASH DEPOSITED IN BANK (ADDED BY LD. AO) 40,000/- COPY OF CASH BOOK OF THE FINANCIAL YEAR 2008-09 IS PLACED ON RECORD. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE SOURCE OF CASH DEPOSITED WAS EXPLAINED TO BE OUT OF CASH IN HAND. THE CASH BOOK IS A FURTHER EVIDENCE TO SUBSTANTIATE WHAT WAS EXPLAINED TO THE LD. AO. IN VIEW OF THE ABOVE, THE ADDITION OF RS. 40,000/- ON ACCOU NT OF UNEXPLAINED CASH CREDIT MAY PLEASE BE DELETED. 6. PER CONTRA, THE LD. DR RELIED ON THE FINDINGS OF THE LOWER AUTHORITIES AND IT WAS SUBMITTED THAT THE HOUSING LOAN WAS NOT FULLY UTILIZED FOR HOUSING PURPOSES AND THE AO RIGHTLY ALLOWED THE INT EREST TO THE EXTENT OF RS 1,50,000/- AGAINST SELF-OCCUPIED PROPERTY AND WH ICH WAS RIGHTLY SUSTAINED BY THE LD CIT(A) WITHOUT ALLOWING ANY FUR THER RELIEF TO THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THE ASSESS EE HAS NOT BEEN ABLE TO ESTABLISH FROM WHERE CASH WHICH WAS SUBSEQUENTLY DE POSITED IN THE BANK ACCOUNT WAS INITIALLY GENERATED. IT WAS ACCORDINGLY SUBMITTED THAT THE ADDITION OF RS 40,000/- WAS RIGHTLY CONFIRMED BY TH E LD. CIT(A) AND THE APPEAL OF THE ASSESSEE BE DISMISSED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PURSUED THE MATERIAL AVAILABLE ON RECORD. THE FACTS WHICH ARE EMERGING FROM RECORDS ARE THAT THE ASSESSEE HAS TAKEN HOUSING LOAN FROM ICICI BANK OF RS 45,00,000/-, A ITA NO. 1156/JP/2019 SMT. RAMA BAJAJ, JAIPUR VS. ITO, JAIPUR 14 PART OF THE SAID LOAN WAS UTILIZED TOWARDS CONSTRUC TION OF SECOND FLOOR OF THE HOUSE PROPERTY AND RELATED EXPENSES AS WELL AS REPAYMENT OF EARLIER LOAN TAKEN FROM IDBI BANK FOR CONSTRUCTION OF GROUN D AND FIRST FLOOR. IT IS ALSO AN ADMITTED FACT THAT A PART OF THE PROPERTY W AS SELF-OCCUPIED AND A PART LET OUT IN RESPECT OF WHICH RENTAL INCOME HAS BEEN OFFERED TO TAX. IT IS ALSO AN ADMITTED FACT THAT A PART OF THE HOUSING LO AN WAS UTILIZED FOR ADVANCING TO CERTAIN PARTIES FROM WHOM THE ASSESSEE HAS SHOWN INTEREST RECEIPTS IN HER RETURN OF INCOME. THEREFORE, THE F ACT THAT THE LOAN WAS TAKEN AND UTILIZED FOR THE PURPOSES OF CONSTRUCTION OF HOUSE PROPERTY AND FOR ADVANCING TO CERTAIN PARTIES AND ON SUCH BORROW ING, THE ASSESSEE HAS INCURRED AN INTEREST EXPENSE OF RS 5,06,678/- DURIN G THE FINANCIAL YEAR IS CLEARLY EMERGING FROM RECORDS. THEREFORE, THE INTE REST PERTAINING TO THE QUANTUM OF LOAN UTILISED FOR CONSTRUCTION OF HOUSE PROPERTY AMOUNTING TO RS 2,31,973/- SHALL BE ELIGIBLE FOR DEDUCTION AGAIN ST THE INCOME SHOWN UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND THE REMAINING INTEREST OF RS 2,74,705/- PERTAINING TO THE QUANTUM OF LOAN UTILISED FOR ADVANCING TO CERTAIN PARTIES SHALL BE ELIGIBLE FOR DEDUCTION AGAINST THE INTEREST INCOME OF RS 2,89,004/- SHOWN UNDER THE HEAD INCOME FROM OTHER SOURCES. 8. REGARDING ADDITION OF RS 40,000/- TOWARDS UNEXP LAINED CASH DEPOSIT IN THE BANK ACCOUNT, ON PERUSAL OF CASH FLOW STATEMENT , IT IS NOTED THAT THE ASSESSEE WAS HAVING CASH OF RS 74,886/- IN HER HAND S WHICH REASONABLY EXPLAIN THE SOURCE OF CASH DEPOSIT OF RS 40,000/- I N HER BANK ACCOUNT. THE ADDITION SO MADE IS HEREBY DIRECTED TO BE DELETED. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO. 1156/JP/2019 SMT. RAMA BAJAJ, JAIPUR VS. ITO, JAIPUR 15 ORDER PRONOUNCED IN THE OPEN COURT ON 14/09/2021. SD/- SD/- LANHI XKSLKBZ FOE FLAG ;KNO ( SANDEEP GOSAIN ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 14/09/2021 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. RAMA BAJAJ, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD-4(2), JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1156/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR