Milestone Realtors Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1175/DEL/2012

• Counselvise Citation: 117520114 RSA 2012
• Duration Of Justice: 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 20-09-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 07-03-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANOOP KUMA R SINGH
• Assessee Lawyers: MRS RANO JAIN CAS
• Keywords: Tax effect
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.1175/DEL/2012 1175/DEL/2012 1175/DEL/2012 1175/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2005 2005 2005 2005- -- -06 0606 06 M/S MILESTONE REALTORS M/S MILESTONE REALTORS M/S MILESTONE REALTORS M/S MILESTONE REALTORS PVT.LTD., PVT.LTD., PVT.LTD., PVT.LTD., 8 88 8- -- -B, RAJENDRA PARK, B, RAJENDRA PARK, B, RAJENDRA PARK, B, RAJENDRA PARK, PUSA RO PUSA RO PUSA RO PUSA ROAD, AD, AD, AD, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 060. 110 060. 110 060. 110 060. PAN : AADCM8707G. PAN : AADCM8707G. PAN : AADCM8707G. PAN : AADCM8707G. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -6(4), 6(4), 6(4), 6(4), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VED JAIN & MRS.RANO JAIN, CAS. RESPONDENT BY : SHRI ANOOP KUMAR SINGH, SR.DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(A)-IX, NEW DELHI DATED 9 TH DECEMBER, 2011 FOR THE AY 2005-06. 2. THE ONLY GROUND RAISED IN THIS APPEAL BY THE ASS ESSEE IS AGAINST THE LEVY OF PENALTY UNDER SECTION 271(1)(C) AMOUNTI NG TO ` 1,95,115/-. 3. AT THE TIME OF HEARING BEFORE US, IT IS STATED B Y THE LEARNED COUNSEL THAT THE ASSESSEE FILED THE RETURN DECLARIN G TOTAL INCOME OF ` 5,41,011/-. THE FINALLY ASSESSED INCOME AFTER THE ORDER OF CIT(A) WAS ` 10,74,220/-. ON THE DIFFERENCE OF ` 5,33,209/-, THE ASSESSING OFFICER LEVIED THE PENALTY UNDER SECTION 271(1)(C). HE POI NTED OUT THAT THE ABOVE DIFFERENCE HAD ARISEN BECAUSE OF THE FOLLOWIN G DISALLOWANCES WHILE COMPUTING THE INCOME FROM HOUSE PROPERTY:- ITA-1175/DEL/2012 2 (I) INTEREST : 3,92,925/- (II) HOUSE TAX 19,237 BROKERAGE 1,40,000 STAMP DUTY 33,600 : 1,34,986/- TOTAL : 5,27,911/- 4. IN ADDITION TO THE ABOVE, THE ASSESSING OFFICER ALSO DISALLOWED THE BUSINESS LOSS AMOUNTING TO ` 5,096/-. IT IS SUBMITTED BY THE LEARNED COUNSEL THAT INTEREST IS DULY ALLOWABLE WHILE COMPU TING THE INCOME FROM HOUSE PROPERTY AND IN THE COMPUTATION OF INCOM E FURNISHED BY THE ASSESSEE, THE SAME WAS CLAIMED SEPARATELY. THA T IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER ASSESSED TH E INCOME FROM HOUSE PROPERTY AT THE GROSS RENT RECEIVED. THAT IN THE APPEAL BEFORE THE LEARNED CIT(A), BY INADVERTENCE, THE GROUND REL ATING TO DISALLOWANCE OF INTEREST COULD NOT BE TAKEN AND THE CIT(A) DIRECTED THE ASSESSING OFFICER TO COMPUTE THE INCOME FROM HOUSE PROPERTY AFTER ALLOWING 30% DEDUCTION FOR REPAIRS. ACCORDINGLY, T HE CLAIM OF INTEREST COULD NOT BE CONSIDERED BY THE LEARNED CIT(A). THE REAFTER, THE ASSESSEE FILED APPLICATION UNDER SECTION 154 BUT TH E CIT(A) STATED THAT THERE IS NO APPARENT MISTAKE IN HIS ORDER. ACCORDI NGLY, THE ASSESSEES APPLICATION FOR RECTIFICATION WAS REJECTED. DUE TO SMALL TAX EFFECT, THE ASSESSEE DID NOT PURSUE THE MATTER IN FURTHER APPEA L. HE FURTHER SUBMITTED THAT INTEREST IS AN ALLOWABLE DEDUCTION W HILE COMPUTING THE INCOME FROM HOUSE PROPERTY. SUCH INTEREST REMAINED TO BE DISALLOWED BY OVERSIGHT OF THE ASSESSING OFFICER AND AGAIN BY THE MISTAKE OF THE ASSESSEES COUNSEL WHO PREPARED THE APPEAL. BUT, C LAIM OF INTEREST WHILE COMPUTING THE INCOME FROM HOUSE PROPERTY CANN OT BE SAID TO BE CONCEALMENT OF INCOME. WITH REGARD TO OTHER DEDUCT ION, THERE CAN BE TWO OPINIONS WHETHER THE DEDUCTION IS ALLOWABLE OR NOT. HOWEVER, THE ASSESSEE HAS DULY DISCLOSED ALL THE FACTS IN ITS CO MPUTATION OF INCOME AND, THEREFORE, MERELY BECAUSE THE DEDUCTION FOR BR OKERAGE AND STAMP ITA-1175/DEL/2012 3 DUTY WAS DISALLOWED, IT CANNOT BE SAID TO BE CONCEA LMENT OF INCOME. IN THIS REGARD, HE RELIED UPON THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT.LTD. 322 ITR 158 (SC) AND STATED THAT THE ASSESSEE HAS FURNISHED ALL THE PART ICULARS BEFORE THE ASSESSING OFFICER. THERE WAS NEITHER CONCEALMENT O F ANY FACT NOR FURNISHING OF ANY INACCURATE OR INCORRECT FACT. TH EREFORE, THE DECISION OF HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT.LTD. (SUPRA) WOULD BE SQUARELY APPLICABLE. 5. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDERS OF AUTHORITIES BELOW AND HE STATED THAT THE ASSESSEE I S A PRIVATE LIMITED COMPANY AND VERY WELL AWARE OF THE INCOME-TAX ACT. THAT SECTIONS 23 AND 24 FOR COMPUTATION OF INCOME FROM HOUSE PROPERT Y ARE VERY CLEAR AND THE DEDUCTION FOR BROKERAGE AND STAMP DUTY IS C ERTAINLY NOT ALLOWABLE. THE ASSESSEE TOOK CHANCE BY CLAIMING TH ESE DEDUCTIONS BECAUSE MOST OF THE CASES ARE ACCEPTED UNDER SECTIO N 143(1). AS SOON AS THE CASE WAS TAKEN UP FOR SCRUTINY AND ASSE SSING OFFICER ASKED THE ASSESSEE TO EXPLAIN HOW THESE DEDUCTIONS ARE AL LOWABLE, THE ASSESSEE FAIRLY ADMITTED FOR ITS DISALLOWANCE. THI S CLEARLY SHOWS THAT THE ASSESSEE WAS VERY WELL AWARE THAT THESE DEDUCTI ONS ARE NOT PERMISSIBLE WHILE COMPUTING THE INCOME FROM HOUSE P ROPERTY. THEREFORE, IN THE LIGHT OF THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX VS. ZOOM COMMUNICATION P.LTD. 327 ITR 510, THE LEVY OF PENALTY UNDER SECTION 271(1)(C) WAS FULLY JUSTIFIED. 6. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ZOOM COMMUNICATION P.LTD. (SUPRA) RELIED UPON BY THE LEARNED DR CONSIDERED TH E DECISION OF HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT.LTD. ITA-1175/DEL/2012 4 (SUPRA) RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE AND HELD AS UNDER:- IN THE CASE OF RELIANCE PETROPRODUCTS P.LTD. [2010 ] 322 ITR 158 (SC), THE ADDITION MADE BY THE ASSESSING OF FICER IN RESPECT OF THE INTEREST CLAIMED AS A DEDUCTION UNDE R SECTION 36(1)(III) OF THE ACT WAS DELETED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) THOUGH IT WAS LATER RESTORED, BY THE TRIBUNAL, TO THE ASSESSING OFFICER . THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF T HE TRIBUNAL WAS ADMITTED BY THE HIGH COURT. IT WAS, I N THESE CIRCUMSTANCES, THAT THE TRIBUNAL CAME TO THE CONCLU SION THAT THE ASSESSEE HAD NEITHER CONCEALED THE INCOME NOR FILED INACCURATE PARTICULARS THEREOF. IN RECORDING THIS FINDING, THE TRIBUNAL FELT THAT IF TWO VIEWS OF THE CLAIM OF THE ASSESSEE WERE POSSIBLE, THE EXPLANATION OFFERED BY IT COULD NOT BE SAID TO BE FALSE. THIS, HOWEVER, IS N OT THE FACTUAL POSITION IN THE CASE BEFORE US. THE FACTS OF THE PRESENT CASE THUS ARE CLEARLY DISTINGUISHABLE. IT IS TRUE THAT MERE SUBMITTING A CLAIM WHICH IS INCORRECT IN LAW WOULD NOT AMOUNT TO GIVING INACCUR ATE PARTICULARS OF THE INCOME OF THE ASSESSEE, BUT IT C ANNOT BE DISPUTED THAT THE CLAIM MADE BY THE ASSESSEE NEEDS TO BE BONA FIDE. IF THE CLAIM BESIDES BEING INCORRECT IN LAW IS MALA FIDE, EXPLANATION 1 TO SECTION 271(1)(C) WOULD COME INTO PLAY AND WORK TO THE DISADVANTAGE OF THE ASSES SEE. THE COURT CANNOT OVERLOOK THE FACT THAT ONLY A SMAL L PERCENTAGE OF THE INCOME-TAX RETURNS ARE PICKED UP FOR SCRUTINY. IF THE ASSESSEE MAKES A CLAIM WHICH IS N OT ONLY INCORRECT IN LAW BUT IS ALSO WHOLLY WITHOUT ANY BAS IS AND THE ITA-1175/DEL/2012 5 EXPLANATION FURNISHED BY HIM FOR MAKING SUCH A CLAI M IS NOT FOUND TO BE BONA FIDE, IT WOULD BE DIFFICULT TO SAY THAT HE WOULD STILL NOT BE LIABLE TO PENALTY UNDER SECTI ON 271(1)(C) OF THE ACT. IF WE TAKE THE VIEW THAT A C LAIM WHICH IS WHOLLY UNTENABLE IN LAW AND HAS ABSOLUTELY NO FO UNDATION ON WHICH IT COULD BE MADE, THE ASSESSEE WOULD NOT B E LIABLE TO IMPOSITION OF PENALTY, EVEN IF HE WAS NOT ACTING BONA FIDE WHILE MAKING A CLAIM OF THIS NATURE, THAT WOULD GIVE A LICENCE TO UNSCRUPULOUS ASSESSEES TO MAKE WH OLLY UNTENABLE AND UNSUSTAINABLE CLAIMS WITHOUT THERE BE ING ANY BASIS FOR MAKING THEM, IN THE HOPE THAT THEIR R ETURN WOULD NOT BE PICKED UP FOR SCRUTINY AND THEY WOULD BE ASSESSED ON THE BASIS OF SELF-ASSESSMENT UNDER SECT ION 143(1) OF THE ACT AND EVEN IF THEIR CASE IS SELECTE D FOR SCRUTINY, THEY CAN GET AWAY MERELY BY PAYING THE TA X, WHICH IN ANY CASE, WAS PAYABLE BY THEM. THE CONSEQUENCE WOULD BE THAT THE PERSONS WHO MAKE CLAI MS OF THIS NATURE, ACTUATED BY A MALA FIDE INTENTION T O EVADE TAX OTHERWISE PAYABLE BY THEM WOULD GET AWAY WITHOU T PAYING THE TAX LEGALLY PAYABLE BY THEM, IF THEIR CA SES ARE NOT PICKED UP FOR SCRUTINY. THIS WOULD TAKE AWAY T HE DETERRENT EFFECT, WHICH THESE PENALTY PROVISIONS IN THE ACT HAVE. WE FIND THAT THE ASSESSEE BEFORE US DID NOT EXPLAI N EITHER TO THE INCOME-TAX AUTHORITIES OR TO THE INCO ME-TAX APPELLATE TRIBUNAL AS TO IN WHAT CIRCUMSTANCES AND ON ACCOUNT OF WHOSE MISTAKE, THE AMOUNTS CLAIMED AS DEDUCTIONS IN THIS CASE WERE NOT ADDED, WHILE COMPU TING THE INCOME OF THE ASSESSEE-COMPANY. WE CANNOT LOSE SIGHT OF THE FACT THAT THE ASSESSEE IS A COMPANY WH ICH ITA-1175/DEL/2012 6 MUST BE HAVING PROFESSIONAL ASSISTANCE IN COMPUTATI ON OF ITS INCOME, AND ITS ACCOUNTS ARE COMPULSORILY SUBJE CTED TO AUDIT. IN THE ABSENCE OF ANY DETAILS FROM THE ASSE SSEE, WE FAIL TO APPRECIATE HOW SUCH DEDUCTIONS COULD HAVE B EEN LEFT OUT WHILE COMPUTING THE INCOME OF THE ASSESSEE-COMP ANY AND HOW IT COULD ALSO HAVE ESCAPED THE ATTENTION OF THE AUDITORS OF THE COMPANY. 7. THUS, AFTER CONSIDERING THE DECISION IN THE CASE OF RELIANCE PETROPRODUCTS PVT.LTD. (SUPRA), IT WAS STATED BY THE HONBLE JURISDICTIONAL HIGH COURT THAT MERE SUBMITTING A CL AIM WHICH IS INCORRECT IN LAW WOULD NOT AMOUNT TO GIVING INACCUR ATE PARTICULARS OF THE INCOME OF THE ASSESSEE BUT IF THE CLAIM, BESIDE S BEING INCORRECT IN LAW IS MALA FIDE , EXPLANATION 1 TO SECTION 271(1)(C) WOULD COME INT O PLAY. IF THE ASSESSEES CLAIM IS BONA FIDE, THEN H E WILL NOT BE LIABLE FOR PENALTY. THEREFORE, THE PRECISE QUESTION TO BE ADJ UDICATED BY US IS WHETHER THE ASSESSEES CLAIM WAS BONA FIDE OR MALA FIDE . 8. SECTIONS 23 & 24 OF THE INCOME-TAX ACT, 1961 REA D AS UNDER:- ANNUAL VALUE HOW DETERMINED. ANNUAL VALUE HOW DETERMINED. ANNUAL VALUE HOW DETERMINED. ANNUAL VALUE HOW DETERMINED. 23. 23. 23. 23. (1) FOR THE PURPOSES OF SECTION 22 , THE ANNUAL VALUE OF ANY PROPERTY SHALL BE DEEMED TO BE (A) THE SUM FOR WHICH THE PROPERTY MIGHT REASONABL Y BE EXPECTED TO LET FROM YEAR TO YEAR; OR (B) WHERE THE PROPERTY OR ANY PART OF THE PROPERTY IS LET AND THE ACTUAL RENT RECEIVED OR RECEIVABLE 53 BY THE OWNER IN RESPECT THEREOF IS IN EXCESS OF THE SUM REFERRED TO IN CLAUSE (A), THE AMOUNT SO RECEIVED OR RECEIVABLE; OR (C) WHERE THE PROPERTY OR ANY PART OF THE PROPERTY IS LET AND WAS VACANT DURING THE WHOLE OR ANY PART OF THE PREVIOUS YEAR AND OWING TO SUCH VACANCY THE ACTUAL RENT ITA-1175/DEL/2012 7 RECEIVED OR RECEIVABLE BY THE OWNER IN RESPECT THER EOF IS LESS THAN THE SUM REFERRED TO IN CLAUSE (A), THE AM OUNT SO RECEIVED OR RECEIVABLE : PROVIDED PROVIDED PROVIDED PROVIDED THAT THE TAXES LEVIED 54 BY ANY LOCAL AUTHORITY IN RESPECT OF THE PROPERTY SHALL BE DEDUCTED (IRRESPEC TIVE OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUC H TAXES WAS INCURRED BY THE OWNER ACCORDING TO THE METHOD O F ACCOUNTING REGULARLY EMPLOYED BY HIM) IN DETERMININ G THE ANNUAL VALUE OF THE PROPERTY OF THAT PREVIOUS YEAR IN WHICH SUCH TAXES ARE ACTUALLY PAID BY HIM. EXPLANATION.FOR THE PURPOSES OF CLAUSE (B) OR CLAU SE (C) OF THIS SUB-SECTION, THE AMOUNT OF ACTUAL RENT RECE IVED OR RECEIVABLE BY THE OWNER SHALL NOT INCLUDE, SUBJECT TO SUCH RULES 55 AS MAY BE MADE IN THIS BEHALF, THE AMOUNT OF RENT WHICH THE OWNER CANNOT REALISE. (2) WHERE THE PROPERTY CONSISTS OF A HOUSE OR PART OF A HOUSE WHICH (A) IS IN THE OCCUPATION OF THE OWNER FOR THE PURP OSES OF HIS OWN RESIDENCE; OR (B) CANNOT ACTUALLY BE OCCUPIED BY THE OWNER BY RE ASON OF THE FACT THAT OWING TO HIS EMPLOYMENT, BUSINESS OR PROFESSION CARRIED ON AT ANY OTHER PLACE, HE HAS TO RESIDE AT THAT OTHER PLACE IN A BUILDING NOT BELONGING TO HIM, THE ANNUAL VALUE OF SUCH HOUSE OR PART OF THE HOUSE SHALL BE TAKEN TO BE NIL. (3) THE PROVISIONS OF SUB-SECTION (2) SHALL NOT APP LY IF (A) THE HOUSE OR PART OF THE HOUSE IS ACTUALLY LET DURING THE WHOLE OR ANY PART OF THE PREVIOUS YEAR; OR (B) ANY OTHER BENEFIT THEREFROM IS DERIVED BY THE OWNER. (4) WHERE THE PROPERTY REFERRED TO IN SUB-SECTION ( 2) CONSISTS OF MORE THAN ONE HOUSE (A) THE PROVISIONS OF THAT SUB-SECTION SHALL APPLY ONLY IN RESPECT OF ONE OF SUCH HOUSES, WHICH THE ASSESSEE M AY, AT HIS OPTION, SPECIFY IN THIS BEHALF; ITA-1175/DEL/2012 8 (B) THE ANNUAL VALUE OF THE HOUSE OR HOUSES, OTHER THAN THE HOUSE IN RESPECT OF WHICH THE ASSESSEE HAS EXER CISED AN OPTION UNDER CLAUSE (A), SHALL BE DETERMINED UND ER SUB- SECTION (1) AS IF SUCH HOUSE OR HOUSES HAD BEEN LET .] DEDUCTIONS FROM INCOME FROM HOUSE PROPERTY DEDUCTIONS FROM INCOME FROM HOUSE PROPERTY DEDUCTIONS FROM INCOME FROM HOUSE PROPERTY DEDUCTIONS FROM INCOME FROM HOUSE PROPERTY. 24. 24. 24. 24. INCOME CHARGEABLE UNDER THE HEAD 'INCOME FROM H OUSE PROPERTY' SHALL BE COMPUTED AFTER MAKING THE FOLLOW ING DEDUCTIONS, NAMELY: (A) A SUM EQUAL TO THIRTY PER CENT OF THE ANNUAL V ALUE; (B) WHERE THE PROPERTY HAS BEEN ACQUIRED, CONSTRUC TED, REPAIRED, RENEWED OR RECONSTRUCTED WITH BORROWED CA PITAL, THE AMOUNT OF ANY INTEREST PAYABLE ON SUCH CAPITAL: PROVID PROVID PROVID PROVIDED EDED ED THAT IN RESPECT OF PROPERTY REFERRED TO IN SUB- SECTION (2) OF SECTION 23 , THE AMOUNT OF DEDUCTION SHALL NOT EXCEED THIRTY THOUSAND RUPEES : PROVIDED FURTHER PROVIDED FURTHER PROVIDED FURTHER PROVIDED FURTHER THAT WHERE THE PROPERTY REFERRED T O IN THE FIRST PROVISO IS ACQUIRED OR CONSTRUCTED WITH CAPIT AL BORROWED ON OR AFTER THE 1ST DAY OF APRIL, 1999 AND SUCH ACQUISITION OR CONSTRUCTION IS COMPLETED 57 [WITHIN THREE YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH C APITAL WAS BORROWED], THE AMOUNT OF DEDUCTION UNDER THIS C LAUSE SHALL NOT EXCEED ONE LAKH FIFTY THOUSAND RUPEES. EXPLANATION.WHERE THE PROPERTY HAS BEEN ACQUIRED O R CONSTRUCTED WITH BORROWED CAPITAL, THE INTEREST, IF ANY, PAYABLE ON SUCH CAPITAL BORROWED FOR THE PERIOD PRI OR TO THE PREVIOUS YEAR IN WHICH THE PROPERTY HAS BEEN AC QUIRED OR CONSTRUCTED, AS REDUCED BY ANY PART THEREOF ALLO WED AS DEDUCTION UNDER ANY OTHER PROVISION OF THIS ACT, SH ALL BE DEDUCTED UNDER THIS CLAUSE IN EQUAL INSTALMENTS FOR THE SAID PREVIOUS YEAR AND FOR EACH OF THE FOUR IMMEDIA TELY SUCCEEDING PREVIOUS YEARS:] 58 [PROVIDED ALSO PROVIDED ALSO PROVIDED ALSO PROVIDED ALSO THAT NO DEDUCTION SHALL BE MADE UNDER THE SECOND PROVISO UNLESS THE ASSESSEE FURNISHES A CERT IFICATE, FROM THE PERSON TO WHOM ANY INTEREST IS PAYABLE ON THE CAPITAL BORROWED, SPECIFYING THE AMOUNT OF INTEREST PAYABLE BY THE ASSESSEE FOR THE PURPOSE OF SUCH ACQUISITION OR CONSTRUCTION OF THE PROPERTY, OR, CO NVERSION ITA-1175/DEL/2012 9 OF THE WHOLE OR ANY PART OF THE CAPITAL BORROWED WH ICH REMAINS TO BE REPAID AS A NEW LOAN. EXPLANATION.FOR THE PURPOSES OF THIS PROVISO, THE EXPRESSION 'NEW LOAN' MEANS THE WHOLE OR ANY PART O F A LOAN TAKEN BY THE ASSESSEE SUBSEQUENT TO THE CAPITA L BORROWED, FOR THE PURPOSE OF REPAYMENT OF SUCH CAPI TAL.] 9. AS PER THE PROVISO TO SECTION 23(1), THE DEDUCTI ON FOR TAX LEVIED BY THE LOCAL AUTHORITY IS ALLOWABLE. AS PER SECTIO N 24(B), INTEREST PAYABLE ON THE MONEY BORROWED FOR THE PURPOSE OF AC QUISITION OR CONSTRUCTION OF THE PROPERTIES IS ALLOWABLE AND AS PER SECTION 24(A), A STANDARD DEDUCTION OF 30% IS ALLOWABLE. NO OTHER D EDUCTION IS PERMISSIBLE AS PER SECTIONS 23 & 24. WE, THEREFORE , ARE OF THE OPINION THAT SO FAR AS THE ASSESSEES CLAIM FOR DEDUCTION O F INTEREST AND HOUSE TAX IS CONCERNED, IT IS A BONA FIDE CLAIM. HOWEVER, WE AGREE WITH THE CONTENTION OF THE LEARNED DR THAT ON THE FACTS OF T HE ASSESSEES CASE, IT SEEMS THAT THE CLAIM OF DEDUCTION OF BROKERAGE AND STAMP DUTY CANNOT BE SAID TO BE BONA FIDE . WE, THEREFORE, DELETE THE PENALTY IN RESPECT OF ASSESSEES CLAIM FOR DEDUCTION OF INTEREST AND HOUS E TAX AND DIRECT THE ASSESSING OFFICER TO LEVY THE MINIMUM PENALTY IN RE SPECT OF CLAIM FOR BROKERAGE AND STAMP DUTY. THE ASSESSING OFFICER WI LL RECOMPUTE THE PENALTY ACCORDINGLY. 10. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 21 ST SEPTEMBER, 2012. SD/- SD/- ( (( (I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 21.09.2012 VK. COPY FORWARDED TO: - ITA-1175/DEL/2012 10 1. APPELLANT : M/S MILESTONE REALTORS PVT.LTD., M/S MILESTONE REALTORS PVT.LTD., M/S MILESTONE REALTORS PVT.LTD., M/S MILESTONE REALTORS PVT.LTD., 8 88 8- -- -B, RAJENDRA PAR B, RAJENDRA PAR B, RAJENDRA PAR B, RAJENDRA PARK, K,K, K, PUSA ROAD, PUSA ROAD, PUSA ROAD, PUSA ROAD, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 060. 110 060. 110 060. 110 060. 2. RESPONDENT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -6(4), 6(4), 6(4), 6(4), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR