Ess En Construction, Surat V. The Income tax Officer,Ward-2(2), Surat

ITA 1250/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85723 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 06-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 27-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Keywords: Business income; Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD (BEFOR E SHRI SHAILENDRA KR. YADAV, J.M. & SHRI ANIL CHATURVEDI , A.M.) I. T. A. NO. 1250 / AHD/ 20 1 1 (A SSESSMENT YEAR: 2007 - 08) ESSEN CONSTRUCTION 1, RATHI PALACE, NR. SARVODAY MARKET, RING, ROAD, SURAT V/S THE I.T.O., WARD - 2(2), SURAT (APPELLANT) (RESPONDENT) PAN: AACFG3289P APPELLANT BY : SHRI RAMESH MALPANI RESPONDENT BY : SHRI M.K. SINGH, SR.D.R. ( )/ ORDER DATE OF HEARING : 06 - 02 - 2015 DATE OF PRONOUNCEMENT : 26 - 02 - 2015 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) - II, SURAT DATED 23.0 2.2011 FOR A.Y. 2007 - 08. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A PARTNERSHIP FI RM STATED TO BE ENGAGED IN THE BUSINESS OF LETTING OUT OF COUNTER, PLACES AND SHOPS. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 07 - 08 ON 30.03 .2008 DECLARING TOTAL INCOME AT RS. NIL . THE CASE WAS ITA NO 1250/AHD/2011 . A.Y. 2007 - 08 2 SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FR AMED UNDER SE CTION 143(3) VIDE ORDER DATED 11.12.2009 AND THE TOTAL INC OME WAS DETERMINED AT RS. 19,27,080/ - . AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFOR E LD. CIT(A) WHO VIDE ORDER DATED 23.2.2011 DISMISSED THE APPEAL OF THE ASSESSEE . AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A) ASSESSEE IS NOW IN APPEAL BEFORE US AND HA S RAISED THE FOLLOWING GROUNDS; - 1. THAT WHOLE OF ASSESSMENT PROCEEDINGS AND THE ASSESSMENT ORDER PASSED THEREBY ARE WRONG AND BAD IN LAW AS THE SAME ARE NOT BASED ON A NY VALID NOTICE ISSUED AND SERVED UPON THE APPELLANT U/S 143(2) OF THE I. T. ACT, 1961 (THE ACT) WITHIN TIME LIMIT STIPULATED IN AMENDED PROVISO TO SECTION 143(2) (II) OF THE ACT. HON'BLE CIT (A) HAS ERRED IN REJECTING THIS GROUND OF THE APPELLANT'S APPEAL AND IN SUSTAINING THE VALIDITY OF THE ASSESSMENT ORDER PASSED WITHOUT VALID SERVICE OF NOTICE U/S 143(2) OF THE ACT WITHIN THE STIPULATED TIME LIMIT. 2. THAT HON'BLE CIT (A) HAS ERRED IN SUSTAINING THE TREATMENT OF RENTAL INCOME EARNED BY THE APPELLANT BY GI VING COUNTERS/SPACES/SHOPS IN 'RETAIL MALL' AS 'INCOME FROM HOUSE PROPERTY' INSTEAD OF 'PROFITS & GAINS OF BUSINESS'. 3. THAT HON'BLE CIT (A) HAS ERRED IN UPHOLDING THE DISALLOWANCE OF DEDUCTION OF VARIOUS EXPENSES SUCH AS ELECTRICITY CHARGES, DEPRECIATION, G ENERAL EXPENSES, LEGAL & PROFESSIONAL FEES, REPAIRS & MAINTENANCE, SALARY, BANK CHARGES AND PARTNERS' INTEREST DEBITED IN TRADING & PROFIT & LOSS ACCOUNT TOTALING TO RS. 20,15,236/ - AFTER TREATING RENTAL INCOME AS 'INCOME FROM HOUSE PROPERTY'. 4. WITHOUT PREJ UDICE TO ABOVE GROUNDS OF APPEALS, THAT EVEN IF RENT INCOME IS TREATED AS 'INCOME FROM HOUSE PROPERTY', THEN ALSO THE APPELLANT IS ENTITLED FOR DEDUCTION OF INTEREST PAID TO PARTNERS U/S 24(B) OF THE ACT R. W. S. 36(L)(III) OF THE ACT. THAT HON'BLE CIT (A) HAS ERRED IN UPHOLDING THE DISALLOWANCE/REJECTION OF DEDUCTION OF INTEREST PAID TO PARTNERS OF RS. 15,26,850/ - U/S 24(B) OF THE ACT. 4. SUBSEQUENTLY, VIDE LETTER DATED 18.04.2011, ASSESSEE MADE AN APPLICATION FOR ADMISSION OF FOLLOWING ADDITIONAL GROUND: - 7) WITHOUT PREJUDICE TO OTHER GROUNDS OF APPEAL, THAT THE ID. A. O. HAS ERRED IN NOT ALLOWING SET OFF OF BROUGHT FORWARD BUSINESS LOSS OF RS. 7,87,519/ - AGAINST THE INCOME ASSESSED.' 5. WITH RESPECT TO THE ADMISSION OF ADDITIONAL GROUND LD. AR SUBMITTED THA T ASSESSEE HAD EARNED RENTAL INCOME BY LETTING OUT THE SPACES/COUNTER/S HOPS IN A PROJECT DEVELOPED AS RETAIL M ALL. ASSESSEE CONSIDERED THE RENTAL INCOME ITA NO 1250/AHD/2011 . A.Y. 2007 - 08 3 RECEIVED BY IT TO BE BUSINESS INCOME AND ACCORDINGLY THE BROUGHT FORWARD LOSS WAS SET OFF AGAINST TH E INCOME. A.O HOWEVER ASSESSED THE INCOME AS INCOME FROM HOUSE PROPERTY AND DID NOT GRANT SET OFF OF BROUGHT FORWARD BUSINESS LOSS. THE ASSESSEE WAS INITIALLY ADVISED THAT THE BUSINESS LOSS CAN BE SET OF ONLY AGAINST BUSINES S INCOME AND THEREFORE THE AD DITIONAL GROUND OF APPEAL WHICH IS NOW TAKEN UP BEFORE HON BLE ITAT WAS NOT TAKEN UP BEFORE LD. CIT(A). HOWEVER , LATER ON IT HAS COME TO ASSESSEE S KNOWLEDGE ABOUT THE JUDICIAL PRONOUNCEMENT WHERE IT HAS BEEN HELD THAT EVEN IF ANY ASSESSEE EARNS ANY INCOME UNDER ANY OTHER HEAD OF INCOME IN THE COURSE OF CARRYING OF BUSINES S THAN HE IS ELIGIBLE FOR SET OFF OF BROUGHT FORWARD BUSINESS LOSS AGAINST SUCH INCOME THOUGH ASSESSED UNDER OTHER HEAD BUT EARNED IN THE COURSE OF BUSINESS AND FOR THE AFORESAID PROPOSITI ON, HE RELIED ON THE DECISION IN THE CASE OF DIGITAL ELECTRONICS LTD. VS. ACIT (2011) 135 TTJ 419 (MUM) AND THE DECISION OF MUM. TRIBUNAL IN THE CASE OF GAGAN TRADING CO. LTD. VS. DCIT. IT WAS FURTHER SUBMITTED THAT THE AFORESAID GROUND BEING A LAW POINT A ND DEALS WITH THE LEGAL RIGHT OF THE ASSESSEE THE SAME BE ADMITTED. THE LD. A.R. WITH RESPECT TO ADMISSION OF ADDITIONAL GROUND ALSO RELIED ON THE DECISION OF APEX COURT IN THE CASE OF NTPC LTD. VS. CIT (1998) 229 ITR 383 (SC). THE LD. D.R. ON THE OTHER HA ND OBJECTED TO THE ADMISSION OF ADDITIONAL GROUND. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT BEFORE US ASSESSEE HAS TAKEN AN ADDITI ONAL GROUND WITH RESPECT TO NON ALLOWING THE SET OF BROUGHT FORWARD BUSINESS LOS S AGAINST THE INCOME ASSESSED UNDER OTHER HEAD. THE AFORESAID GROUND, AS ADMITTED BY THE ASSESSEE , WAS NOT TAKEN BEFORE LD. CIT(A). CONSIDERING THE SUBMISSIONS ITA NO 1250/AHD/2011 . A.Y. 2007 - 08 4 MADE BY THE ASSESSEE, WE ARE OF THE VIEW THAT IT DEALS WITH THE LEGAL RIGHT OF THE ASSESSEE AND THEREFORE THE SAME IS ADMITTED. BEFORE US, LD AR SUBMITTED THAT HE DID NOT WANT TO PRESS GROUND NO. 1 AND THEREFORE THE GROUND IS DISMISSED . GROUND NO. 2, 3 & 4 ARE INTERCONNECTED AND THEREFORE CONSIDERED TOGETHER. 7. DURING THE COURSE OF ASSESSMENT PR OCEEDINGS, A.O ON PERUSING THE BALANCE SHEET AND THE PROFIT AND LOSS ACCOUNT NOTICED THAT ASSESSEE HAD NOT DONE ANY BUSINESS DURING THE YEAR AND THE ONLY INCOME WAS FROM THE RENT RECEIPT FROM THE PROPERTY GIVEN ON RENT. ON FURTHER PERUSING THE PROFIT AND L OSS ACCOUNT HE NOTICED THAT ASSESSEE HAD SHOWN OPENING STOCK, CLOSING STOCK, SALES RECEIPTS, EX PENSES ON VARIOUS HEADS. HE ALSO NOTICED THAT THE CLOSING STOCK OF RS. 1,25,36,346/ - A S APPEARING ON 31 ST MARCH, 2007 WAS NOT APPEARING IN THE TRADING ACCOUNT BUT WAS REFLECTED UNDER THE HEAD OF FIXED ASSETS AS CAPITAL WORK IN PROGRESS AND THEREFORE ASSESSEE HAD CONVERTED THE STOCK INTO FIXED ASSETS . A.O WAS OF THE VIEW THAT SINCE ASSESSEE HAS NOT DONE ANY BUSINESS AND RECEIVED RENTAL INCOME FROM VARIOUS PART IES AGAINST THE PROPERTY GIVEN ON RENT , THE INCOME RECEIVED SHOULD BE TAXED AS PROPERTY INCOME. THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE INCOME NOT BE TREATED AS INCOME FROM HOUSE PROPERTY AS AGAINST THE BUSINESS INCOME CLAIMED BY THE ASSESSE E TO WHICH ASSESSEE INTERALIA SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONSTRUCTION , DEVELOPMENT OF PROPERTY AS BUILDERS AND HAD CONSTRUCTED RETAIL MALL. THE COUNTER, SPACES AND SHOPS GIVEN TO VARIOUS PEOPLE ON RENT WAS A BUSINESS ACTIVITY . THE ITA NO 1250/AHD/2011 . A.Y. 2007 - 08 5 SUBMISSION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE A.O FOR THE REASON THAT THE ASSESSEE HAD CONVERTED THE STOCK INTO FIXED ASSETS AND HAD STARTED GIVING THE PROPERTY TO EARN INCOME. HE ALSO NOTICED THAT THE INTEREST FREE DEPOSITS TAKEN FROM T HE TENANTS WERE SHOWN UNDER THE HEAD CURRENT LIABILITY. HE THEREFORE FOLLOWING THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF SHAMBU INVESTMENT PVT. LTD. (2003) 263 ITR 143 (SC) HELD THAT THE RENTAL INCOME IS TO BE CONSIDERED AS INCOME FROM HOUSE PR OPERTY . WITH RESPECT TO THE CLAIM OF INTEREST U/S. 24(B), A.O NOTICED THAT INTEREST U/S 24(B) IS ALLOWABLE ONLY IF ASSESSEE HAD CONSTRUCTED THE PROPERTY WITH BORROWED FUNDS. HE WAS OF THE VIEW THAT ASSESSEE HAD NOT BORROWED ANY FUNDS NOR PAID INTEREST ON IT BUT ON THE CONTRARY HAD ADVANCED RS. 3 CRORE WITHOUT CHARGING ANY INTEREST TO ITS SISTER CONCERNS WHICH CLE ARLY SHOWED THAT THE ASSESSEE HAD SURPLUS FUND AND THEREFORE ALLOW ABILITY OF DEDUCTION U/S. 24(B) WITH RESPECT TO PAYMENT OF INTEREST DOES NOT AR ISE. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISMISSED THE APPEAL BY HOLDING AS UNDER: - 4.2. THE SECOND GROUND OF APPEAL IS AGAINST TREATMENT OF RENTAL INCOME SHOWN AS PROFI TS & GAINS FROM BUSINESS OR PROFESSION, AS INCOME FROM HOUSE PROPERTY. THE FACTS REGARDING THE SAME HAVE ALREADY BEEN DISCUSSED ABOVE. THE APPELLANT'S SUBMISSION, REPRODUCED ABOVE, IS MAINLY ON THE BASIS OF VARIOUS DECISIONS OF THE TRIBUNALS AND COURT THAT MAIN OBJECT OF THE ACTIVITY CARRIED OUT DURING THE YEAR WAS TO EARN PROFIT FROM SALE OF THE UNITS OF THE PROJECT AND THE PREMISES CONCERNED WAS A COMPLEX AND RUNNING OF THE SAME AS A RETAIL MALL IS COMMERCIAL ACTIVITY AND, ALL THE EXPENSES WERE INCURRED I N CARRYING OUT THE SAID BUSINESS. IT IS FURTHER SUBMITTED THAT THE APPELLANT'S INTENTION WAS TO EXPLOIT THE SAID BUSINESS ASSET OF 'PICNIC RETAIL MALL' AND EARNING OF RENTAL INCOME. I FIND THAT THE ABOVE ARGUMENTS WERE ALSO TAKEN UP BEFORE THE ASSESSING OF FICER WHO HAS DULY CONSIDERED THE SAME IN PARAS 5 TO 9 OF THE ORDER. I ALSO FIND THAT THE APPELLANT HIMSELF, IN THE STATEMENT OF FACTS FILED ALONG WITH FORM NO. 35, HAS SUBMITTED THAT THE PROJECT WAS NOT SUCCESSFUL AND COULD NOT BE SOLD, AND SINCE HE COULD NOT RECEIVE ANY BOOKING FOR THE SAME, HE STARTED GIVING THE COUNTERS/SPACES AND SHOPS TO VARIOUS PERSONS ON RENTAL BASIS. THIS SELF ADMITTED FACT ITSELF INDICATES THAT THE ACTIVITY OF GIVING COUNTERS/SPACES AND SHOPS WAS NEVER TAKEN UP AS A BUSINESS VENTU RE , BUT TO EARN RENT, AS THERE WAS NO BOOKING FOR SALE ITA NO 1250/AHD/2011 . A.Y. 2007 - 08 6 OF SHOPS/COUNTERS/SPACES. I, THEREFORE, DO NOT FIND ANY REASON TO DEVIATE FROM THE FINDING GIVEN IN THE ORDER ON THIS ISSUE AND CONFIRM THE ACTION OF THE ASSESSING OFFICER IN TREATING THE INCOME RECEI VED DURING THE YEAR AS RENT FROM THE TENANTS OF COUNTER/SPACES AND SHOPS IN THE ABOVE PROJECT UNDER THE HEAD 'PROPERTY INCOME'. THIS GROUND OF APPEAL IS, THEREFORE, DISMISSED. 4.3. THE THIRD GROUND OF APPEAL IS THAT THE ASSESSING OFFICER HAS ERRED IN NOT GIVING DEDUCTION OF VARIOUS EXPENSES AMOUNTING TO RS. 20,15,236/ - AFTER TREATING THE INCOME FROM RENT AS INCOME FROM HOUSE PROPERTY. I DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE APPELLANT AS WHEN RENTAL INCOME HAS BEEN ASSESSED UNDER THE HEAD 'HOUSE P ROPERTY INCOME', DEDUCTION OF EXPENSES IS AS PER PROVISIONS OF SECTION 24 OF THE ACT, WHICH THE ASSESSING OFFICER HAS ALREADY ALLOWED. I, THEREFORE, DISMISS THIS GROUND OF APPEAL. 4.4. THE FOURTH GROUND OF APPEAL IS AN ALTERNATE GROUND OF APPEAL THAT THE INTERE ST PAID TO PARTNERS OF RS. 15,26,850/ - AND OTHER EXPENSES IS ALLOWABLE AS DEDUCTION. THE APPELLANT, IN THIS REGARD HAS CLAIMED THAT IF THE INCOME BY WAY OF RENT FROM 'PICNIC RETAIL MALL' HAS BEEN TREATED UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY', THEN HE IS ELIGIBLE FOR DEDUCTION U/S 24(B) OF THE ACT. I HAVE DULY CONSIDERED THIS SUBMISSION OF THE APPELLANT AND DO NOT FIND ANY MERIT IN THE SAME, AS THE INTEREST ALLOWABLE U/S 24(B) CANNOT BE EQUATED WITH INTEREST ALLOWABLE U/S 36(L)(III) OF THE ACT. THE PRO VISIONS RELATING TO EARLIER SECTION IS FOR COMPUTATION OF HOUSE PROPERTY INCOME AND THE LATTER OF BUSINESS INCOME. THEREFORE, INTEREST PAID TO PARTNERS HAS NO RELEVANCE TO COMPUTATION OF HOUSE PROPERTY INCOME. I, THEREFORE, DO NOT FIND ANY MERIT IN THE ARG UMENT THAT DEDUCTION OF INTEREST PAID TO PARTNERS OF RS. 15,26,850/ - IS ALLOWABLE U/S 24(B) OF THE ACT, AND DISMISS THIRD AND FOURTH GROUNDS OF APPEAL TAKEN BY THE APPELLANT. 8. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 9. BEFO RE US, LD. A.R REITERATED THE SUBMISSIONS MADE BEFORE A.O AND LD. CIT(A). HE FURTHER RELIED ON THE DECISION OF HON BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. NEHA BUILDERS PVT. LTD. (2008) 296 ITR 661 (GUJ). WITH RESPECT TO DISALLOWANCE OF DEDUCTION OF VARIOUS EXPENSES AGGREGATING TO RS. 20,15,236/ - AFTER TREATING RENTAL INCOME AS INCOME FROM HOUSE PROPERTY AND ALLOWING INTER EST PAID TO PARTNERS U/S. 24(B), H E RELIED ON THE DECISION OF DELHI TRIBUNAL IN THE CASE OF ITO VS. MOKUL FINANCE PVT. LTD. 110 TTJ (DEL.) 445 AND ITO VS. M.M. TEXTILES (2010) 122 ITD 435. BOMBAY TRIBUNAL DECISION IN THE CASE OF SANE & DOSHI ENTERPRISES VS. ACIT ITA NO. ITA NO 1250/AHD/2011 . A.Y. 2007 - 08 7 6532/MUM/2010 ORDER DATED 16.05.2012. HE THEREFORE SUBMITTED THAT THE AO HAS WRONGLY CONSIDERED THE INCOME TO BE F ROM HOUSE PROPERTY AND THE ASSESSEE WAS RIGHT IN CLAIMING THE I NCOME AS BUSINESS INCOME. LD. D R ON THE OTHER HAND POINTED TO THE FINDINGS OF AO AND CIT(A) AND SUPPORTED THEIR ORDERS. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECOR D. THE ISSUE IN THE PRESENT CASE IS AS TO WHETHER THE INCOME EARNED FROM LETTING OUT OF COUNTERS, SPACES IS TO BE CONSIDERED AS BUSINESS INCOME OR INCOME FROM HOUSE PROPERTY . WE FIND THAT LD. CIT(A) AFTER CONSIDERING THE DETAILED SUBMISSIONS OF THE A SSESSEE HAS REACH ED TO A CONCLUSION THAT THE ACTIVITY OF GIVIN G COUNTERS/SPACES/SHOPS WAS NEVER TAKEN UP AS A BUSINESS VENTURE BUT WAS TO E ARN RENT. WITH RESPECT TO THE ALLOW ABILITY OF INTEREST PAID TO PARTNERS AS INTEREST ALLOWABLE U/S. 24( B), W E FIND THA T LD. CIT(A) HAS NOTED THAT INTEREST ALLOWABLE U/S. 24(B) CANNOT BE EQUATED WITH INTEREST ALLOWABLE U/S. 36(1)(III) OF THE ACT. BEFORE US, LD. A.R. HAS RELIED ON THE DECISION IN THE CASE OF CIT VS. NEHA BUILDERS PVT. LTD. (SUPRA) HOWEVER, WE FIND THAT THE RATIO OF THE AFORESAID DECISION IS NOT APPLICABLE TO THE FACTS OF THE CASE BECAUSE THE RENTAL INCOME WHICH WAS EARNED FROM THE PROPERTY IN CASE OF NEHA BUILDERS WAS HELD AS STOCK IN TRADE WHEREAS IN THE CASE OF ASSESSEE, A.O HAS NOTED THAT THE PROPERTY W AS SHOWN AS CAPITAL WORK IN PROGRESS AND NOT AS STOCK IN TRADE . SIMILARLY, THE CASE OF ITO VS. MO KUL FINANCE (SUPRA) WHIC H HAS BEEN RELIED UPON BY A.R. WE FIND THAT IT WAS A CASE OF CORPORATE ASSESSEE WHOSE BUSINESS WAS NOT FUNCTIONAL IN THE RELEVANT P REVIOUS YEAR AND IN SUCH CIRCUMSTANCES IT WAS HELD THAT INCURRING OF CERTAIN EXPENDITURE WAS NECESSARY TO KEEP ITSELF AFLOAT TO HAVE ITS CONTINUED EXISTENCE, AND THEREFORE THE EXPENDITURE WAS HELD TO BE ALLOWABLE. IN THE PRESENT CASE, WE FIND THAT IT ITA NO 1250/AHD/2011 . A.Y. 2007 - 08 8 IS NO T THE CASE WHERE THE BUSINESS WAS NON FUNCTIONAL TEMPORARILY. SIMILARLY, THE DECISION RELIED IN THE CASE OF ITO VS. M.M. TEXTILE ARE ON DIFFERENT FACTS AND THEREFORE ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THE CASE OF SANE AND DOSHI ENTERPR ISES (SUPRA) WE FIND THAT EXPENDITURE FOR CLAIM OF DEDUCTION U/S. 24(B) WAS ALLOWED BY FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR EARLI ER YEARS. CONSIDERING THE AFORESAID FACTS, WE ARE OF THE VIEW THAT THE DECISIONS CITED AND RELIED UPON BY THE LD. A. R. ARE NOT APPLICABLE TO THE PRESENT CASE . FURTHER DEDUCTION U/S. 24(B) IS ALLOWABLE WHEN THE PROPERT Y HAS BEEN ACQUIRED, CONSTRUCTED, REPAIRED , RENEW ED OR RECONSTRUCTED WITH BORROWED CAPITAL. IN THE PRESENT CASE NO MATERIAL HAS BEEN B ROUGHT ON RECORD TO DEMONSTRATE THAT THE BORROWED CAPITAL HAS BEEN USED FOR THE ACQUISITION OF PROPERTY. CONSIDERING THE TOTALITY OF THE AFORESAID FACTS, WE FI ND THAT NO REA SON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND THUS THE GROUNDS ARE DISMISSED. 11. WITH RESPECT TO THE ADDITIONAL GROUND WE FIND THAT THIS GROUND HAS BEEN TAKEN BEFORE US FOR THE FIRST TIME AND WAS NOT TAKEN BEFORE LD. CIT(A) AND THEREFORE LD. CIT(A) HAD NO OCCASION TO EXAMINE THE ISSUE. IN VIEW OF THESE FACTS, WE ARE OF THE VIEW THAT THE ADDITIONAL GROUND TAKEN BY THE ASSESSEE NEEDS TO BE EXAMINED AT THE END OF LD.CIT(A). WE THEREFORE REMIT THE ISSUE TO THE FILE OF LD. CIT(A) TO DECIDE THE GROUND ON MERITS AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND IN ACCORDANCE WITH LAW. NE EDLESS TO STATE LD. CIT(A) SHALL ADEQUATE OPPORTUNITY OF HEARING TO BOTH THE PARTIES. BEFORE THE CIT(A), THE ASSESSEE SHALL BE FREE TO PRODUCE ADDITIONAL DOCUMENTS, IF SO DESIRED, SUBJECT TO THE FULFILLMENT OF THE REQUIREMENT UNDER RULE 46A OF THE INCOME TAX ACT. IN THE RESULT, THE GROUND OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO 1250/AHD/2011 . A.Y. 2007 - 08 9 12. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 26 - 02 - 201 5 . SD/ - SD/ - (SHAILENDRA KR. YADAV ) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD