Smt. Tumati VijayaLakshmi, Visakhapatnam V. The Income Tax Officer, Ward-5(2), Visakhapatnam, Visakhapatnam

ITA 138/VIZ/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76526 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 25-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KOMALI KRISHNA
• Assessee Lawyers: T SURYACHANDRA RAO
• Section: 143(3)

Judgement Text

ITA NO.138/VIZAG/2012 TUMATI VIJAYA LAKSHMI, VISAKHAPATNAM IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.138/VIZAG/2012 ASSESSMENT YEAR : 2007-08 TUMATI VIJAYA LAKSHMI VISAKHAPATNAM VS. ITO WARD-5(2) VISAKHAPATNAM (APPELLANT) (RESPONDENT) PAN NO.ACHPT 3409R ASSESSEE BY: SHRI T. SURYACHANDRA RAO, CA REVENUE BY: SMT. KOMALI KRISHNA, ADDL. CIT DATE OF HEARING : 06.03.2014 DATE OF PRONOUNCEMENT : 07.03.2014 ORDER PER SAKTIJIT DEY, JUDICIAL MEMBER:- THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 30.11.2011 OF THE CIT(A), VISAKHAPATNAM PERTAINING TO THE ASSESSMENT YEAR 2007-08. THERE IS A DELAY OF 25 DAYS IN FILING TH E APPEAL. THE ASSESSEE HAS FILED A PETITION SUPPORTED BY AN AFFIDAVIT SEEKING CONDONATION OF DELAY. AFTER CONSIDERING THE CAUSE OF DELAY AS EXPLAINED IN THE SAID PETITION AS WELL AS SUBMISSIONS OF THE LD. A.R., WE ARE INCLINED TO CON DONE THE DELAY AND ADMIT THE APPEAL FOR HEARING ON MERIT. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THE AFO RESAID APPEAL IS WITH REGARD TO THE DISALLOWANCE OF A SUM OF RS.2,81,199/ - BEING THE INTEREST PAID ON HOUSE BUILDING LOAN. BRIEFLY STATED, THE ASSESS EE AN INDIVIDUAL DERIVES RENTAL INCOME FROM HOUSE PROPERTY FOR THE ASSESSMEN T YEAR UNDER DISPUTE. SHE FILED HER RETURN OF INCOME ON 22.2.2008 DECLARI NG TOTAL INCOME AT NIL. DURING THE SCRUTINY ASSESSMENT PROCEEDING, THE ASSE SSING OFFICER WHILE EXAMINING THE COMPUTATION OF INCOME NOTICED THAT TH E ASSESSEE HAS CLAIMED ITA NO.138/VIZAG/2012 TUMATI VIJAYA LAKSHMI, VISAKHAPATNAM 2 DEDUCTION OF RS.2,81,199/- TOWARDS PAYMENT OF INTER EST ON HOUSE BUILDING LOAN. THE ASSESSING OFFICER CALLED UPON THE ASSESS EE TO FURNISH A CERTIFICATE FROM THE BANK, CERTIFYING THE PAYMENT OF THE AFORES AID INTEREST ON HOUSE BUILDING LOAN. AS STATED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, SINCE THE ASSESSEE COULD NOT PRODUCE ANY CERTIFICAT E FROM THE BANK, THE ASSESSING OFFICER DISALLOWED THE AMOUNT OF RS.2,81, 199/- BY HOLDING THAT FURNISHING OF SUCH CERTIFICATE FROM THE BANK IS MAN DATORY AS PER THE PROVISIONS OF SECTION 24(B) OF THE INCOME-TAX ACT. 3. BEING AGGRIEVED OF SUCH DISALLOWANCE, THE ASSESS EE PREFERRED APPEAL BEFORE THE CIT(A). IN COURSE OF HEARING BEFORE THE CIT(A), THE ASSESSEE CHALLENGING THE REASONING OF THE ASSESSING OFFICER SUBMITTED THAT THE BANK STATEMENT PRODUCED BEFORE THE ASSESSING OFFICER SHO WS THE DEBIT OF INTEREST HENCE THE ASSESSING OFFICER SHOULD NOT HAVE DISALLO WED MERELY ON THE GROUND THAT THE ASSESSEE COULD NOT PRODUCE A CERTIFICATE F ROM THE BANK. THE CIT(A) HOWEVER SUSTAINED THE ADDITION BY HOLDING AS UNDER: 5.1 I HAVE CONSIDERED THE ARGUMENTS OF THE ASSE SSEE AND HAVE PERUSED THE COPIES OF BANK ACCOUNT SUBMITTED. IT IS SEEN FROM THE BANK STATEMENT THAT THE LOAN ACCOUNT STANDS IN THE NAME OF SRI T.MANMADHA RAO AND SMT. T .VIJAYA LAKSHMI. THE ACCOUNT IS NOT A HOUSING LOAN BUT IS AN OVER DRAFT ACCOUNT. AS SESEEE ALSO DID NOT SUBMIT ANY PROOF EITHER DURING THE ASSESSMENT PROCEEDINGS OR DURING APPELLATE PROCEEDINGS THAT THE SAID OVERDRAFT WAS UTILIZED FOR THE PURPOSE OF CONSTRUCT ION OF ADDITIONAL FLOORS ON THE HOUSE. IT IS ALSO NOT CLEAR AS TO WHY ASSESSEE PREFERRED T O TAKE OVER DRAFT INSTEAD OF HOUSING LOAN. ASSESSEE DID NOT FURNISH ANY CERTIFICATE EITH ER DURING ASSESSMENT PROCEEDINGS OR DURING APPELLATE PROCEEDINGS THAT THE OVER DRAFT IS GIVEN FOR THE PURPOSE OF HOUSE CONSTRUCTION. IT IS ALSO NOT CLEAR AS TO HOW ASSESS EE IS CLAIMING THE ENTIRE INTEREST WHEN THE ACCOUNT IS HELD IN THE JOINT NAMES. THOUGH IT I S NOT MANDATORY THAT A CERTIFICATE SHOULD BE FURNISHED FROM THE BANK AUTHORITIES, REAS ONS FOR ASSESSEE'S NON SUBMISSION OF SUCH CERTIFICATE ARE NOT KNOWN. CONSIDERING ALL THE SE ASPECTS AND CONSIDERING THE FACT THAT IN ABSENCE OF PROOF OF CONSTRUCTION OF ADDITIO NAL FLOORS AND FURTHER IN THE ABSENCE OF PROOF THAT THE MONEY, IS UTILIZED FOR THE CONSTR UCTION OF HOUSE PROPERTY THE INTEREST CLAIM ON THE OVER DRAFT ACCOUNT BEING HELD IN THE J OINT NAMES CANNOT BE ALLOWED U/S.24(B). IN VIEW OF THE ABOVE I CONFIRM THE DISALLOWANCE MAD E BY ASSESSING OFFICER. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. THE CONTENTION OF THE LD. A.R. IS THAT THE LOAN WAS TAKEN DURING THE FINANCIA L YEAR 2005-06 RELEVANT TO ITA NO.138/VIZAG/2012 TUMATI VIJAYA LAKSHMI, VISAKHAPATNAM 3 THE ASSESSMENT YEAR 2006-07 AND THE ASSESSING OFFIC ER WHILE COMPLETING THE ASSESSMENT U/S 2006-07 HAS NOT RAISED ANY OBJECTION WITH REGARD TO EITHER NATURE OF LOAN OR PAYMENT OF INTEREST ON SUCH LOAN AND HAS IN FACT ALLOWED THE INTEREST CLAIMED U/S 24(B) OF THE ACT EXCEPT EX CESS CLAIM OF RS.3,108/-. IT WAS THEREFORE CONTENDED THAT WHEN THE NATURE OF LOA N HAS BEEN ACCEPTED BY THE ASSESSING OFFICER IN THE PRECEDING ASSESSMENT Y EAR WHEN THE LOAN WAS TAKEN AND DEDUCTION TOWARDS INTEREST PAYMENT WAS AL SO ALLOWED BY HIM, INTEREST PAID ON THE SAME LOAN CANNOT BE DISALLOWED IN THE SUBSEQUENT ASSESSMENT YEAR BY TREATING THE LOAN TAKEN AS NOT F OR THE PURPOSE OF HOUSE CONSTRUCTION. THE LD. D.R. ON THE OTHER HAND SUPPO RTED THE ORDER OF THE CIT(A). 5. HAVING CONSIDERED THE SUBMISSIONS OF THE PARTIES , WE ARE OF THE VIEW THAT DISALLOWANCE OF INTEREST PAYMENT IS NOT JUSTIF IED IN THE PRESENT CASE. ON A PERUSAL OF THE ASSESSMENT ORDER PASSED FOR THE AS SESSMENT YEAR 2006-07 U/S 143(3) OF THE ACT CLEARLY INDICATES THAT THE AS SESSING OFFICER HAS NOT ONLY ACCEPTED THE LOAN AS HOUSE BUILDING LOAN BUT HAS AL SO ALLOWED DEDUCTION TOWARDS INTEREST PAYMENT U/S 24(B) OF THE ACT. TH E ASSESSING OFFICER HAVING ACCEPTED THE NATURE AND CHARACTER OF LOAN IN THE PR EVIOUS ASSESSMENT YEAR, HE CANNOT DISPUTE IT IN THE SUBSEQUENT YEAR. IN TH AT VIEW OF THE MATTER, WE HOLD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTI ON U/S 24(B) OF THE ACT OF AN AMOUNT OF RS.2,81,199/- BEING THE INTEREST PAID ON THE HOUSE BUILDING LOAN. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DEL ETE THE ADDITION MADE OF THE AFORESAID AMOUNT. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON 7 TH MAR14 SD/- SD/- (J. SUDHAKAR REDDY) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 7 TH MARCH, 2014 ITA NO.138/VIZAG/2012 TUMATI VIJAYA LAKSHMI, VISAKHAPATNAM 4 COPY TO 1 TUMATI VIJAYA LAKSHMI, D.NO.13-15-8/1, TELEPHONE EXCHANGE ROAD, KURMANNAPALEM, GAJUWAKA 2 ITO WARD-5(2), VISAKHAPATNAM 3 THE CIT, VISAKHAPATNAM 4 THE CIT(A), VISAKHAPATNAM. 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM