Prittin Patel, Vadodara V. The DCIT, International Circle, Vadodara

ITA 1533/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8123 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2013-2014
• Appeal Filed On: 20-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: T P HEMANI

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD : , , BEFORE SHRI PRAMOD KUMAR ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO.1533/AHD/2017 ( / ASSESSMENT YEAR : 2013-14) PRITTIN PATEL C/O. JRS PATEL & CO. 3 RD FLOOR, TNW BUSINESS CENTRE ABOVE MCDONALD NEAR MANISHA CROSS ROAD OLD PADRA ROAD,BARODA 390 007 / VS. THE DY.CIT INTERNATIONAL TAXATION RACE COURSE, BARODA ' ./ ./ PAN/GIR NO. : AISPP 5904 G ( '% / APPELLANT ) .. ( &'% / RESPONDENT ) '% ' / APPELLANT BY : SHRI T.P. HEMANI, AR &'% ( ' / RESPONDENT BY : SHRI V.K. SINGH, SR.DR ) * ( + / DATE OF HEARING 06/06/2018 ,-. ( + / DATE OF PRONOUNCEMENT 15 / 0 6 /201 8 / O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL HAS BEEN FILED BEFORE U S BY THE ASSESSEE AGAINST THE ORDER DATED 28.04.2017 PASSED BY THE COMMISSIONER OF INCO ME TAX(APPEALS)13, AHMEDABAD [LD.CIT(A) IN SHORT] FOR ASSESSMENT YEAR (AY) 2013 -14 ARISING OUT OF THE ORDER DATED 22.03.2016 PASSED BY THE DCIT, INTERNATIONAL TAXAT ION, BARODA. 2. THE BRIEF FACTS OF THE CASE IS THIS THAT THE AS SESSEE IS EARNING RENTAL INCOME OF RS.25,20,000/- JOINTLY ALONG WITH HER MOTHER FROM A HOUSE PROPERTY SITUATED AT MUMBAI. A SUM OF RS.1.81 CRORES WAS BORROWED FROM HONG KONG AND SHANGHAI BANK JOINTLY WITH HER MOTHER WITH 50:50 PROPORTION AGAINST THE SAID HOUSE PROPERTY. THE ASSESSEE HAS PAID INTEREST EXPENDITURE TO HSBC BANK TO THE TUNE OF RS.10,57,38 0/- AND CLAIMED FOR DEDUCTION OF SUCH INTEREST EXPENDITURE U/S.24 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT'). - 2 - ITA NO.1 533/AHD/2017 PRITTIN PATEL VS.DCIT ASST.YEAR 2013-14 ON THE OTHER HAND, OUT OF HER OWN SHARE OF BORROWE D AMOUNT FROM HSBC BANK, THE ASSESSEE HAS GIVEN A LOAN OF RS.85,00,000/- TO DEEGEE SOFTWA RE PRIVATE LIMITED ON 03.02.2012. THE ASSESSEE DURING THE YEAR AND EARLIER YEARS RECEIVED AN INTEREST OF RS.24,47,297/- ON THE BASIS OF SUCH LOAN GIVEN TO IT. THE SAME IS CHARGED TO T AX UNDER THE HEAD INCOME FROM OTHER SOURCES. THE MOMENT THE ASSESSEE UNDERSTOOD THAT AN INADVERTENT MISTAKE HAS BEEN MADE IN COMPUTING THE INCOME OF THE ASSESSEE, WHERE THE INT EREST WAS WRONGLY CLAIMED U/S.24(B) OF THE ACT INSTEAD OF CLAIMING IT U/S.57 OF THE ACT, THE ASSESSEE MADE A REQUEST BEFORE THE ASSESSING OFFICER (AO) ON 23.03.2016 ADMITTING SUCH MISTAKE PRAYED FOR WITHDRAWING THE DEDUCTION OF INTEREST EXPENDITURE OF RS.10,57,380/- INADVERTENTLY MADE U/S.24 OF THE ACT AND REQUESTED TO ALLOW THE SAME AS DEDUCTION U/S.57 OF THE ACT. THE CLARIFICATION IN RESPECT OF SUCH MODIFICATION OF CLAIM GIVEN BY THE ASSESSEE IN THE SAID LETTER IS AS FOLLOWS:- AT THE OUTSET, I WOULD LIKE TO CLARIFY THAT THROUG H INADVERTENT MISTAKE, I HAVE CLAIMED INTEREST OF RS.10,57,380/- ON LOAN OBTAINED FROM HSBC BANK A S DEDUCTION UNDER THE HEAD INCOME FROM HOUSE PROPERTY. ACTUALLY, THE SAID INTEREST EXPENDITURE IS ELIGIBLE FOR DEDUCTION U/S.57 OF THE ACT AND NOT U/S.24 OF THE ACT. HENCE, I WIS H TO WITHDRAW MY CLAIM OF DEDUCTION U/S.24 OF THE ACT AND REQUEST YOU TO ALLOW CLAIM U/S.57 OF THE ACT. JUSTIFICATION FOR CLAIM OF INTEREST EXPENDITURE IS AS UNDER. DURING THE YEAR UNDER REVIEW, I ALONG WITH MY MOTHE R MANDA J.PATEL HAD BORROWED RS.1.81 CRORE FROM HSBC BANK AGAINST OUR OWN FLAT NO31/32A AT MUMBAI. WE HAD BORROWED IN THE PROPORTION OF 50:50. OUT OF MY SHARE OF BORROWING I.E. RS.90,50,000/- ON 03.02.2012, I HAD GIVEN LOAN OF RS.85,00,000/- TO DEEGEE SOFTWARE PRI VATE LIMITED HOLDING PERMANENT ACCOUNT NO.AABCD 5971 F. ON LOAN GIVEN DURING THE YEAR UNDER REVIEW AND ALSO OUT OF EARLIER YEAR LOANS, I HAVE EARNED RS.24,47,297/- FROM DEEGEE SOFTWARE PRIVATE LIMITED . AS THERE IS DIRECT NEXUS AMONG BORROWING MADE FROM HSBC BANK AND LOAN GIVEN TO DEE GEE SOFTWARE PRIVATE LIMITED, I WISH TO CLARIFY THAT INTEREST EXPENDITURE OF RS.10,57,38 0/- SHOULD BE ALLOWABLE AS DEDUCTION U/S.57 OF THE ACT FROM INTEREST INCOME OF RS.24,47,297/-. 3. THE AO, HOWEVER, NOT ACCEDED TO THE PRAYER MADE BY THE ASSESSEE AGAINST WHICH APPEAL WAS PREFERRED. THE LD.CIT(A) IN THE A PPELLATE PROCEEDINGS DID NOT CONSIDER THE REVISED CLAIM MADE BY THE ASSESSEE SINCE THE SAME W AS MADE AFTER THE COMPLETION OF THE ASSESSMENT ORDER ON 22.03.2016. THE LD.CIT(A) THUS DISMISSED THE APPEAL PREFERRED BY THE ASSESSEE AND HENCE THE INSTANT APPEAL BEFORE US. - 3 - ITA NO.1 533/AHD/2017 PRITTIN PATEL VS.DCIT ASST.YEAR 2013-14 4. THE LD.REPRESENTATIVE OF THE ASSESSEE, AT THE T IME OF HEARING OF THE MATTER, SUBMITTED BEFORE US THAT IN SPITE OF REQUEST MADE BEFORE BOTH THE AUTHORITIES BELOW FOR RE- COMPUTATION OF CORRECT INCOME ON THE BASIS OF THE A DDITIONAL CLAIM MADE BY THE ASSESSEE, THE SAME WAS NOT CONSIDERED. THE EVIDENCE SUPPORTING SUCH CLAIM WAS ALSO NOT TAKEN INTO CONSIDERATION AND HENCE PRAYER WAS MADE FOR RE-EXA MINATION OF THE ISSUE OF PERMITTING HIM TO WITHDRAW THE DEDUCTION OF INTEREST EXPENDITURE O F RS.10,57,380/- INADVERTENTLY CLAIMED U/S.24 OF THE ACT AND TO ALLOW THE SAME AS DEDUCTIO N U/S.57 OF THE ACT SINCE THERE IS DIRECT NEXUS BETWEEN THE INTEREST EARNED OF RS.24,47,297/- AND INTEREST EXPENDITURE INCURRED OF RS.10,57,380/-. THE LD.AR RELIED UPON THE JUDGEME NT PASSED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE MATTER OF CHANDRAKANT J.PATEL VS. V.N.SRIVASTAVA 339 ITR 310 (GUJ.) AND ALSO THE JUDGEMENT PASSED IN THE MATTER OF S.R.KOSH TI VS. CIT (2005) 276 ITR 165 IN SUPPORT OF HIS REVISED CLAIM. 5. ON THE OTHER HAND, THE LD.DR RELIED UPON THE ORD ERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE LD.REPRESENTATIVES OF THE RES PECTIVE PARTIES. WE HAVE PERUSED THE RELEVANT MATERIALS ON RECORD. WE HAVE ALSO GONE THROUGH THE JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CH ANDRAKANT J. PATEL(SUPRA) WHERE IT WAS HELD AS FOLLOWS:- . MERELY BECAUSE IN THE ORIGINAL RETURN FILED BY HIM THE PETITIONER HAS SHOWN CERTAIN AMOUNT TO BE HIS INCOME, DOES NOT MEAN THAT THE SAI D ERROR CANNOT BE RECTIFIED BY THE RESPONDENT. .. IF AN ASSESSEE, UNDER A MISTAKE, MISCONCEPTION OR ON NOT BEING PROPERLY INSTRUCTED, IS OVER-ASSESSED, THE AUTHORIT IES UNDER THE ACT ARE REQUIRED TO ASSIST HIM AND ENSURE THAT ONLY LEGITIMATE TAXES DUE ARE COLLE CTED. IN THE MATTER OF S.R.KOSHTI VS. CIT (2005) 276 ITR 165, THE HONBLE JURISDICTIONAL HIGH COURT WHILE ALLOWING THE MATTER IN FAVOUR OF THE ASSESSEE OBSERVED AS FOLLOWS:- .REGARDLESS OF WHETHER THE OVER-ASSESSMENT IS AS A RESULT OF THE ASSESSEES OWN MISTAKE OR OTHERWISE, THE COMMISSIONER HAS THE POWE R TO CORRECT SUCH AN ASSESSMENT - 4 - ITA NO.1 533/AHD/2017 PRITTIN PATEL VS.DCIT ASST.YEAR 2013-14 UNDER SECTION 264(1) OF THE ACT. IF THE COMMISSION ER REFUSES TO GIVE RELIEF TO THE ASSESSEE, HE WOULD BE ACTING DE HORS THE POWERS UND ER THE ACT AND, THEREFORE, IS DUTY- BOUND TO GIVE RELIEF TO AN ASSESSEE, WHERE DUE, IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 7. WE FIND THAT THE FACTS OF THE CASE IN HAND IS I DENTICAL TO THAT OF THE ASSESSEE DEALT IN THE AFORESAID JUDGEMENT. IN THE INSTANT CASE, BOTH THE AUTHORITIES BELOW FAILED TO PERFORM THE STATUTORY DUTIES IN CONSIDERING THE REVISED CLA IM MADE BY THE ASSESSEE AS OUGHT TO HAVE BEEN DONE BY THEM FOR COMPUTING THE CORRECT ASSESSM ENT OF THE INCOME AS THE ALLOWABILITY OF CLAIM WAS REQUIRED TO BE ADJUDICATED ON MERITS. THE DUTIES OF THE AUTHORITIES BELOW IN RESPECT TO THE ISSUE IN HAND HAVE ALSO BEEN ASCERTA INED BY THE RATIO OF THE JUDGEMENTS CITED ABOVE WHICH WAS ADMITTEDLY NOT PERFORMED BY THEM. WE, THEREFORE, CONSIDER IT FAIR AND PROPER AND IN THE INTEREST OF JUSTICE TO SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON THE ISSUE IN DISPUTE AND RESTORE THE MATTER TO THE FILE OF TH E AO TO DECIDE THE SAME AFRESH AFTER GIVING THE ASSESSEE A PROPER OPPORTUNITY OF HEARING AND UP ON TAKING INTO CONSIDERATION OF THE ENTIRE EVIDENCE ALREADY AVAILABLE ON RECORD AS WELL AS OTH ER DOCUMENTARY EVIDENCE WHICH THE ASSESSEE MAY CHOOSE TO FILE IN SUPPORT OF THE CLAI M. THUS, THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 15/ 06/2018 SD/- SD/- ( ) ( ) ( PRAMOD KUMAR ) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 15/ 06/2018 0+..) , .)../ T.C. NAIR, SR. PS - 5 - ITA NO.1 533/AHD/2017 PRITTIN PATEL VS.DCIT ASST.YEAR 2013-14 !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &'% / THE RESPONDENT. 3. 12 3 / CONCERNED CIT 4. 3 ( ) / THE CIT(A)-13, AHMEDABAD 5. 67 8 )2 , + 2 . , 1 / DR, ITAT, AHMEDABAD 6. 8 :; < * / GUARD FILE. / BY ORDER, // & 6 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 8/13.6.18(DICTATION-PAD 12+ 7PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 11/14.6.18 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.15.6.18 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 15.6.18 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER