Amrit Lal Jain, Sonepat V. ITO, Sonepat

ITA 1912/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97417 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 08-09-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 18-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Assessee Lawyers: K SAMPATH ADV SH RAJAN KUMAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition
• Section: 50C; 2(14); 54

Judgement Text

1 ITA NO. 19 12/DEL/2011 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH:A NEW DELHI BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER & SMT. BEENA PILLAI, JUDICIAL MEMBER I.T.A .NO. 1912/DE L/2011 (ASSESSMENT YEAR-2007- 08) AMRIT LAL JAIN, PROP. M/S MUNSHI RAM ARJUN LAL JAIN & CO., SHOP NO. 2, ANAJ MANDI, SONEPAT. ABNPJ6101F VS ITO, WARD 1, SONEPAT APPELLANT BY SH. K. SAMPATH, ADV. SH. RAJAN KUMAR ADV. RESPONDENT BY SH. K.K. JAISWAL, DR ORDER PER BEENA PILLAI, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE APPELLANT AGAINST T HE ORDER OF THE LD. CIT(A)S- ROHTAK DATED 17.02.2011 FOR A.Y. 2007 -08 ON THE FOLLOWING REVISED GROUNDS: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ACTION OF THE AUTHORITIES BELOW IN PICKING UP FOR ASSESSMENT THE SUBJECT CASE IS ARBITRARY, WI THOUT JURISDICTION AND ERRONEOUS AND MUST BE QUASHED; 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE AUTHORITIES BELOW ERRED IN CONSTRUING C APITAL DATE OF HEARING 08.09.2015 DATE OF PRONOUNCEMENT 23.09.2015 2 ITA NO. 19 12/DEL/2011 GAINS OF RS. 3,37,540/- IN RESPECT OF THE ALLEGED T RANSFER OF A SHORT AT SONEPAT; 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE ADDITION IN A SUM OF RS. 40,003/- ON AC COUNT OF MORTGAGE EXPENSES INCURRED FOR OBTAINING CREDIT FAC ILITIES FOR BUSINESS IS ERRONEOUS, UNWARRANTED AND UNCALLED FOR AND MUST BE QUASHED; 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE ADDITION OF RS. 22,900/- MUST BE QUASHE D AS IT IS BASED ON NO MATERIAL OR EVIDENCE AND IS WHOLLY EXTRANEOUS, SUPERFLUOUS AND UNNECESSARY. 2. BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT I S AN INDIVIDUAL AND DERIVES INCOME FROM TRADING AND COMMISSION AS K ACHA ARTIA BY DEALING IN SARSON, WHEAT AND KHAL ETC. THE APPELLA NT FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 1,65,377/- ON 27/11/2007. THE RETURN WAS PROCESSED U/S 143(1) AND THE CASE WA S PICKED UP FOR SCRUTINY AS PER CBDT ACTION PLAN UNDER CLAUSE (8) O F ITR 4 OF THE GUIDELINES DURING THE FINANCIAL YEAR 2008-09. THE ASSESSMENT PROCEEDINGS WERE COMPLETED BY MAKING AN ADDITION OF RS. 2,87,910/- UNDER THE FOLLOWING HEAD: LONG TERM CAPITAL GAINS RS. 3,37,540/-; MORTGAGE EXPENSES OF RS. 40,000/- AND HOUSEHOLD EXPENSES AMOUNTING TO RS. 22,900/- 3. AGGRIEVED BY THE ORDER PASSED BY THE LD. AO. TH E RESPONDENT APPELLANT WENT INTO APPEAL BEFORE THE LD. CIT(A). 4. THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO AN D UPHELD THE ADDITIONS. 5. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE APP ELLANT IS IN APPEAL BEFORE US. 3 ITA NO. 19 12/DEL/2011 6. GROUND NO.1 : THIS GROUND OF APPEAL HAS BEEN RAISED CHALLENGING THE SELECTION THE APPELLANTS CASE FOR S CRUTINY AS PER CBDTS ACTION PLAN UNDER CLAUSE (8) UNDER GUIDELINE S ISSUED FOR FINANCIAL YEAR 2008-09. WE ARE NOT INCLINED TO INTERFERE WITH THESE GUIDELI NES ISSUED BY THE CBDT AS THE OTHER GROUNDS RAISED BY THE APPELLANT H AS BEEN DEALT BY US ON MERITS. 7. GROUND NO. 2: THE ADDITION IN RESPECT OF CAPITAL GAINS AMOUNTING TO RS. 3,37,450/-. THE LD. AR SUBMITTED THAT THE APPELLANT HAD CLAIMED CAPITAL GAIN LOSS ON SALE OF SHOP PLOT NO.120, NEW ANAJ MANDI SONEPAT WHICH THE APPELLANT HAD PURCHASED FROM M/S. BHAGAT RAM JUG LA L ON 22.02.2001 FOR RS.6,54,500/- WHICH WAS PAID IN THE FOLLOWING MANNER; 22.02.2001 RS. 80,000/- 22.09.2001 RS. 83,625/- 26.09.2001 RS. 4,80,875/- 8. THE INDEXED COST OF THE PLOT WAS CALCULATED BY THE APPELLANT AT RS. 7,16,750/-. THE SAID SHOP PLOT WAS SOLD TO M/S.SHUB HAM ENTERPRISES FOR A SUM OF RS.7 LAKHS ON 15.03.2007, THEREBY CLAIMING A CAPITAL LOSS OF RS.16,750/-. 9. THE LD.AR SUBMITTED THAT NO CONVEYANCE DEED HAS BEEN ENTERED INTO THE PARTIES FOR PURCHASE AND SALE OF THE SHOP PLOT NO.120 AND THAT NO POSSESSION HAS BEEN GIVEN TO EITHER THE APP ELLANT HEREIN OF M/S. SHUBHAM ENTERPRISES. THE OWNER OF THE SHOP PLO T HAS ALWAYS BEEN M/S. BHAGAT RAM JUG LAL. THE LD.AR SUBMITTED T HAT THE LAND 4 ITA NO. 19 12/DEL/2011 WAS ACQUIRED BY THE HARYANA GOVERNMENT FOR ESTABLIS HING THE GRAIN MARKET. THE LD. AR SUBMITS THAT THE SAID PLOT CANNO T BE TRANSFERRED TO ANY OTHER PARTY TILL THE ENTIRE AND FINAL PAYMEN T HAS BEEN MADE AND NOC IS OBTAINED FROM HARYANA MARKET BOARD WHO A LLOTS THE PLOTS. THE LD. AR SUBMITS THAT THE INSTALLMENT PAI D BY THE APPELLANT IN RESPECT OF THE PLOT IS DEPOSITED IN THE NAME OF ORIGINAL ALLOTTEE BEING M/S. BHAGAT RAM JUG LAL AND LEGALLY THE PLOT REMAINS WITH THE ORIGINAL ALLOTTEE AND LEGALLY THE PLOT REMAINS WITH THE ORIGINAL ALLOTTEE. IT IS FURTHER SUBMITTED BY THE LD. AR THAT THE SO C ALLED SALE IS NOT A TRANSFER AS DEFINED U/S 2(47) OF THE ACT. 10. THE APPELLANT SUBMITS THAT THE SAID PLOT WAS G IVEN TO HIM BY THE MARKET COMMITTEE AGAINST A DRAW. THE LD. AR TAKES US THROUGH THE TERMS AND CONDITIONS OF THE ALLOTMENT. CLAUSE (15) OF THE TERMS AND CONDITIONS IS VERY CLEAR IN RESPECT OF THE TITLE OF OWNERSHIP THAT CANNOT BE PERMITTED TO BE TRANSFERRED BEFORE A PERI OD OF FIVE YEARS FROM THE DATE OF ALLOTMENT OF SUCH PLOT. 11. THE LD. AO CALCULATED THE LONG TERM CAPITAL GA IN AS UNDER: 1. PURCHASE PRICE OF PLOT ON 22.2.2001 RS. 6,54,500 (ASSTT. YEAR 2001-02) 2. INDEX COST OF PLOT RS. 654500 X 519 RS. 8,36,660 406 3. SALE PRICE OF PLOT OF 190 SQ. YARDS BY APPLYING AVERAGE SALE RATE @ RS. 6180/- PER SQ. YARDS RS. 11,74,200 LONG TERM CAPITAL GAIN RS. 3,37,540 (1174200 836660) 5 ITA NO. 19 12/DEL/2011 12. AGGRIEVED BY THE ORDER OF THE LD.AO, THE APPEL LANT PREFERRED APPEAL BEFORE THE LD.CIT(A). THE LD. CIT(A) WAS ALS O NOT CONVINCED WITH THE ARGUMENTS AS IN HIS OPINION THE RESPONDENT -APPELLANT IS IN CONSTRUCTED POSSESSION OF THE SAID PLOT. IN VIEW O F THE ABOVE AND SIMILARLY THE CONSTRUCTIVE POSSESSION HAS BEEN TRAN SFERRED TO M/S SHUBHAM ENTERPRISES UPON RECEIPT OF THE SALE CONSID ERATION. HE HELD THAT NOT ENTERING INTO AN AGREEMENT HE IS OF N O CONSEQUENCE IN VIEW OF THE FACTS OF THE CASE. THEREFORE, THE LD. CIT(A) UPHELD THE VIEW OF THE AO AND TREATED THE TRANSFER OF CAPITAL ASSET IN TERMS OF THE PROVISIONS OF SECTION 2(47). 13. THE LD. AR FURTHER SUBMITS THAT AS THERE HAS B EEN NO CONVEYANCE DEED THAT HAS BEEN ENTERED INTO BETWEEN THE APPELLANT AND M/S BHAGAT RAM JHUGLA PROVISIONS OF SECTION 50C OF THE ACT CANNOT BE INVOKED. THE LD. AR PLACES RELIANCE ON T HE DECISION BY MUMBAI TRIBUNAL IN THE CASE OF ATULJI PURANIK VS. I TO 12(1)(I) REPORTED IN (2011) 11 TAXMANN.COM 92. 14. THE LD. DR SUPPORTS THE FINDINGS OF THE AUTHORI TIES BELOW. 15. THE MAJOR CONTENTION PUT FORTH ON BEHALF OF THE APPELLANT IS REGARDING NON-APPLICABILITY OF SECTION 50C TO THE F ACTS OF THE CASE. 16. BEFORE WE PROCEED TO DEAL WITH THE RIVAL CONTEN TION IT IS NECESSARY TO SET THE RECORDS STRAIGHT INASMUCH AS THERE ARE C ERTAIN FACTUAL INCONSISTENCIES RECORDED IN THE ASSESSMENT ORDER. THE FIRST BEING THAT THE APPELLANT WAS NOT ALLOTTED THE PLOT ON OWN ERSHIP BASIS FOR PERPETUITY BUT ONLY OF LEAST BASIS FOR A SMALL PERI OD OF TIME. NONE OF THE AUTHORITIES BELOW HAVE CHOSEN TO CONTROVERT THE ABOVE FACT. NOW WE DECIDE THE CONTROVERSY BEFORE US IN THE LIGHT OF CORRECT AND 6 ITA NO. 19 12/DEL/2011 COMPLETE FACTS AS NOTED ABOVE. THERE IS NO DISPUTE THAT M/S BHAGAT RAM JHUGLAL WAS THE OWNER OF THE PLOT WHICH WAS ACQ UIRED BY THE APPELLANT. FURTHER IT IS ALSO NOT DISPUTED THAT NO AGREEMENT TO TRANSFER THE IMMOVABLE PROPERTY AGAINST THE CONSIDE RATION HAS BEEN ENTERED INTO BETWEEN THE APPELLANT AND M/S BHAGAT R AM JHUGLAL, WHEN THE PLOT WAS PURCHASED. SIMILARLY, WHEN THE P LOT WAS FURTHER SOLD BY THE APPELLANT, NO AGREEMENT HAS BEEN ENTERE D INTO. 17. SECTION 45 CLEARLY PROVIDES THAT ANY PROFITS OR GAI NS ARISING FROM THE TRANSFER OF A CAPITAL ASSET EFFECTED IN THE PRE VIOUS YEAR SHALL, SAVE AS OTHERWISE PROVIDED IN SECTIONS 54 TO 54H, BE CHA RGEABLE TO INCOME-TAX UNDER THE HEAD 'CAPITAL GAINS' AND SHALL BE DEEMED TO BE THE INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSF ER TOOK PLACE. WHAT IS RELEVANT FOR APPLICABILITY OF SECTION 45 IS THE PROFITS OR GAINS ARISING FROM THE TRANSFER OF A CAPITAL ASSET EFFECT ED IN THE PREVIOUS YEAR. IT IS ONLY THE NATURE OF ASSET TRANSFERRED IN THE YEAR WHICH IS TO BE TAKEN INTO CONSIDERATION FOR COMPUTING PROFIT OR GAINS CHARGEABLE TO TAX UNDER THE HEAD 'CAPITAL GAINS'. ONLY THE NAT URE OF THE CAPITAL ASSET SO TRANSFERRED IN THE PREVIOUS YEAR IS TO BE VIEWED DE HORS THE SOURCE FROM WHICH IT WAS ACQUIRED. IF A 'CAPITAL AS SET' AS PER SECTION 2(14) IS PURCHASED OUT OF AGRICULTURAL INCOME, THAT WOULD NOT LOSE ITS CHARACTER OF CAPITAL ASSET NOTWITHSTANDING THE FACT THAT THE INCOME EXEMPT FROM TAX WAS EMPLOYED FOR PURCHASING SUCH CA PITAL ASSET. WHENEVER SUCH RESULTING CAPITAL ASSET IS TRANSFERRE D LEADING TO ANY PROFIT OR GAIN, SUCH AMOUNT SHALL BE CHARGED TO TAX UNDER SECTION 45 OF THE ACT. THE SOLE CRITERIA FOR CONSIDERING WHETH ER THE ASSET TRANSFERRED IS CAPITAL ASSET UNDER SECTION 2(14) OR NOT IS TO CONSIDER 7 ITA NO. 19 12/DEL/2011 THE NATURE OF THE ASSET SO TRANSFERRED IN THE PREVI OUS YEAR AND NOT THE ORIGIN OR THE SOURCE FROM WHICH SUCH ASSET CAME TO BE ACQUIRED. ADVERTING TO THE FACTS OF THE INSTANT CASE, ONCE TH E ASSESSEE ACQUIRED RIGHTS IN THE PLOT. 18. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E APPELLANT CONTENDED THAT THE COST OF ACQUISITION OF THE PLOT WAS RS. 3000/- PER SQ.YARD, BY APPLYING MARKET RATE OF THE PLOT AT RS.3950 PER SQ. MTR. ON THE DATE OF TRANSFER. THE ASSESSING OFFICER , ON THE OTHER HAND, CAME TO THE CONCLUSION THAT THE SALE PRICE WA S LIABLE TO BE TAKEN AT RS. 6,180/- PER SQ. YARDS 19. THE APPELLANT ARGUED THAT THE MARKET VALUE OF T HE PLOT OF LAND ON THE DATE OF ALLOTMENT SHOULD BE TAKEN AS THE COS T OF ACQUISITION. FROM THE FACTUAL MATRIX OF THE CASE, IT IS NOTED TH AT THE APPELLANT WAS ALLOTTED RIGHTS IN THE SHOP PLOT ON 22.02.2001. 20. THE ASSESSING OFFICER ADOPTED THE VALUE OF SHOP PLOT SOLD ON 15- 03-2007 AT RS. 6180 PER SQ.YARD., BY APPLYING THE PROVISIONS OF SECTION 50C FOR THE PURPOSES OF COMPUTING CAPITAL G AIN. HIS VIEW WAS BASED ON THE ASSESSEE'S SUBMISSION THAT THE MAR KET RATE PREVAILING FOR LAND DURING 1-4-2006 TO 31-12-2007 W AS RS. V PER SQ. METER. THE COMMISSIONER (APPEALS) UPHELD THE ACTION OF THE ASSESSING OFFICER ON THIS SCORE. 21. ON GOING THROUGH THE PROVISION OF SECTION 50C( 1), IT TRANSPIRES THAT WHERE THE FULL VALUE OF CONSIDERATION SHOWN TO HAVE BEEN RECEIVED OR ACCRUING ON THE TRANSFER OF AN ASSET, B EING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY STAMP VALUATION AUTHORITY, THE VALUE SO ADOPTED ETC. 8 ITA NO. 19 12/DEL/2011 SHALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER. THIS SECTION HAS BEEN INSERTED BY THE FINANCE ACT, 2002 WITH EFFECT FROM 1-4-2003 WITH A VIEW TO SUBSTITUTE THE DECLARED FUL L VALUE OF CONSIDERATION IN RESPECT OF LAND OR BUILDING OR BOT H TRANSFERRED BY THE ASSESSEE WITH THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY STAMP VALUATION AUTHORITY. BUT FOR THIS PROVISION, THERE IS NOTHING IN THE ACT, BY WHICH THE FULL VALUE OF A CONSIDERAT ION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER OF LAND OR BUILDIN G OR BOTH IS DEEMED TO BE ANY AMOUNT OTHER THAN THAT ACTUALLY RE CEIVED. FROM THE LANGUAGE OF SUB-SECTION (1), IT IS CLEAR THAT T HE VALUE OF LAND OR BUILDING OR BOTH ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY SHALL, FOR THE PURPOSE OF SECTI ON 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH A TRANSFER. TWO THINGS ARE NOTICEABL E FROM THIS PROVISION. FIRSTLY, IT IS A DEEMING PROVISION AND S ECONDLY, IT EXTENDS ONLY TO LAND OR BUILDING OR BOTH. IT IS MANIFEST TH AT A DEEMING PROVISION HAS BEEN INCORPORATED TO SUBSTITUTE THE V ALUE ADOPTED OR ASSESSED OR ASSESSABLE BY STAMP VALUATION AUTHORITY IN PLACE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T RANSFER, IN CASE THE LATTER IS LOWER THAN THE FORMER. IT IS FURTHER RELEVANT TO NOTE THAT THE MANDATE OF SECTION 50C EXTENDS ONLY TO A CAPITA L ASSET WHICH IS 'LAND OR BUILDING OR BOTH'. IT, THEREFORE, FOLLOWS THAT ONLY IF A CAPITAL ASSET BEING LAND OR BUILDING OR BOTH IS TRANSFERRED AND THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSAB LE BY THE STAMP 9 ITA NO. 19 12/DEL/2011 VALUATION AUTHORITY, THE DEEMING FICTION UNDER SUB- SECTION (1) SHALL BE ACTIVATED TO SUBSTITUTE SUCH ADOPTED OR ASSESSED OR ASSESSABLE VALUE AS FULL VALUE OF CONSIDERATION RECEIVED OR AC CRUING AS A RESULT OF SUCH TRANSFER IN THE GIVEN SITUATION. IT IS A SE TTLED LEGAL PROPOSITION THAT A DEEMING PROVISION CANNOT BE EXTE NDED BEYOND THE PURPOSE FOR WHICH IT IS ENACTED. 22. IT IS THUS CLEAR THAT A DEEMING PROVISION CAN BE APPLIED ONLY IN RESPECT OF THE SITUATION SPECIFICALLY GIVEN AND HEN CE CANNOT GO BEYOND THE EXPLICIT MANDATE OF THE SECTION. TURNING TO SECTION 50C, IT IS SEEN THAT THE DEEMING FICTION OF SUBSTITUTING ADOPTED OR ASSESSED OR ASSESSABLE VALUE BY THE STAMP VALUATION AUTHORITY AS FULL VALUE OF CONSIDERATION IS APPLICABLE ONLY IN R ESPECT OF 'LAND OR BUILDING OR BOTH'. IF THE CAPITAL ASSET UNDER TRANS FER CANNOT BE DESCRIBED AS 'LAND OR BUILDING OR BOTH', THEN SECTI ON 50C WILL CEASE TO APPLY. FROM THE FACTS OF THIS CASE NARRATED ABOV E, IT IS SEEN THAT THE ASSESSEE WAS ALLOTTED LEASE RIGHT IN THE PLOT F OR A PERIOD OF SIXTY YEARS, WHICH RIGHT WAS FURTHER ASSIGNED TO 'P' IN T HE YEAR IN QUESTION. IT IS AXIOMATIC THAT THE LEASE RIGHT IN A SHOP PLOT NEITHER IS 'LAND OR BUILDING OR BOTH' AS SUCH, NOR CAN BE INCL UDED WITHIN THE SCOPE OF 'LAND OR BUILDING OR BOTH'. 23. CONSIDERING THE FACT THAT DEALING WITH SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAIN CASES UNDER SECTI ON 50C, WHICH IS A DEEMING PROVISION, THE FICTION CREATED IN THIS SE CTION CANNOT BE EXTENDED TO ANY ASSET OTHER THAN THOSE SPECIFICALLY PROVIDED THEREIN. AS SECTION 50C APPLIES ONLY TO A CAPITAL ASSET, BEI NG LAND OR BUILDING OR BOTH, IT CANNOT BE MADE APPLICABLE TO L EASE RIGHTS IN A 10 ITA NO. 1 912/DEL/2011 LAND. AS THE ASSESSEE TRANSFERRED LEASE RIGHT FOR S IXTY YEARS IN THE PLOT AND NOT LAND ITSELF, THE PROVISIONS OF SECTION 50C CANNOT BE INVOKED. 24. IN VIEW OF THE ABOVE FINDINGS, WE ALLOW GROUND NO. 2 RAISED BY THE APPELLANT. 25. GROUND NO.3: THIS GROUND IS IN RESPECT OF THE ADDITION MADE IN RESPECT OF MORTGAGE EXPENSES INCURRED FOR OBTAIN ING CREDIT FACILITIES FOR BUSINESS PURPOSES. IT IS SUBMITTED BY THE LD.AR THAT THE APPELLANT HAD MORTGAGED THE SHOP PLOT WITH URBAN CO-OPERATIVE BANK, SONIPAT FOR AVAILING THE CREDIT LIMIT FOR BUSINESS. THE APPELLANT IN THIS PR OCESS HAD INCURRED AN EXPENSES OF RS.40,003/- TOWARDS STAMP DUTY AND R EGISTRATION, THE APPELLANT HAD CLAIMED THE SAME AS BUSINESS EXP ENSES. 26. THE LD. AO DISALLOWED THE EXPENSES AS ACCORDING TO THE LD. AO THESES EXPENSES HAD NOTHING TO DO WITH THE BUSINESS OF THE APPELLANT. 27. ON PERUSAL OF THE PROFIT AND LOSS ACCOUNT, IT IS OBSERVED THAT THE APPELLANT HAS TAKEN LOANS. THE APPELLANT FAIRLY SUBMITS THAT SOME OF THE LOANS HAVE BEEN TAKEN TO INVEST IN PROP ERTIES RELATING TO BUSINESS. THE LD.AR SUBMITS THAT THE LOAN FROM THE URBAN CO- OPERATIVE BANK, SONIPAT HAS BEEN TAKEN FOR AVAILING FUNDS FROM THE BANK FOR BUSINESS. HOWEVER THE LD.AO HAS NOT ESTAB LISHED ANY NEXUS BETWEEN THE LOANS TAKEN WITH THE BUSINESS ACT IVITY CARRIED ON BY THE APPELLANT. 11 ITA NO. 1 912/DEL/2011 28. WE ARE THEREFORE INCLINED TO SEND THIS ISSUE B ACK TO THE FILE OF LD.AO FOR ESTABLISHING NEXUS IF ANY AND THEN TO CON SIDER THE CLAIM OF THE APPELLANT. 29. GROUND NO. 4: THIS GROUND PERTAINS TO THE ADDITION IN RESPECT OF HOUSEHOLD EXPENSES. THE LD.AR SUBMITS THIS GROUND TO BE NOT PRESSED. ACCORDINGLY WE DISMISS THIS GROUND OF APPEAL. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE HAS BEEN PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 23.09. 2015 SD/- SD/- (INTURI RAMA RAO) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23.09.2015 *KAVITA, P.S. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 12 ITA NO. 1 912/DEL/2011 DATE 1. DRAFT DICTATED ON 09.09.2015/10.09.2015/21.9.15 2. DRAFT PLACED BEFORE AUTHOR 11.09.2015/21.9.15 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 22.9.15 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 22.9.15 5. APPROVED DRAFT COMES TO THE SR.PS/PS 23.9.15 6. KEPT FOR PRONOUNCEMENT ON 23.9.15 7. FILE SENT TO THE BENCH CLERK 24.9.15 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.