Smt. Renu Gupta, Muzaffarnagar V. ITO, Muzaffarnagar

ITA 2078/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7092 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 19-12-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 18-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K. SAMPAT
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-I, NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER ITA NO.2078/DEL/2016 ASSESSMENT YEAR : 2008-09 RENU GUPTA, 247, NORTH CIVIL LINES, MUZAFFARNAGAR. VS. ITO, WARD- 1(1), MUZAFFARNAGAR. PAN : AATPG 8502 E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. SAMPAT, ADV. RESPONDENT BY : SHRI RAJESH KUMAR, SR.DR DATE OF HEARING : 19-12-2016 DATE OF PRONOUNCEMENT : 10-01-2017 O R D E R PER S.V. MEHROTRA, A.M : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 29.01.2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS), MUZAFFARNAGAR, U/S 147/143(3) OF THE INCOME TAX ACT , 1961 (IN SHORT THE ACT) RELATING TO ASSESSMENT YEAR 2008-09. THE ASS ESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE FOLLOWING ACTIONS OF THE AS SESSING OFFICER: 1. IN INITIATING PROCEEDINGS U/S 147 OF THE INCOME-TAX ACT, 1961 (THE ACT) WHICH WAS WITHOUT JURISDICTION AND IS BASED ON VAGUE AND INVALID REASONS; 2. IN MAKING AN ADDITION IN A SUM OF RS.6,95,506/- ON ACCOUNT OF INTEREST PAID BY TREATING THE SAME AS NOT RELATING TO THE INCOME EARNED. BOTH THE ABOVE ACTIONS BEING ARBITRARY, ERRONEOUS A ND UNJUST MUST BE QUASHED WITH DIRECTIONS FOR RELIEF. 2 ITA NO.2078/DEL/2016 2. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSE SSEE HAS NOT PRESSED THE GROUND OF APPEAL NO.1 AND THE SAME IS BEING DISMISS ED AS NOT PRESSED. 3. BRIEF FACTS OF THE CASE ARE THAT NOTICE U/S 148 WAS ISSUED ON 25.05.2012, IN RESPONSE TO WHICH, ASSESSEE FILED RE TURN OF INCOME DECLARING TOTAL INCOME OF RS.1,12,951/-. THE ASSESSING OFFIC ER DETERMINED THE TOTAL INCOME AT RS.27,15,707/-, INTER-ALIA, DISALLOWING A SUM OF RS.8,45,506/- OBSERVING AS UNDER :- (II) THE ASSESSEE HAD CLAIMED DEDUCTION OF RS.8455 06/- BEING INTEREST PAID. THE INTEREST PAID, IF ANY CAN ONLY BE DEDUCTED FROM TAXABLE INCOME FROM SAID ASSET. HENCE, DEDUCTION OF RS.845506/- IS DISALLOW ED. FURTHER THE FUNDS AS SHOWN TO HAVE BEEN RECEIVED AS LOAN HAS BEEN HELD A S BELONGING TO THE ASSESSEE BEING NOT PROVED. THE ASSESSEE HAS NOT PROVED NEXU S OF SAID LOANS WITH ANY EARNING SOURCE OF INCOME. RS.845506.00 4. LD. CIT(A) ALLOWED THE INTEREST TO THE EXTENT OF RS.1,50,000/- U/S 24 OF THE ACT. 5. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS IN THE BUSINESS OF PURCHASING PROPERTY AND RENTING THE SAM E ON RENT. THEREFORE, THE INTEREST PAID BY ASSESSEE IS ALLOWABLE U/S 36(1 )(III) OF THE ACT AND NOT U/S 24, AS THE ASSESSEE WAS CARRYING ON BUSINESS. HE R ELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CHENNAI PR OPERTIES AND INVESTMENTS LTD. VS. CIT (2015) 373 ITR 673 (SC). HE SUBMITTED THAT THE MATTER CAN BE RESTORED BACK TO THE FILE OF THE ASSE SSING OFFICER TO EXAMINE THE ASSESSEES CONTENTIONS IN THE LIGHT OF DECISION IN CASE OF CHENNAI 3 ITA NO.2078/DEL/2016 PROPERTIES AND INVESTMENTS LTD. (SUPRA). LD. DR DI D NOT OBJECT TO ASSESSEES REQUEST. 6. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND HAVE PERUSED THE RECORD OF THE CASE. AS AGREED BY BOTH PARTIES, I RESTORE THIS MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THIS ISSUE DE NOVO IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CHENNAI PROPERTIES AND INVESTMENTS LTD. (SUPRA). 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF JANUARY, 2017. SD/- (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED : 10-01-2017. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI