Smt. Dipaben Maulikkumar Patel, Mehsana V. The Income Tax Officer, Ward-1, Mehsana

ITA 2096/AHD/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0987 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-09-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 19-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NK GOEL
• Keywords: Principle of natural justice; Initiation of penalty proceedings; TDS; Rule 8D; Set aside
• Section: 143(3); 14A; 201; 13; 56; 12

Judgement Text

PAGE 1 OF 10 , IN THE INCOME TAX APPELLATE TRIBUNAL , SMC BENCH, AHMEDABAD BEFORE , SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND MS . MADHUMITA ROY , JUDICIAL MEMBER ./ ITA NO S . 2096 - 2097/AHD/2017 / ASSTT. YEAR S : (2009 - 10 & 2014 - 15) SMT. DIPABEN MAULIKKUMAR PATEL , OPP. UMIYA SHOPPING CENTRE , HIGHWAY , MEHSAN - 384002 . PAN: AHLPP2990E VS . I.T .O , WARD - 1 , MEHSANA . (APPLICANT) ( RESPON D ENT ) ASSESSEE BY : SHRI ANIL KSHATRIYA , A.R REVENUE BY : SHRI N.K. GOEL , SR . DR / DATE OF HEARING : 23 / 09 / 201 9 / DATE OF PRONOUNCEMENT: 17 /12 /2 01 9 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE SEPARATE ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) , GANDHINAGAR, [LD. CIT(A) IN SHORT] , OF EVEN DATED 19/ 07 /2017 ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S. 143(3) OF THE INCOME TAX ACT, 1961 ( HERE - IN - AFTER REFERRED TO AS 'THE ACT') DATED 19 / 08 /2016 & 12/09 /2016 RELEVANT TO ASSESSMENT YEARS (A.YS) 2009 - 10 & 2014 - 15 RESPECTIVELY. FIRST, WE TAKE UP ITA NO. 2096/AHD/2017 AN APPEAL BY THE ASSESSEE ASSESSMENT YEAR 2009 - 10. THE ASSES SEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE IMPUGNED APPELLATE ORDER IS PASSED IN BREACH OF THE PRINCIPLES OF NATURAL JUSTICE AND BEING AGAINST THE BASIC OF CONCEPT OF FAIRNESS; THE SAME IS BAD IN LAW, ILLEGAL AND SHOULD BE QUASHED. ITA NO S.2096 - 2097/AHD/2017 ASSTT. YEAR S (2009 - 10 & 2014 - 15) PAGE 2 OF 10 2. ON FACTS AND IN LAW AS WELL AS IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT (A) HAS GROSSLY ERRED IN UPHOLDING DISALLOWANCE OF RS.2,54,566/ - U/S 24 OF THE ACT MADE BY THE A.O. WHEN THE SAME IS NOT WARRANTED. 3. WITHOUT PREJUDICE, ON FACTS AND IN LAW AS WELL AS IN THE CIR CUMSTANCES OF THE CASE, THE LD.CIT(A) HAS GROSSLY ERRED IN IGNORING / NOT ADJUDICATING THE SPECIFIC GROUND NO.3 RELATING TO REJECTION OF DEDUCTION OF RS.1,62,000/ - U/S 24(B) OF THE ACT AGAINST INCOME UNDER THE' HEAD INCOME FROM HOUSE PROPERTY', WHEN HE OUG HT TO HAVE DECIDED THE SAME INDEPENDENTLY. 4. ON FACTS AND IN LAW AS WELL AS IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT (A) HAS GROSSLY ERRED IN REJECTING ASSESSEE'S GROUND OF APPEAL ON INITIATION OF PENALTY PROCEEDINGS U/S 271(L)(C) OF THE ACT WHEN HE OUG HT TO HAVE ADJUDICATED AND DECIDED INDEPENDENTLY. 2. T HE ISSUE RAISED IN GROUND NO. 1 IS GENERAL AND THE ISSUE RAISED IN GROUND NO. 4 IS PREMATURE TO DECIDE. THEREFORE WE DISMISS BOTH THE GROUNDS OF APPEAL OF THE ASSESSEE. 3. THE INTERCONNECTED ISSUE R AISED BY THE ASSESSEE IN GROUND NO. 2 AND 3 IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ORDER OF THE AO BY REJECTING THE CLAI M OF THE ASSESSEE FOR 4,16,566/ - UNDER SECTION 24(A) OF THE ACT FOR 2,54,566.00 AND FURTHER NOT ALLOWING THE DEDUCTION UN DER SECTION 24(B) OF THE ACT FOR 1,62,000.00 ON ACCOUNT OF INTEREST EXPENSES. 4 . THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL AND DERIVING HER INCOME UNDER THE HEAD HOUSE PROPERTY AND SALARY. THE ASSESSEE IN THE YEAR UND ER CONSIDERATION HAS DECLARE D GROSS RENTAL INCOME OF 11,55, 467 / - AND ACCORDINGLY CLAIMED THE DEDUCTION UNDER SECTION 24(A) OF THE ACT FOR 3, 46 , 640 / - BEING 30% OF THE GROSS RENTAL INCOME. 5 . HOWEVER, THE AO DURING THE ASSESSMENT PROCEEDINGS FOUND THAT THE AMOUNT OF GROSS RENTAL INCOME HAS TWO COMPONENTS NAMELY RENT FR OM THE LET OUT PROPERTY OF 3,0 6, 91 4.00 AND THE BALANCE AMOUNT OF 8,48,553.00 REPRESENTING THE ADDITIONAL SERVICES RENDERED BY THE ASSESSEE TO THE TENANTS. ACCORDINGLY, THE AO WAS OF T HE VIEW THAT THE ASSESSEE IS NOT ENTITLED FOR THE STANDARD SECTION ITA NO S.2096 - 2097/AHD/2017 ASSTT. YEAR S (2009 - 10 & 2014 - 15) PAGE 3 OF 10 SPECIFIED UNDER SECTION 24(A) OF THE ACT IN RESPECT OF THE ADDITIONAL INCOME RECEIVED BY THE ASSESSEE FOR THE SERVICES RENDERED TO THE TENANTS. ACCORDINGLY HE WORKED OUT THE AMOUNT OF STAND ARD DEDUCTION CLAIMED BY THE ASSESSEE ATTRIBUTABLE TO SUCH SERVICES FOR 2,54,566.00 AND DISALLOWED THE SAME. 5 .1 THE AO ALSO NOTICED THAT THE SIMILAR CLAIM MADE BY THE ASS ESSEE IN THE ASSESSMENT YEAR 20 13 - 14 WAS ALSO DISALLOWED AND ADDED BACK TO THE TO TAL INCOME OF THE ASSESSEE. IN VIEW OF THE ABOVE THE AO DISALLOWED THE CLAIM OF THE ASSESSEE FOR 2,54,566.00 AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A). 6 . THE ASS ESSEE BEFORE THE LEARNED CIT (A) CLAIMED THAT THE INCOME RECEIVED FROM THE TENANTS FOR PROVIDING THE ADDITIONAL SERVICES IS PART AND PARCEL OF THE RENTAL INCOME AND THEREFORE HE IS ENTITLED FOR THE STANDARD DEDUCTION PROVIDED UNDER SECTION 24(A) OF THE ACT . 6 .1 WITHOUT PREJUDICE TO THE ABOVE, THE ASSESSEE ALSO CLAIMED THAT SHE HAS INCURRED INTEREST EXPENSE ON THE BORROWED FUND USED I N THE IMPUGNED PROPERTIES WHERE FROM SHE IS RECEIVING THE RENTAL INCOME. ACCORDINGLY, THE ASSESSEE CLAIMED THAT SHE IS ENTITL ED FOR THE DEDUCTION ON ACCOUNT OF SUCH INTEREST UNDER SECTION 24(B) OF THE ACT. 6 .2 HOWEVER, THE LEARNED CIT (A) REJECTED THE CLAIM OF THE ASSESSEE REPRESENTING THE STANDARD DEDUCTION UNDER SECTION 24(A) OF THE ACT FOR 2,54,566.00 AND CONFIRMED THE ORDER OF THE AO. 6 .3 THE LEARNED CIT (A) ALSO OBSERVED THAT HIS PREDECESSOR HAS ALSO RE JECTED THE APPEAL OF THE ASSESSEE PERTAINING TO THE ASSESSMENT YEAR 2013 - 14 BY DENYING ITA NO S.2096 - 2097/AHD/2017 ASSTT. YEAR S (2009 - 10 & 2014 - 15) PAGE 4 OF 10 THE STANDARD DEDUCTION CLAIMED UNDER SECTION 24(A) OF THE ACT IN RESPECT OF THE INCOME REPRESENTING THE SERVICES RENDERED TO THE TENANTS. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) THE ASSESSEE IS IN APPEAL BEFORE US. 7 . THE LEARNED AR, AT THE OUTSET, BEFORE US SUBMITTED THAT THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2013 - 14 BEARING ITA NO. 1936/AHD/2016 V IDE ORDER DATED 17 JULY 20 18 HAS DECIDED THE ISSUE AGAINST THE ASSESSEE. 7 .1 THE LEARNED AR FURTHER SUBMITTED THAT THE ASSESSEE IS ENTITLED FOR THE DEDUCTION ON ACCOUNT OF THE INTEREST PAID ON THE BORROWED FUND USED IN THE PROPERTIES GENERATING RENTAL INCOME UNDER SECTION 24(B) O F THE ACT. BUT THE LEARNED CIT (A) HAS NOT ADJUDICATED THE GROUND RAISED BY THE ASSESSEE BEFORE HIM QUA THE CLAIM FOR THE DEDUCTION OF THE INTEREST EXPENSES UNDER SECTION 24(B) OF THE ACT. 8 . ON THE CONTRARY, THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 9 . WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE PRESENT APPEAL RELATES TO THE FOLLOWING DISPUTES: I. STANDARD DEDUCTION OF 2,54,566.00 UNDER SECTION 24(A) OF THE ACT II. D EDUCTION FOR THE INTEREST EXPENSES OF 1 62000 UNDER SECTION 24(B) OF THE ACT. 10 . AT THE OUTSET, WE NOTE THAT BOTH THE ISSUES AS DISCUSSED ABOVE HAVE ALREADY BEEN ADJUDICATED BY THE ORDER OF THIS TRIBUNAL IN THE OWN CASE OF THE ASSESSEE (SUPRA). THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED AS UNDER: ITA NO S.2096 - 2097/AHD/2017 ASSTT. YEAR S (2009 - 10 & 2014 - 15) PAGE 5 OF 10 6. AS REGARDS THESE GROUNDS OF APPEAL, THE DEDUCTION OF RS.1,67,760/ - HAS BEEN DECLINED AS IT IS HELD TO BE ADMISSIBLE ONLY IN RESPECT OF THE RENT OF THE PREMISES RENT OUT, AND THUS EXCLU DING THE RENT RELATABLE TO THE FIXTURES AND COMPUTERS ETC. WHILE THERE IS NO INFIRMITY IN THIS APPROACH, I DO SEE PRIMA FACIE MERITS IN THE ALTERNATE CLAIM MADE BY THE ASSESSEE IN RESPECT OF RS.1,62,000 IN RESPECT OF INTEREST ON BORROWINGS. HOWEVER, AS THE RELATED FACTS HAVE NOT BEEN EXAMINED BY THE AUTHORITIES BELOW, I DEEM IT PROPER TO REMIT THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINATION ON MERITS. 10 .1 THE FACTS IN THE CASE ON HAND ARE IDENTICAL TO THE FACTS OF THE CASE AS DISCUSSED ABO VE. THEREFORE RESPECTFULLY FOLLOWING THE SAME THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE PARTLY ALLOWED FOR THE STATISTICAL PURPOSES. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR THE STATISTICAL PURPOSES. 11 . COMING TO THE ITA NO. 2097/AHD/2017 AND APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2014 - 15 T HE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON FACTS AND IN LAW AS WELL AS IN THE CIRCUMSTANCES OF THE CASE OF THE APPELLANT THE LD.CIT(A) HAS GROSSLY ERRED IN SUSTAINING DISALLOWANCE OF RS.2,59,150/ - MADE BY THE A.O INVOKING PROVISION OF SEC.14A OF THE ACT, WHEN NO SUCH DISALLOWANCE IS WARRANTED. 2. ON FACTS AND IN LAW AS WELL AS IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT (A) HAS GROSSLY ERRED I N UPHOLDING DISALLOWANCE OF RS.4,20,269/ - U/S 57 OF THE ACT MADE BY THE A.O. WHEN THE SAME IS NOT WARRANTED. 3. ON THE FACTS AND IN LAW AS WELL AS IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS GROSSLY ERRED IN UPHOLDING DISALLOWANCE OF RS.2,49,000/ - ON ACCOUNT OF STANDARD DEDUCTION U/S.24 OF THE ACT MADE BY THE A.O WHEN THE SAME IS NOT WARRANTED. 4. ON FACTS AND IN LAW AS WELL AS IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT (A) HAS GROSSLY ERRED IN REJECTING ASSESSEE'S GROUND OF APPEAL ON INITIATION OF P ENALTY PROCEEDINGS U/S 271(L)(C) OF THE ACT WHEN HE OUGHT TO HAVE ADJUDICATED AND DECIDED INDEPENDENTLY. ITA NO S.2096 - 2097/AHD/2017 ASSTT. YEAR S (2009 - 10 & 2014 - 15) PAGE 6 OF 10 12 . THE 1 ST ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) OR IN CONFIRMING THE DISALLOWANCE OF 2 ,59,150/ - UNDER SECTION 14A OF THE ACT. 13 . THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS DECLARED DIVIDEND AND INTEREST INCOME ON PPF FOR 2 , 59 , 150 / - AND 1 , 11 , 178 / - RESPECTIVELY WHICH WAS CLAIMED AS EXEMPTED FROM TAX. HOWEVER THE ASSESSEE HAS NOT MADE ANY DISALLOWANCE AGAIN ST SUCH EXEMPTED INCOME UNDE R THE PROVISIONS OF SECTION 14A READ WITH RULE 8D OF INCOME TAX RULES . ACCORDINGLY THE AO INVOK E D THE PROVISIONS OF SECTION 14A READ WITH RULE 8D AND MADE THE DISALLOWANCE IN THE MANNER AS GIVEN BELOW: I. DIRECT EXPENSES NIL II. INT EREST EXPENSES 4 , 13 , 235 / - III. ADMINISTRATIVE EXPENSES 28 , 287 / - T OTAL 4 , 41 , 522 / - 13 .1 H OWEVER, THE AO FOUND THAT THE AMOUNT OF EXEMPTED INCOME IS LESS THAN THE AMOUNT OF EXPENSES WORKED OUT FO R THE DISALLOWANCE UNDER RULE 8 D OF I NCOME TAX R ULE. ACCORDIN GLY THE AO LIMITED THE AMOUNT OF DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8 D TO THE TUNE OF 2, 59 , 150 / - BEING THE AMOUNT OF EXEMPTED INCOME. THUS T HE AMOUNT DISALLOWED UNDE R THE PROVISIONS OF SECTION 14A READ THE RULE 8D WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 14 . AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A) WHO ALSO CONFIRMED THE ORDER OF THE AO. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A), THE ASSESSEE IS IN APPEAL BE FORE US. 15 . THE LEARNED AR BEFORE US SUBMITTED THAT THERE CANNOT BE ANY DISALLOWANCE UNDE R SECTION 14A READ WITH RULE 8 D IN THE CASE OF THE ASSESSEE AS SHE HAS NOT CLAIMED ANY DEDUCTION OF SUCH EXPENSES. ITA NO S.2096 - 2097/AHD/2017 ASSTT. YEAR S (2009 - 10 & 2014 - 15) PAGE 7 OF 10 16 . ON THE OTHER HAND, THE LEARNED DR VEHEMENTL Y SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 17 . WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE PRESENT CASE RELATES TO THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF INTEREST AND ADMINISTRATIVE EXPENSES UNDER THE PROVISIONS OF SECTION 14A READ WITH RULE 8D OF INCOME TAX RULES, 1962. IN THIS REGARD, WE NOTE THAT THE AO HAS INVOKED THE PROVISIONS OF SECTION 14A READ WITH RULE 8D MECHANICALLY WITHOUT REFERRING TO THE BOOKS OF ACCOUNT S OF THE ASSESSEE. AS SUCH THE ASSESSEE HAS NOT CLAIMED ANY EXPENDITURE AGAINST SUCH EXEMPTED INCOME. THEREFORE IN OUR VIEW THERE CANNOT BE ANY DISALLOWANCE OF THE EXPENSES ON ACCOUNT OF EXEMPTED INCOME. IN HOLDING SO WE ALSO DRAW SUPPORT AND GUIDANCE FROM THE ORDER OF THIS TRIBUNAL IN THE CASE OF RAKESH K. PATEL (HUF) VS DCIT IN ITA NO. 246/AHD/2018 FOR THE ASSESSMENT YEAR 2013 - 14 DATED 23 RD JULY 2019. THE RELEVANT FINDING OF THE ORDER IS REPRODUCED AS UNDER: 6. INVESTMENTS IN PARTNERSHIP FIRM WOULD NOT ATTRACT DISALLOWANCE UNDER S. 14A UNLESS IT IS SHOWN BY THE AO THAT CERTAIN EXPENSES HOWSOEVER SMALL HAVE BEEN INCURRED FOR THE PURPOSES OF PARTNERSHIP FIRM AND CLAIMED IN THE ASSESSEE S ACCOUNTS. NO SUCH OBSERVATION IS FOUND IN THE ORDER OF THE AO. NEED LESS TO SAY APPLICATION OF SEC. 14A IS NOT AUTOMATIC AND IT INHERES IN IT THE CONCEPT OF REASONABLENESS. THE AO IN THE INSTANT CASE IS NOT FOUND TO HAVE SATISFIED HIMSELF ABOUT INCURRING OF ANY ADMINISTRATIVE EXPENSES. THE PARTNERSHIP FIRM IS AN INDEPEND ENT ENTITY AND REQUIRES TO RUN ITS AFFAIRS SEPARATELY. THE PARTNERS ARE HOLDING THE MUTUAL AGENCY IN THE PARTNERSHIP FIRM AND UNLESS THE PARTNERS ARE SHOWN TO BE DRAWING REMUNERATION FROM THE ASSESSEE CONCERN AND AT THE SAME TIME INVESTING ITS ATTENTION I N THE PARTNERSHIP FIRM, THERE IS NO PERCEPTIBLE REASON TO DISBELIEVE THE ASSESSEE FOR NOT INCURRING IN EXPENDITURE. WE, THUS, FIND NO REASON TO THRUST MECHANICAL APPLICATION OF RULE 8D(2)(III) OF THE ACT IN THE GIVEN FACTS. THE ORDER OF THE CIT(A) IS CON SEQUENTLY SET ASIDE AND THE AO IS DIRECTED TO REVERSE THE DISALLOWANCE MADE IN RULE 8D(2)(III) R.W.S 14A OF THE ACT. IN VIEW OF THE ABOVE, WE HOLD THAT THERE CANNOT BE ANY DISALLOWANCE ON ACCOUNT OF INTEREST AND ADMINISTRATIVE EXPENSES UNDER THE PROVISIONS OF SECTION 14A READ WITH RULE 8D OF THE INCOME TAX RULES FOR THE REASONS AS DISCUSSED ABOVE. ACCORDINGLY WE SET ASID E THE FINDING OF THE LEARNED CIT - A AND DIRECT THE AO TO ITA NO S.2096 - 2097/AHD/2017 ASSTT. YEAR S (2009 - 10 & 2014 - 15) PAGE 8 OF 10 DELETE THE ADDITION MADE BY HIM. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 18 . THE ISSUE RAISED BY THE ASSESSEE IN 2 ND GROUND OF APPEAL IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE OF 4, 20 , 269 / - UNDER SECTION 57 OF THE ACT. 19 . THE ASSESSEE IN THE YEAR UNDER CONSIDERA TION HAS CLAIMED EXPENSES OF 7, 17 , 721 / - UNDER SECTION 57 OF THE ACT AGAINST THE INTEREST INCOME OF 38,502.00. HOWEVER, THE AO DURING THE ASSESSM ENT PROCEEDINGS FOUND THAT THE INTEREST E XPENSES OF 7, 17 , 721 / - HAS NOT BEEN INCURRED IN CONNECTION WITH THE IMPUGNED INTEREST INCOME. THE AO ALSO OBSERVED THAT HIS PREDECESSOR HAS ALSO DISALLOWED THE IDENTICAL CLAIM OF THE ASSESSE E IN THE ASSESSMENT YEAR 20 12 - 13 WHICH WAS ALSO CONFIRMED BY THE LEARNE D C IT - A. 19 .1 ACCORDINGLY, THE AO HAS MADE THE DISALLOWANCE OF 4, 20 , 269 / - BY OBSERVING AS UNDER: HOWEVER, TAKING INTO ACCOUNT THE RATIO OF THE DECISION IN THE CASE OF THE ASSESSEE HERSELF FOR A.Y. 2012 - 13, OF THE LD. CIT(A) IN ORDER DATED 30.09.2015 IN APPEAL NO.CIT(A)/GNR/292/2014 - 15, AN AMOUNT BALANCED AFTER DISALLOWANCE MADE U/S. 14A I.E. RS.2,59,150/ - AND INCOME BOOKED U/S. 56 OF I.T.ACT I.E. RS.38,302/ - , IS ELIGIBLE FOR DISALLOWANCE U/S. 57 OF I.T.ACT. THE DISALLOWANCE IS WORKED OUT AT RS.4,20,269/ - [RS.7,17,721 - (RS.2,59,150 - RS.38,302)]. ACCORDINGLY, RS. 4,20,269/ - IS DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S 271(L)(CJ ARE INITIATED SEPARATELY FOR CONCEA LMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF THE INCOME. . 20 . A GGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A) W HO CONFIRMED THE ORDER OF THE AO. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A), THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO S.2096 - 2097/AHD/2017 ASSTT. YEAR S (2009 - 10 & 2014 - 15) PAGE 9 OF 10 21 . THE LEARNED AR BEFORE US SUBMITTED THAT SIMILAR EXPENSES WERE CLAIMED IN THE EARLIER YEAR WHICH WAS ALLOWED BY THE R EVENUE. THEREFORE, THE DEDUCTION OF IMPUGNED INTEREST EXPENSES SHOULD BE ALLOWED IN THE YEAR UNDER CONSIDERATION. 22 . ON THE OTHER HAND THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 23 . WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET WE NOTE THAT THE ASSESSEE HERSELF V IDE LETTER DATED 19 AUGUST 2016 FILED BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS HAS ADMITTED THAT SUCH INTEREST IS ELIGIBLE FOR DEDUCTION UNDER SECTION 24 OF THE ACT. THE RELEVANT EXTRACT OF THE LETTER AS REPRODUCED BY THE AO IN HIS ORDER IS AS FOLLO WS: AS STATED EARLIER IN PARA(III) OF THIS LETTER, THE INTEREST PAID TO PERSON IS NOT CLAIMED UNDER SECTION 57 OF THE INCOME TAX ACT 1961, BUT IT HAS BEEN CLAIMED UNDER EXPLANATION APPENDED TO SECTION 24 OF THE INCOME TAX ACT 1961. INCOME FROM OTHER SO URCES INCLUDING INTEREST PAID IS INDICATED AS PER DIRECTIONS OF THE INCOME TAX DEPARTMENT, FOR ALLOWING CREDITS OF TDS IN RELEVANT CASES. 23 .1 F ROM THE ABOVE ORDER IT IS CLEAR THAT THE ASSESSEE HERSELF DOES NOT WANT TO CLAIM THE DEDUCTION UNDER SECTI ON 57 OF THE ACT. ACCORDINGLY, WE ARE OF THE VIEW THAT THE ASSESSEE IS NOT ENTITLED FOR SUCH DEDUCTION I.E. INTEREST EXPENSES. THUS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE AUTHORITIES BELOW. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED . 24 . THE 3 RD ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE OF 2,49,000 / - ON ACCOUNT OF STANDARD DEDUCTION UNDER SECTION 24 OF THE ACT. 25 . AT THE OUTSET WE NOTE THAT THE IDENTICAL ISSUE HAS BEEN DECIDED BY US IN THE OWN CASE OF THE ASSESSEE PERTAINING TO THE ASSESSMENT YEAR 2009 - 10 BEARING ITA NO. 2096/AHD/2017. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED IN PARAGRAPH NUMBER 9 & 10 OF THIS ORDER. FOR THE DETAILED DISCUSSION, PLEASE REFER THE RELEVANT ITA NO S.2096 - 2097/AHD/2017 ASSTT. YEAR S (2009 - 10 & 2014 - 15) PAGE 10 OF 10 PARAGRAPH. RESPECTFULLY FOLLOWING THE SAME WE DISMISS THE GROUND OF APPEAL OF THE ASSESSEE. 26 . IN THE RESULT, APPEAL S OF THE ASSESSEE BEARING ITA NO.2096/AHD/2017 FOR A.Y. 2009 - 10 IS PARTLY A LLOWED FOR STATISTICAL PURPOSES AND ITA NO.2097/AHD/2017 FOR A.Y.2014 - 15 IS PARTLY ALLOWED. O RDER PRONOUNCED IN THE COURT ON 17 /12 / 2019 AT AHMEDABAD. - SD - - SD - (MS MADHUMITA ROY ) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) A HMEDABAD; DATED 17 / 12 /2019 M ANISH