SARITA SUNIL MANTRI, MUMBAI V. INCOME TAX OFFICER, MUMBAI

ITA 2969/MUM/2022

AI Insights

The case involves Sarita Sunil Mantri appealing against the order of the National Faceless Appeal Centre, which confirmed certain additions and disallowances related to her income tax assessment for the year 2013-14. The primary issues revolved around the deemed rent addition under section 23(4), non-allowance of interest on housing loan under section 24(b), and the addition of undisclosed interest income. The Tribunal dismissed several grounds as infructuous but allowed the appeal concerning the set-off of brought forward losses against current year's income under the heads 'income from house property' and 'capital gains'.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123555 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: G
• Next Hearing Date: 16-01-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 20-11-2022
• Other Referred Cases: NTPC Ltd. 229 ITR 283 (SC)
• Laws Referred To: Section 23(4), Section 24(b), Section 71B, Section 74(1)
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Capital Gains

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI ABY T VARKEY (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 2969/MUM/2022 Assessment Year: 2013-14 Sarita Sunil Mantri, Flat 3 and 4, Kamal Building, 69 Walkeshwar Road, Opp. Gopi Birla School, Walkeshwar, Mumbai-400006. Vs. ITO-7(2)(1), Aayakar Bhavan, Mumbai-400020. PAN No. ADXPM 8070 E Appellant Respondent Assessee by : Mr. Abhishek Jhunjhunwala, AR Revenue by : Mr. Aditya Rai, DR Date of Hearing : 17/01/2023 Date of pronouncement : 19/01/2023 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the assessee against order dated 22.09.2022 passed by the Ld. National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2013- 14, raising following grounds: 1.0 On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the addition of deemed rent u/s.23(4) of Rs.4,83,140/ 305 @ 7% of cost of property; 1.1 The Ld. CIT(A) ought to have considered the fact that the provisions of adjacent and interlinked to each other, comprises of a residential house; 1.2 The Ld. CIT(A) ought to have held the flat no.305 bearing cost of Rs.64,70,100/ no. 1606 bearing cost of Rs.38,82,900/ assessment order; 1.3 Without prejudice, the set from hous property ought to have been allowed for set with the renta income of impugned year 2.0 On facts and CIT(A) erred in not allowing the interest u/s.24(b) on housing loan paid of Rs.4,24,285/ 3.0 On facts and circumstances of the case and in law, Ld. AO, merely following AIR information, erred in making the addition of Undisclosed interest income of Rs.2.380/ 4.0 On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the disallowance of expenses debited to profit and loss account of Rs.2,21,974/ 2. Before us, the Ld. Counsel of the a except ground No. 1.3 of Rs.4,83,140/- on estimating the fair rent on flat no. 1606 and 305 @ 7% of cost of property; The Ld. CIT(A) ought to have considered the fact that the provisions of Sec.23(4) shall not apply, since the flats, being adjacent and interlinked to each other, comprises of a residential The Ld. CIT(A) ought to have held the flat no.305 bearing cost of Rs.64,70,100/- as Self occupied property, as against flat 1606 bearing cost of Rs.38,82,900/- held as SOP in the assessment order; Without prejudice, the set-off of the brought forward loss from hous property ought to have been allowed for set with the renta income of impugned year On facts and circumstances of the case and in law, Ld. CIT(A) erred in not allowing the interest u/s.24(b) on housing loan paid of Rs.4,24,285/-; On facts and circumstances of the case and in law, Ld. AO, merely following AIR information, erred in making the ion of Undisclosed interest income of Rs.2.380/ On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the disallowance of expenses debited to profit and loss account of Rs.2,21,974/-; Before us, the Ld. Counsel of the assessee subm except ground No. 1.3 of the appeal raised, other grounds Sarita Sunil Mantri ITA No. 2969/M/2022 2 on estimating the fair rent on flat no. 1606 and The Ld. CIT(A) ought to have considered the fact that the Sec.23(4) shall not apply, since the flats, being adjacent and interlinked to each other, comprises of a residential The Ld. CIT(A) ought to have held the flat no.305 bearing as Self occupied property, as against flat held as SOP in the off of the brought forward loss from hous property ought to have been allowed for set-off us.71B circumstances of the case and in law, Ld. CIT(A) erred in not allowing the interest u/s.24(b) on housing On facts and circumstances of the case and in law, Ld. AO, merely following AIR information, erred in making the ion of Undisclosed interest income of Rs.2.380/-; On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the disallowance of expenses debited ssessee submitted that grounds were not pressed and therefore, ground No. 1 to 1.2 and ground No. 2 to 4 of the appeal are accordingly dismissed as infructuous. 3. The Ld. Counsel of the assessee also ground filed by the assessee which reads as under: 1.0 On facts and circumstances of the case and in law, a prayer is made to direct the Ld. AO to allow the Set eligible brought forward Long Term Capital Loss u/s.74(1) of Rs.36,37,562/ Property u/s.71B of Rs.3,38,198/ 4. The additional ground raised by the assessee being related to only matter of verification and no investigation of fresh facts is required, therefore, same is case of NTPC Ltd. 229 ITR 283 (SC) 5. Since, the ground NO. 1.3 and additional ground raised both are connected, same are adjudicated in combined manner. 6. We have heard rival submission of the parties on the issu dispute and perused the relevant material on record. The contention of the assessee that brought forward losses under the head ‘income from house property’ as well as under the head ‘capital gain’ should be set off against current years income under the head ‘income from house property’ and income under the head ‘capital gain’ respectively. The details of said brought forward losses filed by the assessee, is reproduced as under: pressed and therefore, ground No. 1 to 1.2 and ground No. 2 to 4 of the appeal are accordingly dismissed as infructuous. The Ld. Counsel of the assessee also referred to additional ground filed by the assessee which reads as under: On facts and circumstances of the case and in law, a prayer is made to direct the Ld. AO to allow the Set eligible brought forward Long Term Capital Loss u/s.74(1) of Rs.36,37,562/- and eligible brought forward loss from House Property u/s.71B of Rs.3,38,198/-. The additional ground raised by the assessee being related to only matter of verification and no investigation of fresh facts is therefore, same is admitted in view of settled law in the NTPC Ltd. 229 ITR 283 (SC). Since, the ground NO. 1.3 and additional ground raised both same are adjudicated in combined manner. We have heard rival submission of the parties on the issu dispute and perused the relevant material on record. The contention of the assessee that brought forward losses under the head ‘income from house property’ as well as under the head ‘capital gain’ should be set off against current years income under he head ‘income from house property’ and income under the head ‘capital gain’ respectively. The details of said brought forward losses filed by the assessee, is reproduced as under: Sarita Sunil Mantri ITA No. 2969/M/2022 3 pressed and therefore, ground No. 1 to 1.2 and ground No. 2 to 4 of the appeal are accordingly dismissed as infructuous. referred to additional On facts and circumstances of the case and in law, a prayer is made to direct the Ld. AO to allow the Set-off of the eligible brought forward Long Term Capital Loss u/s.74(1) of and eligible brought forward loss from House The additional ground raised by the assessee being related to only matter of verification and no investigation of fresh facts is admitted in view of settled law in the Since, the ground NO. 1.3 and additional ground raised both same are adjudicated in combined manner. We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. The contention of the assessee that brought forward losses under the head ‘income from house property’ as well as under the head ‘capital gain’ should be set off against current years income under he head ‘income from house property’ and income under the head ‘capital gain’ respectively. The details of said brought forward losses Particulars Income from House property Income from Business Income from Long term capital gain Income from other sources Assessed Total Income Brought Forward Loss to be allowed Set off of B/f loss on loss :-₹11,94,250/-] Set off of B/f loss on long term capital asset u/s 74 [Available loss :-₹50,86,006/ 6.1 The Ld. Counsel of the assessee referred to the return of income filed for assessment year 2012 submitted that assessee of ₹11,94,250/- under the head ‘income from house property’ and long term capital loss of set off against respective income in current year. set off carry forward losses of income from house property 71B has prescribed as under : “71B. Where for any assessment y computation under the head Income from house property" is a loss to the assessee and such loss cannot be or is not wholly set off against income from any other head of income in accordance with the provisions of section 71, so much of been so set-off or where he has no income under any other head, the whole loss Chapter, be carried forward to the Following assessment year and- Particulars Assessment Order Income from House property from Business Income from Long term capital Income from other sources 3,38,198 6,92,506 84,40,500 34,36,37,298 Assessed Total Income 35,36,37,298 Brought Forward Loss to be allowed Set off of B/f loss on House property u/s 71B [available 3,38,198 Set off of B/f loss on long term capital asset u/s 74 50,86,006/-] 36,37,562 39,37,562 The Ld. Counsel of the assessee referred to the return of income filed for assessment year 2012-13 and 2013 submitted that assessee had duly claimed carry forward of the loss under the head ‘income from house property’ and capital loss of ₹50,86,006/- and same might be allowed to spective income in current year. We find that for set off carry forward losses of income from house property prescribed as under : 71B. Where for any assessment year the net result of computation under the head Income from house property" is a loss to the assessee and such loss cannot be or is not wholly set off against income from any other head of income in accordance with the provisions of section 71, so much of the loss as has not off or where he has no income under any other head, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the Following assessment year Sarita Sunil Mantri ITA No. 2969/M/2022 4 CIT(A) 3,38,198 NIL 36,37,562 NIL 39,75,760 3,38,198 36,37,562 39,37,562 The Ld. Counsel of the assessee referred to the return of 13 and 2013-14 and duly claimed carry forward of the loss under the head ‘income from house property’ and and same might be allowed to We find that for set off carry forward losses of income from house property, section ear the net result of computation under the head Income from house property" is a loss to the assessee and such loss cannot be or is not wholly set off against income from any other head of income in accordance the loss as has not off or where he has no income under any other head, shall, subject to the other provisions of this Chapter, be carried forward to the Following assessment year (i) be set off against the income from hous for that assessment year; and (ii) the loss, if any, which has not been set off wholly, the amount of loss not so set off, shall be carried forward to the following assessment year, not being more than eight assessment years immediate the assessment year for which the loss was first computed.] 6.2 Similarly, for set off brought forward losses under the head ‘capital gains’ the section 74 “74. (1) Where in respect of any assessment year, the net of the computation under the head "Capital gains* is a loss to the assessee, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and- (a) in so far as such loss relates to a sho shall be set off against income, if any, under the head "Capital gains" assessable for that assessment year in respect of any other capital asset; (b) in so far as such loss relates to a long shall be set of gains* assessable for that assessment year in respect of any other capital asset not being a short (c) if the loss cannot be wholly so set off, the amount of loss not so set off shall be year and so on.] (i) be set off against the income from house property assessable for that assessment year; and (ii) the loss, if any, which has not been set off wholly, the amount of loss not so set off, shall be carried forward to the following assessment year, not being more than eight assessment years immediate the assessment year for which the loss was first computed.] Similarly, for set off brought forward losses under the head ‘capital gains’ the section 74 has prescribed as under: (1) Where in respect of any assessment year, the net of the computation under the head "Capital gains* is a loss to the assessee, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment (a) in so far as such loss relates to a short-term capital asset, it shall be set off against income, if any, under the head "Capital gains" assessable for that assessment year in respect of any other capital asset; (b) in so far as such loss relates to a long-term capital asset, it shall be set off against income, if any, under the head "Capital gains* assessable for that assessment year in respect of any other capital asset not being a short-term capital asset; (c) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on.] Sarita Sunil Mantri ITA No. 2969/M/2022 5 e property assessable (ii) the loss, if any, which has not been set off wholly, the amount shall be carried forward to the following assessment year, not being more than eight assessment years immediately succeeding the assessment year for which the loss was first computed.]” Similarly, for set off brought forward losses under the head prescribed as under: (1) Where in respect of any assessment year, the net result of the computation under the head "Capital gains* is a loss to the assessee, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment term capital asset, it shall be set off against income, if any, under the head "Capital gains" assessable for that assessment year in respect of any term capital asset, it f against income, if any, under the head "Capital gains* assessable for that assessment year in respect of any term capital asset; (c) if the loss cannot be wholly so set off, the amount of loss not carried forward to the following assessment (2) No loss shall be carried forward under this section for more than eight assessment years immediately succeeding the assessment year for which the loss was first computed. (3) "[Omitted by th 6.3 The assessee is seeking property’ against income of capital gain against capital gain of year under consideration origin in which year these losses arose to the assessee available upto certain period of year appropriate to restore this matter to the file of the Ld. Assessing Officer for verification and allow the set off in accordance with law. The ground No. 1.3 and the additional ground raised by the assessee are accordingly allowed for statistical purposes. 7. In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced under Rule 34(4) of the ITAT Rules, 1963 on 19/01/2023. Sd/- (ABY T VARKEY JUDICIAL MEMBER Mumbai; Dated: 19/01/2023 Rahul Sharma, Sr. P.S. (2) No loss shall be carried forward under this section for more than eight assessment years immediately succeeding the assessment year for which the loss was first computed. (3) "[Omitted by the Finance Act, 2002, w.e.f. 1.4-2003.] The assessee is seeking set off of losses under the head ‘house property’ against income of ₹3,38,198/- and losses capital gain against capital gain of ₹36,37,562/- eration. Since set off require verification of the which year these losses arose to the assessee available upto certain period of year therefore, we feel it appropriate to restore this matter to the file of the Ld. Assessing r for verification and allow the set off in accordance with law. The ground No. 1.3 and the additional ground raised by the assessee are accordingly allowed for statistical purposes. In the result, the appeal of the assessee is partly allowed for Order pronounced under Rule 34(4) of the ITAT Rules, /01/2023. Sd/- ABY T VARKEY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Sarita Sunil Mantri ITA No. 2969/M/2022 6 (2) No loss shall be carried forward under this section for more than eight assessment years immediately succeeding the assessment year for which the loss was first computed. 2003.]” losses under the head ‘house and losses under the head for assessment Since set off require verification of the which year these losses arose to the assessee as set off is therefore, we feel it appropriate to restore this matter to the file of the Ld. Assessing r for verification and allow the set off in accordance with law. The ground No. 1.3 and the additional ground raised by the assessee are accordingly allowed for statistical purposes. In the result, the appeal of the assessee is partly allowed for Order pronounced under Rule 34(4) of the ITAT Rules, - OM PRAKASH KANT) ACCOUNTANT MEMBER Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary) ITAT, Mumbai Sarita Sunil Mantri ITA No. 2969/M/2022 7 BY ORDER, (Sr. Private Secretary) ITAT, Mumbai