Smt. Vandana Manoj Sheth, Ahmedabad V. Income Tax Officer, Ahmedabad

ITA 3100/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9251 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-03-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 04-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D L SHARMA
• Assessee Lawyers: PF JAIN
• Keywords: Charitable institution
• Section: 143(3); 154

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ ITA.NO.3100/AHD/2015 / ASSTT. YEAR: 2011-2012 SMT.VANDANA MANOJ SHAH 8, YASH NIRMAN FLATS SANJIVANI ROAD, PALDI AHMEDABAD 380 059. PAN : AGUPS 9886 J VS ITO, WARD - 15(4) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI P.F. JAIN, AR REVENUE BY : SHRI D.L. SHARMA, SR.DR / DATE OF HEARING : 10/03/2016 / DATE OF PRONOUNCEMENT: 14/03/2016 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LD.COMMISSIONER INCOME-TAX (APPEALS)-7, AHMEDABAD D ATED 7.5.2015 PASSED FOR THE ASSTT.YEAR 2011-12 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT LD.FI RST APPELLATE AUTHORITY HAS ERRED IN CONFIRMING THE ADDITION OF R S.31,959/-, WHICH WAS DISALLOWED BY THE LD.AO OUT OF THE CLAIM MADE U/S.8 0E OF THE INCOME TAX ACT. ITA NO.3100/AHD/2015 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED HER RETURN OF INCOME ON 28.7.2011 DECLARING TOTAL INCOME AT RS.6, 22,660/-. THE ASSESSMENT WAS FINALIZED UNDER SECTION 143(3) OF TH E INCOME TAX ACT ON 27.12.2012. THE TOTAL INCOME OF THE ASSESSEE WAS A SSESSED AT RS.6,26,860/-. THE AO HAS MADE ADDITION OF RS.4,20 6/- BEING SHORT TERM CAPITAL GAIN NOT OFFERED TO TAX. THE AO, THEREAFTER , ISSUED A NOTICE UNDER SECTION 154 OF THE INCOME TAX ACT. THIS NOTICE WAS ISSUED THROUGH SPEED POST, WHICH WAS RETURNED TO THE DEPARTMENT UN -SERVED. THE AO HAS OBSERVED THAT THE ASSESSEE HAS MADE A CLAIM OF RS.31,959/- UNDER SECTION 80E OF THE INCOME TAX ACT. THE CLAIM UNDER SECTION 80E OF THE ACT CAN BE MADE BY AN ASSESSEE FOR INCURRING INTERE ST EXPENSE ON THE LOAN TAKEN FOR THE PURPOSE OF EDUCATION FOR HIMSELF /HERSELF OR FOR THEIR RELATIVES. THE LD.AO HAS OBSERVED THAT THE EDUCATI ON LOAN WAS TAKEN BY THE MARRIED MAJOR SON OF THE ASSESSEE, AND THEREFOR E, CANNOT CLAIM INTEREST UNDER SECTION 80E OF THE INCOME TAX. THE AO RECTIFIED THE ASSESSMENT ORDER UNDER SECTION 143(3). HE DISALLOW ED A SUM OF RS.39,959/- AND DETERMINED TAXABLE INCOME OF THE AS SESSEE AT RS.6,58,820/- AS AGAINST RS.6,26,861/- DETERMINED I N THE SCRUTINY ASSESSMENT. 4. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 5. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE CONTE NDED THAT NO DISALLOWANCE CAN BE MADE UNDER SECTION 154 OF THE I NCOME TAX ACT. ON ITA NO.3100/AHD/2015 3 THE OTHER HAND, THE LD.DR CONTENDED THAT THE LOAN W AS TAKEN BY THE MAJOR SON OF THE ASSESSEE. SHE CANNOT CLAIM INTEREST EXP ENSES. 6. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. FOR RESOLVING THE CONTROVERSY IN HAND, WE DEEM IT PERTINENT TO TAKE NOTE OF SECTION 80E(1) OF THE INC OME TAX ACT. IT READS AS UNDER: 80E. (1) IN COMPUTING THE TOTAL INCOME OF AN ASSES SEE, BEING AN INDIVIDUAL, THERE SHALL BE DEDUCTED, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, ANY AMOUNT PAID BY HIM IN THE PREVIOUS YEAR, OUT OF HIS INCOME CHARGEABLE TO TAX, BY WAY OF INTEREST ON LOAN TAKEN BY HIM FROM ANY FINANCIAL IN STITUTION OR ANY APPROVED CHARITABLE INSTITUTION FOR THE PURPOSE OF PURSUING HIS HIGHER EDUCATION 97[OR FOR THE PURPOSE OF HIGHER ED UCATION OF HIS RELATIVE]. 7. A PERUSAL OF THE ABOVE SECTION WOULD INDICATE TH AT IF AN ASSESSEE HAS INCURRED INTEREST EXPENDITURE FOR THE EDUCATION LOAN OF ANY RELATIVES IN ANY FINANCIAL YEAR, THEN SUCH INTEREST WOULD BE ALLOWED TO THE ASSESSEE AS DEDUCTION. THE CASE OF THE AO IS THAT LOAN WAS TAKEN BY THE MARRIED MAJOR SON OF THE ASSESSEE FOR HIS EDUCATION. IT IS PERTINENT TO OBSERVE THAT THE POWER OF RECTIFICATION UNDER SECTION 154 O F THE INCOME TAX ACT CAN BE EXERCISED ONLY WHEN THE MISTAKE, WHICH IS SO UGHT TO BE RECTIFIED, IS AN OBVIOUS PATENT MISTAKE, WHICH IS APPARENT FRO M THE RECORD AND NOT A MISTAKE, WHICH IS REQUIRED TO BE ESTABLISHED BY ARG UMENTS AND LONG DRAWN PROCESS OF REASONING ON POINTS, ON WHICH THER E MAY CONCEIVABLY BE TWO OPINIONS. ITA NO.3100/AHD/2015 4 8. IN THE PRESENT CASE, BEFORE CARRYING OUT RECTIFI CATION AS SUGGESTED BY THE AO ONE HAS TO DECIDE THE NATURE OF LOAN, WHO HAS TAKEN THE LOAN ETC. IT WILL REQUIRE LONG DRAWN PROCESS OF HEARING . IT IS A DEBATABLE QUESTION. THE ASSESSEE ANNEXED FORM NO.16 ALONG WI TH HER RETURN AND SHOWN THE DEDUCTION UNDER SECTION 80E. THIS STEP M UST HAVE BEEN TAKEN BY THE DESIGNATED EMPLOYER OR BY THE ASSESSEE AFTER DUE CONSIDERATION OF SECTION 80E AND LOAN DOCUMENTATION. SUCH STAND CAN BE DISPELLED AFTER PERUSAL OF THE LOAN DOCUMENTS AND OTHER DETAILS. I T CANNOT BE A SUBJECT MATTER OF PROCEEDINGS UNDER SECTION 154. THEREFORE , WE ALLOW THE APPEAL OF THE ASSESSEE AND DELETE THE DISALLOWANCE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 14 TH MARCH, 2016 AT AHMEDABAD. SD/- SD/- ( N.K. BILLAIYA ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER