M/s. Universal Precision Screws, New Delhi V. JCIT, New Delhi

ITA 3305/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9001 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 06-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Revised return; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.3305/DEL/2016 ASSESSMENT YEAR: 2011-12 UNIVERSAL PRECISION SCREWS, 146, NEW CYCLE MARKET, KHANDEWALAN EXTN., NEW DELHI. PAN: AABFU6927B VS JCIT, RANGE-39, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VED JAIN, ADVOCATE REVENUE BY : SHRI J.K. MISHRA, CIT, DR DATE OF HEARING : 12.09.2019 DATE OF PRONOUNCEMENT : 24.09.2019 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 11 TH MARCH, 2016 OF THE CIT(A)-20, NEW DELHI, RELATING T O ASSESSMENT YEAR 2011-12. 2. GROUNDS OF APPEAL 1 AND 4 BEING GENERAL IN NATUR E ARE DISMISSED. 3. GROUND OF APPEAL NO.3 WAS NOT PRESSED BY THE LD. COUNSEL ON ACCOUNT OF SMALLNESS OF THE AMOUNT. ACCORDINGLY, THE SAME IS DISMISSED. GROUND OF APPEAL NO.2 READS AS UNDER:- ITA NO.3305/DEL/2016 2 2. (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE ACTION OF THE AO IN NOT ALLOWING DEDUCTION OF AN AMOUNT OF RS.6,23,654/- ON ACCOUNT OF INTEREST CLAIMED BY THE ASSESSEE UNDER SECTION 24(B) OF THE ACT WHILE COMPUTING THE INCOME UNDER THE HEAD HOUSE PROPERTY. (II) THAT THE LEARNED CIT(A) HAS ERRED IN MAKING T HE ABOVE SAID DISALLOWANCE DESPITE THE FACT THAT THE LOAN ON WHIC H THE INTEREST HAS BEEN PAID WAS UTILIZED BY THE ASSESSEE FOR THE PURPOSE OF CON STRUCTION OF LET OUT PROPERTY. 4. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF MANUFACTURING OF NUTS/BOLTS, SCR EWS/SHOULDER BOLTS/DOWEL PINS AND OTHER SPECIAL FASTENERS MADE OF VARIOUS MATERIA LS. IT FILED ITS RETURN OF INCOME ON 27 TH SEPTEMBER, 2011 DECLARING TOTAL INCOME OF RS.2,72, 74,220/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER NOTED THAT THE ASSESSEE HAS CLAIMED INTEREST ON TERM LOAN PAID BY THE ASSES SEE AMOUNTING TO RS.6,23,654/- AS DEDUCTION U/S 24(B) OF THE IT ACT. HE NOTED THA T THE ASSESSEE HAS NOT CLAIMED ANY SUCH DEDUCTION FOR INTEREST PAYMENT IN ITS RETU RN OF INCOME FILED FOR ASSESSMENT YEAR 2007-08 AND 2008-09. HOWEVER, THE ASSESSEE CL AIMED THE SAME BY MEANS OF REVISED RETURN FOR ASSESSMENT YEAR 2009-10 WHICH WA S DISALLOWED. EVEN FOR ASSESSMENT YEAR 2010-11, THE ASSESSEE FAILED TO CLA IM THE ABOVE DEDUCTION IN THE ORIGINAL RETURN OF INCOME FILED. THE ASSESSING OFF ICER, FURTHER HELD THAT THE ASSESSEE COULD NOT SUBSTANTIATE ITS CLAIM BY FILING NECESSARY SUPPORTING DOCUMENTARY EVIDENCE. HE OBSERVED THAT ALTHOUGH TH E ASSESSEE HAS TAKEN LOAN FROM THE BANK AND HAS USED THE SAME FOR THE PURPOSE OF BUSINESS, THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE ITS CLAIM THAT A PART OF THE LOAN WAS USED FOR THE ITA NO.3305/DEL/2016 3 CONSTRUCTION OF LET OUT PROPERTY. HE, THEREFORE, D ISALLOWED THE CLAIM OF DEDUCTION U/S 24(B) OF THE ACT OF RS.6,23,654/-. IN APPEAL, THE LD.CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER. WHILE DOING SO, HE NOTED TH AT THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009-10 HAS SET ASIDE THE ISSUE TO THE FILE OF ASSESSING OFFICER. FURTHER, DURING THE APPEAL PROC EEDINGS, THE ASSESSEE FAILED TO SUBMIT ANY CONCLUSIVE EVIDENCE AS TO WHAT AMOUNT OF LOAN HAS BEEN DEPLOYED FOR THE CONSTRUCTION OF THE LET OUT PROPERTY. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENT ION OF THE BENCH TO THE ORDER PASSED BY THE ASSESSING OFFICER U/S 250/143(3) ON 2 9 TH JANUARY, 2016 FOR ASSESSMENT YEAR 2009-10 WHEREIN THE ASSESSING OFFIC ER HAS ALLOWED THE CLAIM OF INTEREST U/S 24(B) OF RS.14,53,153/-. HE SUBMITTED THAT THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2010-11, VIDE ITA NO.1 454/DEL/2015, ORDER DATED 3 RD OCTOBER, 2018 HAS ALSO RESTORED THE ISSUE TO THE F ILE OF THE ASSESSING OFFICER FOLLOWING THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2009-10. HE SUBMITTED THAT SINCE THE ASSESSING OFFICER IN THE INSTANT CAS E HAS ALREADY ALLOWED THE CLAIM, THEREFORE, THIS BEING A COVERED MATTER IN FAVOUR OF THE ASSESSEE, THE CLAIM OF DEDUCTION U/S 24(B) SHOULD ALLOWED. ITA NO.3305/DEL/2016 4 7. THE LD. DR, ON THE OTHER HAND, SUBMITTED THAT SI NCE THE TRIBUNAL, FOR ASSESSMENT YEAR 2010-11, HAS RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER, FOLLOWING THE ORDER FOR ASSESSMENT YEAR 2009-10 WHI CH IS SUBSEQUENT TO THE CONSEQUENTIAL ORDER PASSED BY THE ASSESSING OFFICER IN THE SET ASIDE PROCEEDINGS, THIS MATTER ALSO SHOULD BE RESTORED TO THE FILE OF THE ASSESSING OFFICER. 8. WE HAVE HEARD THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE RECORD. IT IS AN ADMITTED FACT THAT THE CLAIM OF D EDUCTION U/S 24(B) WAS DENIED BY THE ASSESSING OFFICER ON THE GROUND THAT SUCH CLAIM WAS DISALLOWED IN THE EARLIER YEARS. WE FIND, THE TRIBUNAL, IN ASSESSEES OWN CA SE FOR ASSESSMENT YEAR 2009-10, HAD RESTORED THE MATTER TO THE FILE OF THE ASSESSIN G OFFICER FOR VERIFYING AND ASCERTAINING THE AMOUNT OF LOAN UTILIZED FOR THE BU ILDING IN RESPECT OF WHICH RENTAL INCOME ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY WAS EARNED. WE FIND, THE ASSESSING OFFICER, IN THE ORDER PASSED U/ S 250/143(3) ON 29 TH JANUARY, 2016, HAS ALLOWED THE CLAIM OF DEDUCTION U/S 24(B) OF THE ACT AMOUNTING TO RS.14,53,153/-. WE ALSO FIND THE TRIBUNAL IN ASSES SEES OWN CASE FOR ASSESSMENT YEAR 2010-11 HAD DIRECTED THE ASSESSING OFFICER TO ALLOW THE DEDUCTION CLAIMED BY THE ASSESSEE AFTER VERIFYING THE AMOUNT OF LOAN UTI LIZED, INTEREST PAID THEREON AND, THEREAFTER, TO ASSESS THE INCOME FROM THE HOUSE PRO PERTY EARNED BY THE ASSESSEE. THE RELEVANT FINDING OF THE TRIBUNAL AT PARA 10 OF THE ORDER READS AS UNDER:- 10. SO WHEN UNDISPUTEDLY THE ASSESSEE HAS PAID THE INTEREST ON LOAN UTILIZED FOR THE CONSTRUCTION OF PROPERTY HAD SHOWN ITS INCO ME UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY', INTEREST THEREON IS ALLOWABLE DEDUCTION U/S 24B OF THE ACT. SO FOLLOWING THE DECISION RENDERED BY CO-ORDIN ATE BENCH OF TRIBUNAL, WE ITA NO.3305/DEL/2016 5 DIRECT THE AO TO ALLOW THE DEDUCTION CLAIMED BY THE ASSESS AFTER VERIFYING THE AMOUNT OF LOAN UTILIZED, INTEREST PAID THEREON AND THEREAFTER ASSESS THE INCOME FROM THE HOUSE PROPERTY EARNED BY THE ASSESSEE, BY (UNIVERSAL PRECISION SCREWS) PROVIDING OPPORTUNITY OF BEING HEARD. SO GR OUND NO. 5 AND 8 ARE DETERMINED IN FAVOUR OF THE ASSESSEE. 9. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBU NAL IN ASSESSEES OWN CASE FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, WE D IRECT THE ASSESSING OFFICER TO ALLOW THE DEDUCTION CLAIMED BY THE ASSESSEE AFTER V ERIFYING THE AMOUNT OF LOAN USED, INTEREST PAID THEREON AND, THEREAFTER, ASSESS THE INCOME FROM THE HOUSE PROPERTY EARNED BY THE ASSESSEE, AFTER PROVIDING TH E ASSESSEE AN OPPORTUNITY OF BEING HEARD. THE GROUNDS RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, THE APPEAL FILED BY THE AS SESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 4.09.2019. SD/- SD/- (KULDIP SINGH) (R.K. PANDA) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 24 TH SEPTEMBER, 2019 DK COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI