DCIT, Chandigarh V. Sh. Surinder Kumar Singal, Chandigarh

ITA 337/CHANDI/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8518 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-01-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 08-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B M MONGA SH ROHIT KAURA
• Assessee Lawyers: MANJIT SINGH
• Keywords: Tax effect

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. RANO JAIN, ACCOUNTANT MEMBER ITA NOS. 366/CHD/2015 ASSESSMENT YEAR : 2010-11 SH. SURINDER KUMAR SINGAL VS. THE DCIT, CIRCLE 5( 1), CHANDIGARH CHANDIGARH PAN NO. ADYPS5462P & ITA NOS. 337/CHD/2015 ASSESSMENT YEAR : 2010-11 THE DCIT, CIRCLE 5(1), VS. SH. SURINDER KUMAR SIN GAL CHANDIGARH CHANDIGARH PAN NO. ADYPS5462P (APPELLANT) (RESPONDENT) APPELLANT BY : SH. B.M. MONGA SH. ROHIT KAURA RESPONDENT BY : SH. MANJIT SINGH DATE OF HEARING : 27.01.2016 DATE OF PRONOUNCEMENT : 29.01.2016 ORDER PER H.L.KARWA, VP THESE TWO APPEALS BY THE ASSESSEE AND REVENUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2 2. FIRSTLY, WE WILL TAKE UP ITA NO. 366/CHD/2015. I N THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDING THE AD DITION OF RS. 56,000/- ON ERRONEOUS BASIS AND ALTOGETHER IGNORING THE REPLY OF THE APPELLANT THAT THE PROPER TY AT PITAMPURA IS SELF OCCUPIED SINCE ITS PURCHASE. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDING THE AD DITION OF RS. 4,95,964/- WHILE DISALLOWING THE INDEXED COS T OF FLAT AT PITAMPURA, DELHI IGNORING DETAILS OF PURCHA SE PARTICULARS ALREADY ON RECORD I.E. SALE-DEED AND F LAT ACCOUNT, WHICH IS ADMISSIBLE EVIDENCE. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE HAD A FLAT IN PITAMPURA, DELHI WHICH WAS SOLD ON 10.8.2009. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ASKE D ABOUT THE STATUS OF THIS FLAT AS TO WHETHER IT WAS SELF OCCUPIED BUT ASSESSEE DID NOT FILE ANY REPLY TO THE ASSESSING OFFICERS QUERY. IN THE ABSENCE OF ANY RE PLY FROM THE ASSESSEE, THE ASSESSING OFFICER ESTIMATED THE RENTAL INCOME OF TH IS PROPERTY AT RS. 20,000/- PER MONTH. ACCORDINGLY, THE ASSESSING OFFICER WORKE D OUT THE ALV FOR FOUR MONTHS WHICH CAME TO RS. 80,000/- AND INCOME UNDER THE HEAD HOUSE PROPERTY WAS ASSESSED AT RS. 56,000/- AFTER ALLOWING DEDUCTI ON U/S 24(A) OF THE INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT'). 4. ON APPEAL, THE CIT(A) REJECTED THE CLAIM OF THE ASSESSEE OBSERVING AS UNDER:- 4.3 I HAVE CONSIDERED THE SUBMISSION OF LD. COUNSEL AND DISCUSSED THE MATTER WITH THE ASSESSING OFFICER. TH E ASSESSING OFFICER HAD QUESTIONED THE APPELLANT ABOUT THE RENT AL INCOMES RECEIVED FROM VARIOUS PROPERTIES OWNED BY HIM AND T HE 3 APPELLANT HAD NOT CLARIFIED THAT THE PITAMPURA FLAT WAS SELF- OCCUPIED PROPERTY. THE APPELLANT HAS NOT FILED ANY EVIDENCE EVEN IN THE APPELLATE PROCEEDINGS TO SUBSTANTIATE H IS CLAIM THAT IN THIS PROPERTY WAS SELF-OCCUPIED. THEREFORE, IT IS HELD THAT THE ASSESSING OFFICER WAS CORRECT IN ESTIMATIN G THE RENTAL INCOME OF THIS PROPERTY. THE ESTIMATION OF LAND MAD E BY THE ASSESSING OFFICER AT THE RATE OF RS. 20,000/- PER M ONTH IS QUITE REASONABLE. THE ADDITION MADE ON THIS ACCOUN T IS ACCORDINGLY CONFIRMED. GROUND OF APPEAL NO.3 IS DIS MISSED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. SHRI B.M.M ONGA, LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THE ASSESSING O FFICER HAS MADE THE ADDITION UNDER THE HEAD INCOME FROM HOUSE PROPERTY FOR FO UR MONTHS PRESUMING AN ALV AT RS. 20,000/- PER MONTH. ACCORDING TO LD. CO UNSEL FOR THE ASSESSEE, THE ASSESSING OFFICER HAS MADE THE IMPUGNED ADDITION ON PRESUMPTION BY IGNORING THE FACT THAT THE PROPERTY AT PITAMPURA IS SELF-OCC UPIED AND AS SUCH NO ALV FOR SELF-OCCUPIED PROPERTY CAN BE TAXED AS PER SECTION 23(2) OF THE ACT. HE FURTHER POINTED OUT THAT THE ASSESSING OFFICER SHOULD HAVE SOUGHT CLARIFICATION FROM THE ASSESSEE. ON THE OTHER HAND, SHRI MANJIT SINGH LD . DR SUBMITTED THAT THE ASSESSEE NEVER CLARIFIED THAT THE PITAMPURA FLAT WA S SELF-OCCUPIED PROPERTY. HE FURTHER POINTED OUT THAT THE ASSESSEE FAILED TO FIL E ANY EVIDENCE EVEN DURING THE APPELLATE PROCEEDINGS BEFORE THE CIT(A) TO SUBSTANT IATE HIS CLAIM THAT PITAMPURA FLAT WAS SELF OCCUPIED PROPERTY. CONSIDERING THE E NTIRE FACTS AND CIRCUMSTANCES AND CIRCUMSTANCES OF THE PRESENT CASE, WE ARE OF TH E VIEW, THAT THE ISSUE NEEDS TO BE VERIFIED AT THE LEVEL OF THE ASSESSING OFFICE R. IN OUR OPINION, THE ONUS IS UPON THE ASSESSEE TO PROVE THAT THE PITAMPURA FLAT WAS SELF-OCCUPIED PROPERTY AND THE ASSESSING OFFICER SHOULD VERIFY THE CLAIM O F THE ASSESSEE. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(A) AND REMAND THE MATTER TO THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER AFFORDING DUE AND REASONABLE OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. FOR STATISTICAL PURPOSES, GROUND NO.1 OF THE APPEAL IS ALLOWED. 4 6. GROUND NO.2 OF THE APPEAL READS AS UNDER:- 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDING THE ADDITION O F RS. 4,95,964/- WHILE ALLOWING THE INDEXED COST OF FLAT AT PITAMPURA, DELHI IGNORING DETAILS OF PURCHASE PARTI CULARS ALREADY ON RECORD I.E. SALE-DEED AND FLAT ACCOUNT , WHICH IS ADMISSIBLE EVIDENCE. 7. THE FACTS RELATING TO THIS ISSUE ARE THAT ON 10. 8.2009, THE ASSESSEE SOLD A FLAT IN PITAMPURA, DELHI. THE ASSESSING OFFICER ADD ED AN INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY FOR FOUR MONTHS TAKING INTO AN LAV AT RS. 20,000/- PER MONTH FOR FOUR MONTHS. FURTHER, THE A SSESSING OFFICER DISALLOWED THE INDEXED COST OF THIS FLAT ON THE PREMISE THAT N O PURCHASE DEED WAS FILED BY THE ASSESSEE AND A SUM OF RS. 4,95,964/- WAS ADDED UNDER THE HEAD LONG TERM CAPITAL GAIN 8. ON APPEAL, THE CIT(A) HELD AS UNDER:- 6.3 I HAVE CONSIDERED THE SUBMISSION OF THE LD. CO UNSEL. THE MAIN CONTENTION OF THE LD. COUNSEL IS THAT THE PURCHASE DETAILS ARE MENTIONED IN THE SALE DEED, BU T THIS IS NOT A SUFFICIENT EVIDENCE TO SUBSTANTIATE THE CL AIM THAT THE PROPERTY WAS PURCHASED ON THAT DEED I.E. 15.05. 1992. THE APPELLANT DID NOT PRODUCE THE PURCHASE DEED BEF ORE THE ASSESSING OFFICER OR BEFORE ME IN THE APPELLATE PROCEEDINGS M THE ABSENCE OF WHICH BENEFIT OF INDEX ATION CANNOT BE ALLOWED. THE ACTION OF THE ASSESSING OFFI CER IN NOT ALLOWING BENEFIT OF INDEXATION IS ACCORDINGLY U PHELD. IT IS ALSO SEEN THAT IN THE ABSENCE OF ANY EVIDENCE REGARDING DATE OF PURCHASE, THE CAPITAL GAIN ON SAL E OF THIS PROPERTY IS REQUIRED TO BE ASSESSED AS SHORT T ERM CAPITAL GAIN AND NOT AS LONG TERM CAPITAL GAIN. THE ASSESSING OFFICER IS ACCORDINGLY DIRECTED TO RECTIF Y THE 5 ORDER OF ASSESSMENT TO TAX THE AMOUNT ON SALE OF TH IS PROPERTY AS SHORT TERM CAPITAL GAIN. GROUND OF APPE AL NO. 5 IS DISMISSED. 9. AFTER HEARING THE LD. REPRESENTATIVES OF BOTH TH E PARTIES, WE FIND THAT THE ASSESSEE FAILED TO PRODUCE THE PURCHASE DEED BEFORE THE LOWER AUTHORITIES AND IN THE ABSENCE OF THE SAME, THE BENEFIT OF INDEXATION WAS DISALLOWED. IT IS ALSO OBSERVED THAT IN THE ABSENCE OF ANY EVIDENCE REGARD ING DATE OF PURCHASE, THE CIT(A) HELD THAT THE CAPITAL GAIN FROM SALE OF PRO PERTY IN DISPUTE SHOULD BE ASSESSED AS SHORT TERM CAPITAL GAIN AND NOT AS L ONG TERM CAPITAL GAIN. SHRI B.M. MONGA, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ASSESSEE HAS SUBMITTED A COPY OF THE FLAT ACCOUNT SHOWING OF PUR CHASE DATE AS 15.5.1992. HE FURTHER SUBMITTED THAT THERE WAS COMPLETE REFERENCE TO PURCHASE PARTICULARS AT PAGE 5 OF THE SALE DEED FILED BEFORE THE ASSESSING OFFICER. TAKING INTO CONSIDERATION THE ENTIRE FACTS OF THE PRESENT CASE, WE ARE OF THE VIEW, THAT THE ASSESSING OFFICER SHOULD GIVE PROPER OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE RELEVANT EVIDENCE TO SUBSTANTIATE HIS CLAIM. THE AS SESSING OFFICER IS DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE AND DECIDE THE ISS UE AFRESH IN ACCORDANCE WITH LAW. THIS GROUND OF APPEAL IS ALSO ALLOWED FOR STA TISTICAL PURPOSES. 10. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES. ITA NO. 337/CHD/2015 :- 11. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF CIT(A)- 2, CHANDIGARH DATED 3.1.2015 RELATING TO ASSESSMEN T YEAR 2010-11. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUND S:- 6 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE WITHOUT APPRECIATING THE FACTS OF THE CASE . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN DELETING THE ADDITI ON OF RS. 10,24,926/- MADE BY THE AO BY DETERMINING THE AN NUAL LETTABLE VALUE (ALV) OF 3 RD PROPERTY WHICH THE ASSESSEE HAS SHOWN AS NIL, PARTICULARLY WHEN THE TDS SCHEDUL E OF INCOME TAX RETURN READ WITH FORM 26AS CLEARLY REVEA LS THAT THE ASSESSEE HAS RECEIVED RENTAL INCOME FROM T HREE TENANTS DURING THE YEAR UNDER CONSIDERATION AND THE FACT THAT THE ASSESSEE WAS IN RECEIPT OF RENT FROM THREE TENANTS DURING PRECEDING YEARS ALSO AS PER THE RETURNS FILE D BY THE ASSESSEE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, LD C1T(A) HAS ERRED IN DELETING THE ADDITION M ADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF INTEREST U/S 36(L)(III) AMOUNTING TO RS. 9,54,000/- BY ASSIGNI NG THE REASON THAT INTEREST INCOME EARNED BY THE A SSESSEE WAS MORE THAN THE INTEREST DEBITED TO THE P&L ACCOUNT WITHOUT RECORDING THE FINDING THAT THE SOUR CES OF INTEREST INCOME DECLARED AMOUNTING TO RS. 19,44,609 /- HAD DIRECT NEXUS WITH INTEREST BEARING FUNDS ON ACCOUNT OF WHICH RS. 18,90,812/- HAS BEEN CLAIMED AS EXPENDI TURE BY THE ASSESSEE. 12. AFTER HEARING THE LD. REPRESENTATIVES OF BOTH T HE PARTIES, WE FIND THAT IN THIS APPEAL OF THE REVENUE, THE TAX EFFECT DOES N OT EXCEED THE MONETARY LIMIT OF RS. 10 LAKHS. THUS, IN VIEW OF CIRCULAR NO. 21/ 2015 DATED 10.12.2015, F.NO. 279/MISC.142/2007-ITJ(PT), GOVERNMENT. OF INDIA, MI NISTRY OF FINANCE, DEPARTMENT OF REVENUE, CENTRAL BOARD OF DIRECT TAXE S, THE INSTANT APPEALS DESERVES TO BE TREATED AS WITHDRAWN / NOT PRESSED. VIDE PARA 10 OF THE ABOVE INSTRUCTIONS, THE CBDT HAS CLARIFIED THAT THIS INST RUCTION WILL APPLY 7 RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO B E FILED HENCEFORTH IN ITAT. THE CBDT HAS FURTHER CLARIFIED THAT THE PENDING APP EALS BEFORE THE TRIBUNAL BELOW THE SPECIFIED TAX LIMITS I.E. RS. 10 LAKHS MA Y BE WITHDRAWN / NOT PRESSED BY THE REVENUE. IT IS ALSO OBSERVED THAT THE ISSUE INVOLVED IN THIS APPEAL IS NOT COVERED BY PARA 8 (EXCEPTIONS) OF THE ABOVE INSTRUC TIONS. ACCORDINGLY, THE APPEAL FILED BY THE REVENUE IS TREATED AS WITHDRAWN / NOT PRESSED. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.01.2016 SD/- SD/- (RANO JAIN) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 29 TH JANUARY, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR