SHRI. AJAY NARENDRA BANSAL, Mumbai V. DCIT 8(2)(1), Mumbai

ITA 4543/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3003 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 04-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R KAVITHA
• Keywords: Business income; Revised return
• Section: 80C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 4543 / MUM . /201 9 ( ASSESSMENT YEAR : 20 14 15 ) SHRI AJAY NARENDRA BANSAL JUNCTION OF 2 ND AND 4 TH ROAD NEAR KHAR STATION, KHAR (W) MUMBAI 400 052 PAN AACPB6224B . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 8 ( 2 )( 1 ), MUMBAI . RESPONDENT ASS ESSEE BY : MS. KIRAN MEHTA REVENUE BY : MS. R. KA V ITHA DATE OF HEARING 19 .0 2 .2020 DATE OF ORDER 13.03.2020 O R D E R T HE CAPTIONED APPEAL BY THE ASSESSEE ARISE S OUT OF THE ORDER DATED 29 TH MARCH 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 14, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2014 15. 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO THE DISALLOW ANCE OF INTEREST EXPENDITURE AMOUNTING TO ` 23,25,355. 3. BRIEF FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED HIS RETURN OF INCOME ON 17 TH 2 SHRI AJAY NARENDRA BANSAL MARCH 2015, DECLARING TOTAL INCOME OF ` 16,28,230. SUBSEQUENTLY, THE ASSESSEE FILED A REVISED RETURN OF INCOME ON 9 TH JANUARY 2016, DECLARING THE SAME INCOME AS WAS DECLARED IN THE ORIGINAL RETURN OF INCOME. HOWEVER, IN THE REVISED RETURN OF INCOME, THE ASSESSEE CLAIMED THE DEDUCTION OF INTERES T EXPENDITURE AMOUNTING TO ` 23,25,355, AGAINST THE BUSINESS INCOME . W HEREAS , IN THE ORIGINAL RETURN OF INCOME, HE HAS CLAIMED IT AGAINST INCOME FROM OTHER SOURCES. NOTICING THE ABOVE, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO FURNISH THE DETAILS O F LOAN TAKEN ON WHICH THE INTEREST WAS PAID . ON PERUSAL OF THE DE TAILS FURNISHED BY THE ASSESSEE THE ASSESSING OFFICER OBSERVED THAT THE INTEREST EXPENDITURE PERTAINS TO LOAN TAKEN BY THE AS SESSEE AGAINST RESIDENTIAL PROPERTY. THEREFORE, HE HELD THAT THE I NTEREST EXPENDITURE ALONG WITH PRINCIPLE REPAID WOULD QUALIFY FOR DEDUCTION UNDER SECTION 24(B) AND SECTION 80C OF THE ACT. ACCORDINGLY, T HE ASSESSING OFFICER DISALLOWED THE INTEREST EXPENDITURE OF ` 23,25,355. THE ASSESSEE CONTESTED THE AFORESAID DISALLOW ANCE BEFORE THE FIRST APPELLATE AUTHORITY WITHOUT ANY SUCCESS. 4. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , IDENTICAL ISSUE CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2011 12 AND AFTER CONSIDERING THE FACTS AND MATERIAL ON RECORD, THE TRIBUNAL IN ITA NO.4949/MUM./2018, DATED 20 TH AUGUST 2019, HAS ALLOWED ASSESSEES CLAIM OF INTEREST EXPENDITURE. 3 SHRI AJAY NARENDRA BANSAL THUS, S HE SUBMITTED , THE DISALLOWANCE MADE BY THE ASSESSING OFFICER SHOULD BE DELETED. 5. THE LEARNED DEPARTMEN TAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER AND LEARNED COMMISSIONER (APPEALS). 6. I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ONLY REASON ON WHICH THE ASSESSING OFFICER HAS DISALLOWED THE INTEREST EXPENDITURE AND LEARNED COMMISSIONER (APPEALS) HAS ALSO SUSTAINED SUCH DISALLOWANCE IS , THE LOAN TAKEN BY THE ASSESSEE AGAINST WHICH INTEREST WAS PAID BEING A HOUSING LOAN, THE ASSESSEE CAN ONLY CLAIM DEDUCTION UNDER SECTION 24(B) A ND SECTION 80C OF THE A CT. L EARNED COMMISSIONER (APPEALS) HAS ALSO HELD THAT SUCH INTEREST EXPENDITURE CANNOT BE ALLOWED UNDER SECTION 36(1)(III) OF THE ACT. AS COULD BE SEEN FROM THE FACTS ON RECORD, I N THE ORIGINAL RETURN OF INCOME THE ASSESSEE HAS CLAIMED THE DEDUCTION OF INT EREST EXPENDITURE AGAINST THE INCOME FROM OTHER SOURCES. WHEREAS , IN THE REVISED RETURN OF INCOME THE ASSESSEE HAS CLAIMED DEDUCTION OF INTEREST EXPENDITURE AGAINST THE BUSINESS INCOME. HOWEVER, IN EITHER CASE THE EFFECT ON THE TOTAL INCOME REMAINS THE SAM E AS THE TOTAL INCOME DECLARED BY THE ASSESSEE IN THE ORIGINAL AS WELL AS REVISED RETURN OF INCOME IS AT THE SAME AMOUNT OF ` 16,28,230. NOTABLY, WHILE DECIDING IDENTICAL ISSUE RELATING TO ASSESSEES CLAIM OF INTEREST EXPENDITURE ON THE VERY SAME 4 SHRI AJAY NARENDRA BANSAL LOAN AMOUNT, THE TRIBUNAL IN THE ORDER REFERRED TO ABOVE WHILE ALLOWING ASSESSEES CLAIM HAS HELD THAT THE INTEREST EXPENDITURE HAS TO BE SET OFF AGAINST THE INTEREST INCOME EARNED AND OFFERED UNDER THE HEAD INCOME FROM OTHER SOURCES AS PER SECTION 57 OF THE AC T. THEREFORE, KEEPING IN VIEW THE AFORESAID DECISION OF THE CO ORDINATE BENCH IN ASSESSEES OWN CASE, THE INTEREST EXPENDITURE HAS TO BE ALLOWED. I MAY FURTHER ADD , SINCE IN THE IMPUGNED ASSESSMENT YEAR THE EFFECT OF ALLOWANCE OF INTEREST EXPENDITURE WHETH ER FROM INCOME FROM OTHER SOURCES OR AGAINS T BUSINESS INCOME WOULD BE TAX NEUTRAL, I DO NOT INTEND TO DELIBERATE MUCH ON THE ISSUE, WHETHER IT SHOULD BE ALLOWED AGAINST BUSINESS INCOME OR INCOME FROM OTHER SOURCES. WITH THE AFORESAID OBSERVATIONS, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED AS INDICATED ABOVE. 7. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN C OURT ON 13.03.2020 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 13.03.2020 5 SHRI AJAY NARENDRA BANSAL COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI