Pawan Kumar Goel, Ludhiana V. ACIT, Ludhiana

ITA 528/CHANDI/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6181 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-06-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 09-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Assessee Lawyers: S R CHHABRA
• Keywords: Earning of tax free income; Deemed to accrue or arise in india
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.525/CHD/2013 ASSESSMENT YEAR : 2009-10 THE DY. COMMISSIONER OF VS SHRI PAWAN KUMAR GOEL, INCOME TAX, 259, INDUSTRIAL AREA A, CIRCLE VI, LUDHIANA. LUDHIANA. PAN : ABGPG2298F & ITA NO.528/C HD/2013 ASSESSMENT YEAR : 2009-10 SHRI PAWAN KUMAR GOEL, VS THE A.C.I.T., 259, INDUSTRIAL AREA A, CIRCLE VI, LUDHIANA. LUDHIANA. (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI J.S.NAGAR ASSESSEE BY : SHRI S.R.CHHABRA DATE OF HEARING : 25.06.2014 DATE OF PRONOUNCEMENT : 11.07.2014 O R D E R PER SUSHMA CHOWLA, JM THE CROSS APPEALS FILED BY THE REVENUE AND THE ASSE SSEE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)- I, LUDHIANA DATED 27.02.2013 RELATING TO ASSESSMENT YEAR 2009-10 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF TH E INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.4,26,625/- OUT OF TOTAL ADDITION OF RS. 10,61,9007- MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF INTEREST U/S 57 AS THERE IS NO SUCH INFORMATION IN THE 2 CHART FILED DURING THE ASSESSMENT PROCEEDINGS NOR T HERE IS ANY SUCH EXPLANATION GIVEN BY THE ASSESSEE WHICH ESTABLISH T HAT THE AMOUNT OF RS.4,26,425/- REPRESENTS THE AMOUNT GIVEN AS BROKER AGES BY THE ASSESSEE AGAINST SALE OF PROPERTY. 2. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.28,50,000/- AND RS.5,56,1447- MADE BY THE A.O. O N ACCOUNT OF DISALLOWANCE OF INTEREST U/S 14A ON INVESTMENT IN S HARES OF THE COMPANIES AND INVESTMENTS IN PARTNERSHIP FIRMS RESPECTIVELY. THE LD. CIT(A) HAS WRONGLY HELD THAT THE PROVISIONS OF SECTION 14A ARE NOT APP LICABLE IN THE INSTANT CASE AS SUCH THERE IS NO SUCH CONDITION THAT THE PROVISI ONS OF SECTION 14A R.W.R. 8D ARE APPLICABLE ONLY ON INVESTMENTS (INCOME FRO M WHICH IS EXEMPT) MADE DURING THE FINANCIAL YEAR UNDER CONSIDE RATION. IN FACT THE ASSESSEE HAS INVESTED IN SHARES AND MUTUAL FUNDS, I NCOME FROM WHICH IS EXEMPT. 3. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.1,11,927/- MADE BY THE A.O. ON ACCOUNT OF INCOME FROM HOUSE PROPERT Y AND APPLYING THE PROVISIONS OF SECTION 23 (1) (C) WHICH ARE APPLICAB LE ONLY IN THE CASES WHERE THE PROPERTIES ARE GIVEN ON RENT BUT REMAIN VACANT FOR A PART OR WHOLE OF THE YEAR. HOWEVER, IN THE INSTANT CASE THE HOUSE PROPER TY HAS NEVER BEEN GIVEN ON RENT AS SUCH THE PROVISIONS OF SECTION 23 (1) (A) ARE APPLICABLE. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL : THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITION OF RS. 480000/- PE RTAINING TO INTEREST AGAINST FUND GIVEN TO J.M. LAND PROMOTERS PVT. LTD. WHICH IS IN FACT GIVEN OUT OF NON BORROWED FUND. 4. THE GROUND NO. 1 RAISED BY THE REVENUE AND THE GROUND NO. 1 RAISED BY THE ASSESSEE ARE INTER-LINKED AND WE PROC EED TO DECIDE THE SAME. 5. THE BRIEF FACTS RELATING TO THE ISSUE ARE THA T DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD RECEIVED INTEREST IN COME OF RS. 124,18,628/- FROM DIFFERENT SOURCES AS TABULATED AT PAGE 7 OF THE ASSESSMENT ORDER UNDER PARA 5. AS AGAINST THE SAID INTEREST INCOME THE ASSESSEE HAD CLAIMED DEDUCTION OF RS. 117,57,159/- I.E. INTEREST PAID TO VARIOUS PARTIES AS TABULATED AT PAGE 7 OF THE ASSES SMENT ORDER. THE ASSESSING OFFICER SHOW CAUSED THE ASSESSEE TO SUBST ANTIATE THAT INTEREST PAYMENTS CLAIMED WERE EXCLUSIVELY FOR THE PURPOSE O F EARNING INTEREST INCOME IN VIEW OF THE PROVISIONS OF SECTION 57 OF T HE INCOME TAX ACT. 3 IN REPLY, THE ASSESSEE SUBMITTED THAT IT HAD USED B ORROWED FUNDS AGAINST ADVANCES/LOANS GIVEN FOR EARNING INTEREST INCOME. FURTHER, ASSESSEE'S OWN CAPITAL WAS ALSO INVESTED IN INTEREST EARNING F UNDS. THE ASSESSING OFFICER WAS OF THE VIEW THAT IN VIEW OF THE PROVISI ONS OF SECTION 57(III) OF THE INCOME TAX ACT, THE CLAIM OF THE ASSESSEE WA S NOT ALLOWABLE. THE ASSESSEE HAD FAILED TO SUBSTANTIATE ITS POSITION. THE ASSESSING OFFICER COMPUTED THE DISALLOWANCE OF INTEREST ON THE OVERDR AWN CAPITAL ACCOUNT OF THE ASSESSEE IN K.LALL OVERSEAS RESULTING IN ADD ITION OF RS. 576,926/-. FURTHER INTEREST WAS DISALLOWED BEING RELATED TO NO N-INTEREST BEARING LOANS/ADVANCES TO M/S SWADESHI MANUFACTURING SYNDIC ATE AT RS. 41,447/- RESULTING IN ADDITION OF RS. 4974/- AND TO M/S J.M. LAND PROMOTERS PVT. LTD. OF RS. 40,00,000/- RESULTING IN ADDITION OF RS . 4,80,000/-. IN TOTAL, THE DISALLOWANCE OF THE INTEREST WAS RS. 10,61,900/ -. 6. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) , ASSESSEE FURNISHED WRITTEN SUBMISSIONS WHICH ARE INCORPORATE D UNDER PARA 7 AT PAGES 4 TO 14 OF THE APPELLATE ORDER. THE ASSESSEE HAD ANALYZED THE ACCOUNT OF EACH OF THE PARTIES TO WHOM THE INTEREST HAD BEEN PAID STARTING FROM THE PERIOD 01.04.2006 I.E. THE YEAR T O WHICH THE AMOUNT RELATED. IT WAS ALSO FURTHER EXPLAINED BY THE ASSE SSEE AS TO WHEN THE LOANS WERE TAKEN FROM VARIOUS SOURCES. THE CASE OF THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) WAS THAT T HERE WAS A DIRECT NEXUS BETWEEN THE FUNDS RECEIVED AND THE FUNDS DEPL OYED FOR INTEREST PURPOSE. THE COMMISSIONER OF INCOME TAX (APPEALS) WAS OF THE VIEW THAT THE LOANS TO M/S SWADESHI MANUFACTURING SYNDIC ATE AND M/S J.M. LAND PROMOTERS PVT. LTD. WERE NOT FOR THE PURPOSE O F EARNING INTEREST INCOME AND HENCE, ADDITION TO THE TUNE OF RS. 484,9 74/- WAS CONFIRMED. IN RESPECT OF NON-INTEREST BEARING FUNDS ADVANCED T O M/S K. LALL OVERSEAS TO THE TUNE OF RS. 48,07,720/-, THE COMMIS SIONER OF INCOME TAX (APPEALS) FROM THE PERUSAL OF THE BANK ACCOUNT NOTED THAT A SUM OF 4 RS. 37,37,960/- REPRESENTED LOAN INSTALLMENT PAID B ACK BY THE ASSESSEE WHICH WAS IN THE NATURE OF INTEREST BEARING FUNDS H AVING BEEN REDUCED AND FURTHER SUM OF RS. 426,625/- REPRESENTED THE AM OUNTS GIVEN AS BROKERAGE AGAINST SALE OF PROPERTY WHICH IN NO WAY COULD BE SAID TO BE USAGE OF FUNDS FOR PERSONAL PURPOSE. THE BALANCE A MOUNT OF RS. 643,135/- OUT OF TOTAL AMOUNT OF RS. 48,07,720/- WA S HELD BY THE COMMISSIONER OF INCOME TAX (APPEALS) TO BE USED FOR NON INTEREST BEARING PURPOSE AND INTEREST @ 12% TOTALING RS. 77, 176/- WAS DISALLOWED AND REST OF THE DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS DIRECTED TO BE DELETED BY THE COMMISSIONER OF INCOME TAX (AP PEALS). 7. THE REVENUE IS IN APPEAL AGAINST THE DELETION O F ADDITION OF RS. 426,625/- AND THE ASSESSEE IS IN APPEAL AGAINST THE ADDITION OF RS. 4,80,000/- PERTAINING TO THE FUNDS ADVANCED TO M/S J.M. LAND PROMOTERS PVT. LTD. THUS, NO APPEAL HAS BEEN FILED BY THE AS SESSEE AGAINST THE ADDITION OF RS. 4974/- AND RS. 77,176/- WHICH HAD B EEN CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS). 8. FIRST COMING TO THE GROUND OF APPEAL RAISED BY THE REVENUE WHEREIN THE DELETION OF ADDITION OF RS. 426,625/- IS AGITAT ED. THE ASSESSEE HAS BROUGHT ON RECORD COMPLETE EVIDENCE IN RESPECT OF A MOUNT RELATABLE TO M/S K.LALL OVERSEAS. THE COMMISSIONER OF INCOME TA X (APPEALS) HAS DEALT WITH THE SAID EXPLANATION OF THE ASSESSEE AT PAGE 15 AND HELD AS UNDER : FURTHER, THE ASSESSING OFFICER HAD REFERRED TO THE APPELLANT'S SUBMISSIONS IN APPELLATE PROCEEDINGS TO THE EFFECT THAT THE NON INTEREST BEARING FUNDS IN M/S K.LALL OVERSEAS WERE TO THE TU NE OF RS.48,07,720/- AND THE SAID OBSERVATION HAD BEEN OBJECTED TO BY TH E AR DURING THE APPELLATE PROCEEDINGS ON THE GROUND THAT NO SUCH AD MISSION HAD BEEN MADE. THE ASSESSING OFFICER THEREFORE WAS ASKED TO CLARIFY THE ISSUE AND IT WAS SUBMITTED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD ENCLOSED A COPY OF ACCOUNT VIDE HIS REPLY DATED 15.12.2011 WHI CH WAS TAKEN AS BASIS FOR MAKING IMPUGNED DISALLOWANCE BY THE ASSES SING OFFICER. THE SAID COPY OF ACCOUNT HAD BEEN PERUSED AND IT IS SEE N THAT OUT OF TOTAL OF RS.48,07,720 /- AN AMOUNT OF RS.37,37,960/- REPRESE NTS LOAN INSTALMENT PAID BACK BY THE ASSESSEE WHICH ARE CLEARLY IN THE NATURE OF INTEREST 5 BEARING FUNDS HAVING BEING REDUCED AND THEREFORE HA VE A DIRECT RELATIONSHIP WITH THE LOWERING INTEREST EXPENDITURE . IT MEANS THAT THE FUNDS TO THIS EXTENT HAVE NOT BEEN USED FOR NON INT EREST BEARING ACTIVITIES AS OBSERVED BY THE ASSESSING OFFICER. FU RTHER, AN AMOUNT OF RS.4,26,625/- REPRESENTS THE AMOUNT GIVEN AS BROKER AGE AGAINST SALE OR PROPERTY WHICH CAN NOT BE, CONSIDERED AS USAGE OF F UNDS FOR PERSONAL PURPOSES/NON BUSINESS PURPOSES AS THE SALE PROCEEDS OF THE TRANSACTION HAVE LED TO REDUCTION IN INTEREST BEARING FUNDS. T HIS LEAVES AN AMOUNT OF RS.6,43,135/- OUT OF THE TOTAL AMOUNT OF RS.48,07,7 20/- WHICH COULD BE TERMED AS USED FOR-NON INTEREST BEARING PURPOSES. T HE INTEREST @ 12% COMES TO L76/- WHICH IS THE DISALLOWANCE TO BE MADE UNDER THIS HEAD. THE OF DISALLOWANCE MADE BY THE ASSESSING OFF ICER IS DIRECTED TO BE DELETED. 9. THE LD. DR FOR THE REVENUE HAS FAILED TO CONTRO VERT THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND IN THE ABSENCE OF THE SAME, WE FIND NO MERIT IN THE GROUND OF APPEAL NO. 1 RAISED BY THE REVENUE AND THE SAME IS DISMISSED. 10. IN RESPECT OF THE ISSUE RAISED BY THE ASSES SEE VIDE GROUND OF APPEAL NO. 1 I.E. IN RESPECT OF THE INTEREST FREE A DVANCE MADE TO M/S J.M. LAND PROMOTERS PVT. LTD., WE FIND THAT THE SAID ADV ANCE WAS MADE IN THE PRECEDING YEARS AND THE ISSUE OF DISALLOWANCE OF IN TEREST RELATABLE TO SUCH ADVANCES AROSE BEFORE THE TRIBUNAL IN ASSESSEE 'S OWN CASE. THE TRIBUNAL IN ITA NO. 1438/CHD/2010 RELATING TO ASSES SMENT YEAR 2007-08 VIDE ORDER DATED 31.10.2011 ANALYZED THE BORROWED F UNDS AVAILABLE WITH THE ASSESSEE AS AGAINST THE INTEREST BEARING FUNDS AND HELD THAT THERE WAS NO MERIT IN DISALLOWANCE OF ANY INTEREST AS DEPLOYE D FUNDS OR INTEREST WAS ALWAYS HIGHER THAN THE BORROWED FUNDS AS PER TH E FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). THE ISSUE RA ISED IN THE PRESENT APPEAL IS RELATABLE TO AN ADVANCE MADE BY THE ASSES SEE IN THE EARLIER YEARS AND IN VIEW OF THE FINDINGS OF THE TRIBUNAL, WE FIND NO MERIT IN DISALLOWANCE OF ANY INTEREST RELATABLE TO SUCH ADVA NCE. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE ADDITION OF RS. 4,80,000/-. THE GROUND OF APPEAL NO. 1 RAISED BY THE ASSESSEE IS TH US, ALLOWED. 6 11. THE GROUND OF APPEAL NO. 2 RAISED BY THE RE VENUE IS IN RELATION TO THE DISALLOWANCE OF INTEREST UNDER SECTION 14A OF THE ACT ON INVESTMENT IN SHARES OF THE COMPANY AND ALSO ON INVESTMENTS IN PARTNERSHIP CONCERNS. 12. THE BRIEF FACTS OF THE CASE ARE THAT THE A SSESSEE HAD MADE INVESTMENTS IN SHARES OF THE COMPANIES AND ALSO HAD MADE INVESTMENT IN THE PARTNERSHIP FIRM. THE ASSESSING OFFICER INVOKI NG THE PROVISIONS OF SECTION 14A READ WITH RULE 8D AND DISALLOWED THE IN TEREST EXPENDITURE AMOUNTING TO RS. 28,50,000/- AND RS. 5,56,144/- REL ATABLE TO INVESTMENT IN SHARES OF COMPANIES AND INVESTMENTS IN PARTNERSH IP FIRMS RESPECTIVELY. 13. THE COMMISSIONER OF INCOME TAX (APPEALS) D ELETED THE ADDITION AS IN THE FACTS OF THE CASE THE AMOUNT OF INTEREST EXPENDITURE WHICH WAS INITIALLY DISALLOWED UNDER SECTION 57 OF THE ACT WA S IDENTIFIED AND INTEREST WAS FOUND TO BE DIRECTLY EXPANDED TO EARN THE TAXABLE INTEREST INCOME. IN OTHER WORDS, THE COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT NO AMOUNT OF INTEREST EXPENDITURE COU LD BE SAID TO BE INCURRED FOR EARNING THE EXEMPT INCOME. 14. ON THE PERUSAL OF RECORD, IT IS APPARENT TH AT THE TOTAL INTEREST EXPENDITURE CLAIMED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WAS RS. 1.17 CR WHICH WAS CLAIMED AS EXPENDITURE AG AINST INTEREST INCOME OF RS. 1.24 CR. IN THE PARAS HEREIN ABOVE, WE HAVE HELD THAT SAID INTEREST EXPENDITURE IS ATTRIBUTABLE TO THE INTERES T EARNING ADVANCES AND HAVE ALLOWED THE SAID INTEREST EXPENDITURE AS A DED UCTION IN THE HANDS OF THE ASSESSEE. AFTER THE SET-OFF OF THE INTEREST EX PENDITURE AGAINST THE INTEREST INCOME, THE BALANCE INCOME UNDER THE HEAD WAS RS. 66,14,617/- WHICH WAS DECLARED AS INCOME OF THE ASSESSEE. HOWE VER, THE COMMISSIONER OF INCOME TAX (APPEALS) HAS CONFIRMED THE DISALLOWANCE 7 OF INTEREST AT RS. 4974/- AND RS. 77,176/- AGAINST WHICH THE ASSESSEE IS NOT IN APPEAL. 15. THE SECOND ASPECT TO BE CONSIDERED IN THE CASE IS THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD NOT EARNE D ANY EXEMPT INCOME. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN CIT, FAR IDABAD VS M/S LAKHANI MARKETING INCL., FARIDABAD [ITA NO. 970 OF 2008 (O&M)] DATED 02.04.2014 HAVE LAID DOWN THAT WHERE THE ASSESSEE I S NOT IN RECEIPT OF ANY EXEMPT INCOME, THEN NO DISALLOWANCE UNDER SECTI ON 14A OF THE ACT IS WARRANTED. IN VIEW OF THE RATIO LAID DOWN BY TH E HON'BLE PUNJAB & HARYANA HIGH COURT IN CIT, FARIDABAD VS M/S LAKHANI MARKETING INCL., FARIDABAD (SUPRA) AND IN THE FACTS OF THE PRESENT C ASE WHERE THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME DURING THE YEAR UN DER CONSIDERATION, WE HOLD THAT THE PROVISIONS OF SECTION 14A READ WIT H RULE 8D ARE NOT APPLICABLE. THE GROUND OF APPEAL NO. 2 RAISED BY T HE REVENUE IS THUS, DISMISSED. 16. THE ISSUE RAISED IN GROUND NO. 3 IS AGAINST DELETION OF ADDITION OF RS. 1,11,927/- MADE ON ACCOUNT OF INCOME FROM HOUSE PROPERTY. 17. THE BRIEF FACTS RELATING TO THE ISSUE ARE T HAT THE ASSESSEE WAS OWNER OF TWO HOUSE PROPERTIES APART FROM ITS SELF O CCUPIED RESIDENTIAL HOUSE AND ASSESSEE HAD NOT DECLARED ANY INCOME IN R ESPECT OF THE SAID TWO PROPERTIES. THE EXPLANATION OF THE ASSESSEE BE FORE THE ASSESSING OFFICER WAS THAT THE ASSESSEE OWNED A PLOT AT ASIAN LAND PROPERTY AND LAND IN BUILDING AT BADDI WHICH WERE BOTH USED FOR BUSINESS PURPOSES. THE ASSESSING OFFICER ESTIMATED THE ANNUAL VALUE OF THE SAID PROPERTIES AND MADE AN ADDITION OF RS. 1,11,927/- ON ESTIMATE BASIS AS NO DETAILS OF HOUSE TAX PAYMENTS WERE FURNISHED BY THE ASSESSEE. 8 18. THE COMMISSIONER OF INCOME TAX (APPEALS) D ELETED THE ADDITION ON THE FACT THAT THE ASSESSEE HAD NOT RECEIVED ANY RENT IN RESPECT OF THE SAID PROPERTIES FOR THE YEAR UNDER CONSIDERATION HE NCE, THE ANNUAL VALUE OF THE SAID PROPERTIES WOULD BE NIL AS PER SECTIO N 23(1)(III) OF THE ACT. 19. THE LD. DR FOR THE REVENUE POINTED OUT THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT CORRECTLY APPLIED THE LAW AND THE PROVISIONS WHICH ARE ATTRACTED IN THE CASE OF THE A SSESSEE ARE SECTION 23(4) OF THE ACT AND AS THE ASSESSEE IS OWNER OF MO RE THAN ONE PROPERTY, THE ANNUAL VALUE OF SUCH PROPERTIES ARE INCLUDIBLE IN THE HANDS OF THE ASSESSEE AS DEEMED INCOME. 20. THE LD. AR FOR THE ASSESSEE ON THE OTHER HA ND, POINTED OUT THAT THE LAND PROPERTY WAS USED FOR ASSESSEE'S OWN BUSINESS ACTIVITY AND ALSO THE BUILDING AT BADDI WAS USED FOR BUSINESS PURPOSE, TH EREFORE BOTH WERE OUTSIDE PURVIEW OF SECTION 22 OF THE ACT. 21. WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED THE RECORD. UNDER THE PROVISIONS OF SECTION 22 OF THE ACT, THE ANNUAL VALUE OF A PROPERTY CONSISTING OF ANY BUILDING OR LAND APPURTE NANT THERETO OF WHICH THE ASSESSEE IS OWNER, SHALL BE CHARGEABLE TO TAX U NDER THE HEAD INCOME FROM HOUSE PROPERTY. THE SAID SECTION FURTHER PRO VIDES THAT SUCH PORTION OF SUCH PROPERTY WHICH THE ASSESSEE MAY OCC UPY FOR THE PURPOSE OF ANY BUSINESS OR PROFESSION CARRIED ON BY HIM, TH E PROFITS OF WHICH ARE CHARGEABLE TO INCOME TAX, THEN THE ANNUAL VALUE OF SUCH PORTIONS OF SUCH PROPERTY ARE NOT INCLUDIBLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE PLEA OF THE ASSESSEE BEFORE THE ASSESSING OFFIC ER WAS THAT IN ADDITION TO THE RESIDENTIAL BUILDING OWNED BY IT WH ICH WAS USED FOR SELF RESIDENCE, ANOTHER BUILDING AT DELHI WAS RENTED AND THE ASIAN LAND PROPERTY AND THE BUILDING AT BADDI WERE UTILIZED FO R BUSINESS PURPOSES AND HENCE, OUTSIDE THE PURVIEW OF SECTION 22 OF THE ACT. THE ASSESSING 9 OFFICER DID NOT ACCEPT THE SAID PLEA OF THE ASSESSE E AND COMPUTED ANNUAL VALUE OF THE PROPERTY AND MADE ADDITION OF RS. 111, 927/-. 22. THE COMMISSIONER OF INCOME TAX (APPEALS) DE LETED THE ADDITION APPLYING PROVISIONS OF SECTION 23(1)(III) OF THE AC T. 23. WE FIND NO MERIT IN THE ORDER OF THE COMMIS SIONER OF INCOME TAX (APPEALS) IN APPLYING THE PROVISIONS OF SECTION 23( 1)(III) OF THE ACT. IN THE FACTS OF THE CASE, ISSUE TO BE SEEN IS WHETHER THE ASSESSEE IS UTILIZING THE SAID PROPERTIES FOR BUSINESS PURPOSES AND HENCE , IN VIEW OF SECTION 22 OF THE INCOME TAX ACT, NO ANNUAL VALUE OF THE SA ID PROPERTIES IS INCLUDIBLE IN THE HANDS OF THE ASSESSEE. THE SAID ASPECT OF THE PROPERTY BEING UTILIZED FOR BUSINESS PURPOSES HAS NOT BEEN C ONSIDERED BY EITHER OF THE AUTHORITIES BELOW. IN THE INTEREST OF JUSTICE, WE DEEM IT FIT TO RESTORE THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER AN D DIRECT THE ASSESSEE TO FURNISH THE EVIDENCE JUSTIFYING ITS CLAIM THAT THE SAID PROPERTIES ARE BEING UTILIZED FOR BUSINESS PURPOSES, PROFITS OF WH ICH ARE CHARGEABLE TO TAX. THE ASSESSING OFFICER SHALL DECIDE THE ISSUE IN LINE WITH THE PROVISIONS OF SECTION 22 OF THE ACT AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO ASSESSEE. THE GROUND OF APPEAL NO. 3 RAISED BY THE REVENUE IS THUS ALLOWED FOR STATISTICAL PURP OSES. 24. IN THE RESULT, APPEAL OF THE REVENUE IS PAR TLY ALLOWED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH JULY,2014. SD/- SD/- ( T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED: 11 TH JULY,2014 POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR ITAT/CHD