Mr. Vijay Agarwal, Meerut V. DCIT, Faridabad

ITA 5435/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5794 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2009-2010
• Appeal Filed On: 20-10-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: P S KASHYAP
• Keywords: Question of law; Wrong claim
• Section: 80C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER AND SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.5434/DEL/2016 ASSESSMENT YEARS: 2008-09 VIJAY AGGARWAL C/O M/S. KASHYAP & CO. CAS, 214, CITI CENTRE, BEGUM BRIDGE ROAD, MEERUT 250001 PAN NO. AAZPA6461C VS DCIT CENTRAL CIRCLE- 1 FARIDABAD (APPELLANT) (RESPONDENT) ITA NO.5435 /DEL/2016 ASSESSMENT YEARS: 2009-10 VIJAY AGGARWAL C/O M/S. KASHYAP & CO. CAS, 214, CITI CENTRE, BEGUM BRIDGE ROAD, MEERUT 250001 PAN NO. AAZPA6461C VS DCIT CENTRAL CIRCLE- 1 FARIDABAD (APPELLANT) (RESPONDENT) APPELLANT BY SH. P. S. KASHYAP, CA RESPONDENT BY SH. S. S. RANA, CIT DR DATE OF HEARING: 07/08/2019 DATE OF PRONOUNCEMENT: 09/08/2019 ORDER PER N. K. BILLAIYA, AM: ITA NO.5434/DEL/2016 AND 5435/DEL/2016 ARE TWO APPE ALS BY THE ASSESSEE PREFERRED AGAINST THE ORDER OF THE CIT(A)-3, GURGAON DATED 16.08.2016 PERTAINING TO A. Y.2008-09 AND 2 2009-10. BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CO NVENIENCE. 2. IN BOTH THE APPEALS THE COMMON GRIEVANCE IS THAT THE CIT(A) ERRED IN CONFIRMING THE PENALTY LEVIED U/S. 271 (1) (C) OF THE ACT. SINCE UNDER LYING FACTS IN THE ISSUES ARE COMMON, W E DEEM IT FIT TO DISPOSE BOTH THE APPEALS BY THIS COMMON ORDER FO R THE SAKE OF CONVENIENCE AND BREVITY. 3. WHILE DISPOSING THESE APPEAL WE HAVE CONSIDERED THE FACTS OF ITA NO.5434/DEL/2016. 4. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE ASS ESSMENT ORDER DATED 23.12.2011 FRAMED U/S. 153 A R.W.S 143 (3) OF THE ACT. 5. WHILE SCRUTINIZING THE RETURN OF INCOME THE ASSE SSING OFFICER FOUND THAT THE ASSESSEE HAS SHOWN RENTAL INCOME OF RS.60,000/- AND CLAIMED DEDUCTION U/S.24(A)(B) @ 30% AMOUNTING TO RS.18,000/- AND ALSO CLAIMED INTEREST ON LOAN AMOUN TING TO RS.2,61,152/- AND UNDER THE HEAD INCOME FROM HOUSE PROPERTY A LOSS OF RS.219152/- WAS DECLARED. THE ASSESSING OFFICER WAS OF THE OPINION THAT THE ASSESSEE HAS WRONGLY CLAIMED D EDUCTION OF RS.261152/-AND HAS SHOWN BOGUS RENTAL INCOME OF RS. 60,000/-. 6. EXPLANATIONS WERE CALLED FROM THE ASSESSEE IN RE SPECT OF THE RENTAL INCOME SHOWN AND INTEREST ON HOUSING LOAN CL AIMED. NOT CONVINCED WITH THE REPLY OF THE ASSESSEE THE ASSESS ING OFFICER MADE ADDITION OF RS.319152/-. 3 7. THE QUARREL TRAVELLED UP TO THE TRIBUNAL AND THE TRIBUNAL IN ITA NO.307-311/DEL/2013 DISMISSED THE APPEAL OF THE ASSESSEE VIDE ORDER DATED 15.10.2014. 8. PENALTY PROCEEDINGS U/S. 271 (1) (C) OF THE ACT WERE SEPARATELY INITIATED AND THE ASSESSEE WAS ASKED TO EXPLAIN WHY PENALTY SHOULD NOT BE LEVIED ON THE DISALLOWANCES C ONFIRMED BY THE CIT(A). THE ASSESSEE EXPLAINED THAT IT HAS REC EIVED RENTAL INCOME FROM A RESIDENTIAL HOUSE AND HAS CLAIMED INT EREST ON HOUSING LOAN AND, THEREFORE, IT IS NOT A FIT CASE T O LEVY OF PENALTY U/S. 271 (1) (C) OF THE ACT. 9. THE REPLY OF THE ASSESSEE DID NOT FIND ANY FAVOU R WITH THE ASSESSING OFFICER WHO WAS CONVINCED THAT THE ASSESS EE HAS WRONGLY CLAIMED DEDUCTION U/S. 24 (A) (B) OF THE AC T AND U/S. 80 C OF THE ACT AND PROCEEDED BY LEVYING PENALTY OF RS.1 ,08,479/-. 10. ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) B UT WITHOUT ANY SUCCESS. 11. FOR THE FIRST TIME BEFORE US THE COUNSEL FOR TH E ASSESSEE QUESTIONED THE VALIDITY OF THE PENALTY NOTICE WHICH IS AT PAGE 1 OF THE PAPER BOOK. IT IS THE SAY OF THE COUNSEL THAT THE ASSESSING OFFICER HAS NOT SPECIFIED UNDER WHICH LIMB OF SECTI ON 271 (1) (C ) OF THE ACT THE PENALTY HAS BEEN LEVIED. FOR THIS PROP OSITION RELIANCE WAS PLACED ON VARIOUS JUDICIAL DECISIONS. 4 12. ARGUING ON THE MERITS OF THE CASE THE COUNSEL S TATED THAT THERE ARE AMPLE EVIDENCE TO SHOW THAT A RESIDENTIAL HOUSE WAS PURCHASED FOR WHICH LOAN WAS SANCTIONED BY ICICI BA NK AND THEREFORE, THE CLAIM OF THE ASSESSEE IS GENUINE WHI CH REQUIRES NO LEVY OF PENALTY U/S. 271 (1) (C) OF THE ACT. 13. THE DR STRONGLY SUPPORTING THE ORDERS OF THE LO WER AUTHORITIES STATED THAT THE GROUNDS REGARDING CORRE CT LIMB WAS NEVER TAKEN BEFORE CIT(A), THEREFORE, THIS GROUND D OES NOT ARISE FROM THE ORDER OF CIT(A). IT IS THE SAY OF THE DR THAT THE QUESTION WHETHER CORRECT LIMB OF U/S. 271 (1) (C) IS APPLIED IS A QUESTION OF FACT AND NOT A QUESTION OF LAW, THEREFORE, THE NEW PLEA TAKEN BY THE COUNSEL SHOULD NOT BE ENTERTAINED AT THIS STAGE . ARGUING ON THE MERITS OF THE CASE, THE DR STATED THAT THE ASSE SSEE HAS LOST ALL THE APPEALS AND, THEREFORE, THE CLAIM OF THE ASSESS EE HAS BEEN ESTABLISHED TO BE A WRONG CLAIM BY THE ORDERS OF TH E APPELLATE AUTHORITIES. THE DR JUSTIFIED THE LEVY OF PENALTY. 14. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW AND HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. THE UNDISPUTED FACT IS THAT THE RENTA L INCOME CLAIM BY THE ASSESSEE AND THE INTEREST ON HOUSING LOAN CL AIMED BY THE ASSESSEE DID NOT FIND ANY FAVOUR WITH THE APPELLATE AUTHORITIES. THE TRIBUNAL WHILE DISMISSING THE APPEAL OF THE ASS ESSEE HELD AS UNDER :- 7. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROU GH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ASSCSSEE HAD PURCHASED THE PROPERTY ON 26 DAY OF NOVEMBER 2005 FOR A TOTAL CONSIDERATION OF RS.36 LA CS FOR WHICH HE HAD MADE PAYMENT OF RS.36 LACS IN THE FORM OF 3 CHEQUES FOR RS.5 LACS, RS.7.50 LACS AND 5 RS.23,50 LACS VIDE CHEQUES DATED 04.10.2005, 04.10. 2005 AND 25.11.2005. THESE FACTS ARE MENTIONED ON THE COPY OF THE SALE D EED ITSELF WHICH IS PLACED AT PAGES 50-52 AND THESE FINDINGS ALSO SUPPORT FINDING S OF LD. CIT(A). ICICI BANK DISBURSED TIRE AMOUNT OF RS.32 LACS ON 31.12.2005 W HICH IS APPARENT FROM PAPER BOOK PAGE 63 WHERE A COPY OF LETTER ISSUED BY ICICI BANK IS PLACED. THEREFORE, THE LOAN TAKEN BY ASSESSEE FROM ICICI BANK CANNOT BE SA ID TO BE TAKEN FOR THE PURPOSE OF PURCHASE OF THE SAID PROPERTY AS THE SAI D PROPERTY WAS ALREADY PURCHASED ON 25.11.2005 AND FULL PAYMENT OF CONSIDE RATION WAS ALREADY PAID AS IS APPARENT FROM THE COPY OF THE SALE DEED. ONE OF THE FACTORS WHICH WAS TAKEN INTO ACCOUNT BY LD, CIT(A) IS THAT ASSESSEE HAD NOT UTILIZED BORROWED FUNDS FOR ACQUISITION OF PROPERTY. THESE FACTS ARE VERIFIABLE FROM THE COPY OF SALE DEED ITSELF. THEREFORE, IN OUR CONSIDERED OPINION, LD. CIT(A) HA D ARRIVED AT THE CORRECT CONCLUSION THAT DEDUCTION U/S 24(H) AND U/S 80-C CA NNOT BE ALLOWED TO THE ASSESSEE. SECTION 24(A) AND 24(B) DEALS WITH THE DE DUCTIONS FROM HOUSE PROPERTY, WHICH READS AS UNDER: 24. INCOME CHARGEABLE UNDER THE HEAD INCOME FROM H OUSE PROPERTY' SHALL BE COMPUTED AFTER MAKING THE FOLLOW ING DEDUCTIONS, NAMELY> (A) A SUM EQUAL TO THIRTY PER CENT OF THE ANNUAL VALUE : (B) WHERE THE PROPERTY HAS BEEN ACQUIRED, CONSTRUCTED, REPAIRED, RENEWED OR RECONSTRUCTED WITH BORROWED CAPITAL, THE AMOUNT OF ANY INTEREST PAYABLE ON SUCH CAPITAL; ' 7.1 THEREFORE, FROM THE ABOVE, IT IS APPARENT THAT DEDUCTION CAN BE ALLOWED TO ASSESSEE ONLY IF PROPERTY WAS ACQUIRED OUT OF BORRO WED CAPITAL WHICH IS NOT THE CASE IN THE PRESENT APPEALS AS CLEARLY HELD BY LD. CIT(A ) AND BY US. I THEREFORE, LD. CIT(A) HAS RIGHTLY CONFIRMED THE ACTION OF A.O. AS REGARDS DEDUCTION U/S 80C FOR REPAYMENT OF LOANS, WE FIND THAT SECTION 80C ALSO A PPLIES ONLY IF THE REPAYMENT IS MADE FOR LOANS TAKEN FOR ACQUIRING HOUSE PROPERTY A SSETS. IN THE PRESENT CASES, IT HAS BEEN ESTABLISHED THAT LOAN WAS NOT TAKEN FOR TH E PURPOSE OF ACQUIRING ASSET AS ASSET WAS ALREADY ACQUIRED BEFORE DISBURSEMENT OF L OAN. THEREFORE, WE CONFIRM THE ACTION OF LD. CIT(A) TO THIS EFFECT ALSO. IN VIEW O F THE ABOVE, GROUNDS TAKEN BY THE ASSESSEE AGAINST THIS ISSUE IN VARIOUS YEARS IS DEC IDED AGAINST THE. ASSESSEE AND THE ORDER OF LD. CIT(A) IS CONFIRMED. 15. A PERUSAL OF THE ORDER OF THE TRIBUNAL (SUPRA) CLEARLY ESTABLISHES THAT THE ASSESSEE HAD CLAIMED THE RENTA L INCOME AND THE INTEREST ON HOUSING LOAN ON WRONG FACTS. THERE FORE, TO THIS EXTENT WE DO NOT FIND ANY MERITS IN THE CASE OF THE ASSESSEE THAT 6 THE CLAIM WAS BONAFIDE, THOUGH, NOT ALLOWED BY THE REVENUE AUTHORITIES AND, THEREFORE, THE PENALTY LEVIED U/S. 271 (1) (C ) OF THE ACT SHOULD BE DELETED. 16. COMING TO THE PLEA TAKEN FOR THE FIRST TIME BEF ORE US THAT THE PENALTY NOTICE DID NOT SPECIFY UNDER WHICH LIMB OF THE SECTION THE PENALTY PROCEEDINGS HAVE BEEN INITIATED. IN OUR CO NSIDERED OPINION THIS ISSUE WAS NEVER RAISED BEFORE THE FIRS T APPELLATE AUTHORITY AND HAS BEEN RAISED FOR THE FIRST TIME BE FORE THE TRIBUNAL. WE AGREE WITH THE DR THAT THE QUESTION WH ETHER CORRECT LIMB HAS BEEN APPLIED IS A QUESTION OF FACT AND NOT A QUESTION OF LAW. FOR THIS PROPOSITION WE DRAW SUPPORT FROM THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF SUNDAR AM FINANCE 403 ITR 407 WHEREIN THE HONBLE HIGH COURT, INTERAL IA HELD AS UNDER :- (II) THAT ON THE FACTS, EVEN ASSUMING THAT THERE W AS A DEFECT IN THE NOTICES, IT HAD CAUSED NO PREJUDICE T O THE ASSESSEE, WHICH HAD UNDERSTOOD THE PURPORT AND IMPO RT OF THE NOTICES ISSUED UNDER SECTION 274 READ WITH SECT ION 271. IN THE NOTICES THE RELEVANT COLUMNS HAD BEEN MARKED, MORE PARTICULARLY, WHEN THE CASE AGAINST TH E ASSESSEE WAS THAT THEY HAD CONCEALED PARTICULARS AN D HAD FURNISHED INACCURATE PARTICULARS OF INCOME. TH E ISSUE WAS NOT A QUESTION OF FACT. THE ASSESSEE HAD, AT N O EARLIER POINT OF TIME, RAISED THE PLEA BEFORE THE AUTHORITI ES THAT ON ACCOUNT OF THE DEFECT IN THE NOTICES IT WAS PUT TO PREJUDICE. 7 ALL VIOLATIONS DID NOT RESULT IN NULLIFYING THE ORD ERS PASSED BY THE STATUTORY AUTHORITIES. 17. THE HONBLE HIGH COURT WHILE HOLDING THE ABOVE HAS CONSIDERED THE DECISION OF THE HONBLE KARNATAKA HI GH COURT IN 359 ITR 565 IN THE CASE OF MANJUNATHA COTTON & GINN ING FACTORY AND THE DECISION OF HONBLE SUPREME COURT IN THE CA SE OF SSAS EMERALD MEADOWS. CONSIDERING THE JUDICIAL DECISION S (SUPRA) WE DO NOT FIND ANY MERIT IN THE FRESH CLAIM OF THE ASS ESSEE. MOREOVER NEITHER THE ASSESSEE HAS MOVED ANY APPLICATION FOR RAISING ANY ADDITIONAL GROUND NOR HE HAS BEEN ABLE TO BRING OUT ANY QUESTION OF LAW WHICH CAN BE RAISED BEFORE THE APPELLATE AUT HORITY FOR THE FIRST TIME. 18. CONSIDERING THE FACTS OF THE CASE IN QUANTUM PR OCEEDINGS IN THE LIGHT OF THE JUDICIAL DECISION MENTIONED HERE I N ABOVE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE CIT(A). BOTH THE APPEALS FILED BY THE ASSESSEE ARE DISMISSE D. 19. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.08.2019. SD/- SD/- (SUDHANSHU SRIVASTAVA) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOU NTANT MEMBER *NEHA* DATE:- 09.08.2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGI STRAR ITAT NEW DELHI 8 DATE OF DICTATION 08.08.2019. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 08.08.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 08.08.2019 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS 08.08.2019 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 08.08.2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 09.08.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 09.08.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER