CHANDRASHEKHAR J. THAKKAR, MUMBAI V. ASST CIT 16(2), MUMBAI

ITA 5439/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2698 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 26-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N M WANARE
• Assessee Lawyers: NIKHIL P BAJORIA
• Section: 143(3); 142(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE HONBLE S/SHRI JOGINDER SINGH (JM), AND RAJESH KUMAR, ( AM ) ./ I.T.A. NO . 5439 / MUM/20 1 5 ( / ASSESSMENT YEAR : 20 10 - 1 1) CHANDRASHEKHAR J THAKKAR, LAKESIDE NURSING H O ME MUKUT, 1 ST FLOOR, 20 B S V ROAD, BANDRA (W), MUMBAI - 400050 / VS. ASSTT. COMMISSIONER OF INCOME T A X CIR 16(2), 4 TH FLOOR, AAYAKAR BHA VAN , M K ROAD, MUMBAI - 400020 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN/GIR NO. : A APPT1152K / APPELLANT BY: SHRI NIKHIL P BAJORIA / RESPONDENT BY SHRI N M WANARE / DATE OF HEARING : 2 1 .7. 201 6 / DATE OF PRONOUNCEMENT : 6.10 . 2016 / O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AND IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) - 5 , MUMBAI D A T ED 1.9.201 5 PERTAINING TO A.Y. 20 10 - 11 . 2. ONLY ISSUE RAISED IN THE GROUNDS OF APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF INTEREST OF RS.2 , 87 , 562/ - BY THE LD.CIT(A) AS MADE BY THE AO ON ACCOUNT OF INTEREST PAID ON TERM LOAN O N THE GROUND THAT THE SAID LOAN WAS SANCTIONED UNDER HOME LOAN CATEGORY. ITA NO . 5439 / M/1 5 2 3. FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 14.10.2010 DECLARING TOTAL INCOME AT RS.1,00,46,860/ - . THEREAFTER, SCRUTINY PROCEEDINGS WERE INITIATED AGAINST THE ASSESSEE AND STATUT ORY NOTICES UNDER SECTION 143(2) AND 142(1) WERE ISSUED AND SERVED UPON THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAS CHARGED A SUM OF RS.2,87,562/ - TO THE INCOME AND EXPENDITURE ACCOUNT WHICH RELATED TO THE HOUSING LOAN RAISED BY THE ASSESSEE AND WAS NOT DISALLOWED AT THE TIME OF FILING OF RETURN OF INCOME BY THE ASSESSEE SUO MOTTO AND ACCORDINGLY DISALLOWED AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE BY FRAMING THE ASSESSMENT ORDER U/S 143(3) DATED 5.3.2013 ASSESSING THE TOTAL INCOME AT RS.1,01,73,826/ - BY MAKING VARIOUS OTHER DISALLOWANCES. AGGRIEVED BY THE ORDER OF THE AO , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A) AND ARGUED THAT THE ASSESSEE HAD TWO LOANS FROM STANDARD CH ARTERED BANK ,ONE OF RS.1,28,52,038/ - WHICH WAS HOUSING LOAN AND SECOND OF RS.17,91,782/ - WHICH WAS TERM LOAN. THE LD. AR BEFORE THE FIRST APPELLATE AUTHORITY SUBMI TT ED THA T THE AO HAS WRONGLY CONSIDERED SECOND TERM LOAN OF RS. 17,91,781/ - AS HOUSING LOAN ALSO ON THE BASIS OF A LETTER WHICH MENTIONED THAT THE LOAN AS HOME LOAN PRO DUCT AND C ONSEQUENTLY DISALLOWED THE INTEREST OF RS.2,87,562/ - ON THE SAID TERM LOAN . THE LD. CIT(A) ALSO DISMISSED THE APPEAL OF THE ASSESSEE BY OBSERVING AND HOLDING AS UNDER: 6. I HAVE CONSIDERED THE APPELLANT SUBMISSIONS APPELLANT HAD TWO LOANS IN STANDARD CHARTERED BANK ONE IS HOUSING LOAN AND OTHER ONE TERM LOAN. ACCORDING TO APPELLANT TERM LOAN IS FOR RS.17,91,782/ - AND ITA NO . 5439 / M/1 5 3 WHICH A.O. HAD DISALLOWED. INTEREST CLAI M OF THE APPELLANT FOR RS.2,87,562/ - CONSIDERING IT AS HOUSING LOAN. HOWEVER, APPELLANT HAD SUBMITTED THE PERFORMANCE DURING THE APPELLANT PROCEEDINGS AND ON THE PAPERS OF THE SANCTIONED LETTER OF THE HOUSING LOAN AND TERM LOAN, IT IS MENTIONED AS HOUSING PRODUCT LOAN SO IT IS CLEAR FROM THE SUBMISSIONS OF THE APPELLANT THAT THESE LOANS ARE IN THE NATURE OF HOUSING LOAN. HENCE A.O.'S ADDITION IS CONFIRMED. GROUND OF APPEAL IS DISMISSED. 4. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE PARTIES, PERUS ED THE MATERIAL PLACED BEFORE US INCLUDING THE ORDERS OF AUTHORITIES BELOW. WE FIND FROM THE FACTS BEFORE US THAT THE ASSESSEE HAS SWAPPED TERM LOAN AND HOUSING LOAN OF THE ICICI BANK WITH LOANS FROM STANDARD CHARTERED BANK ONE AS HOUSING LOAN OF RS. 1,28,52,038/ - AND SECOND AS TERM LOAN OF RS. 17,91,782/ - . THE INTEREST PAID ON TERM LOAN HAS BEEN CHARGED BY THE ASSESSEE TO THE PROFIT AND LOSS ACCOUNT AS INTEREST EXPENDITURE AMOUNTING TO RS.2,87,562/ - . WE FURTHER NOTE THAT SINCE THE LETTER FROM T HE BANK STATE S THE TERM LOAN UNDER HOME LOAN P RODUCT AND ON THAT BASIS THE AO WRONGLY CONS IDERED THE TERM LOAN TO BE HOUSING LOAN THEREBY DISALLOWING THE INTEREST OF RS.2,87,562/ - . THE FACT WAS ALSO DULY STATED IN THE STATEMENT OF FACTS AS FILED WIT H THE FORM NO.35 BY THE ASSESSEE THAT THE ASSESSEE HAS SWAPPED LOAN S FROM ICICI BAN K WITH FRESH LOAN S TAKEN FROM STANDARD CHARTERED BANK. WE ALSO NOTE THAT NEITHER AO NOR CIT(A) HAS DISPUTED THE FACT OF USI NG THE LOAN FOR THE PURPOSE OF PROFESSION O F THE ASSESSEE. THE CI T(A) MERELY UPHOLD THE ADDITION BY RELYING ON THE SANCTION LETTER AND FINDING OF THE AO WHICH STATES THAT THE TERM LOAN WAS SANCTIONED UNDER HOUSE LOAN PRODUCT . THE LD COUNSEL OF THE ASSESSEE SUBMITTED THAT THE TERM LOAN WAS TAKEN A ND ITA NO . 5439 / M/1 5 4 USED FOR THE PURPOSE OF PROFESSION OF THE ASSESSEE AND WAS NOT HOUSING LOAN. THE UNDISPUTED FACT IS THAT THE TERM LOAN HAS BEEN TAKEN FOR THE PURPOSE OF PROFESSION OF THE ASSESSEE AND INTEREST WAS CLAIMED ACCORDINGLY THOUGH THE TERM LOAN WAS SANCTIONED UNDER HOUSE LOAN PRODUCT. IN OUR OPINION THE ASSESSEE IS RIGHTLY CLAIMED THE INTEREST ON TERM LOAN AS EXPENSE IN THE INCOME AND EXPENDITURE ACCOUNT AND THE ACTION OF THE CIT(A) UPHOLDING THE ORDER OF AO ON THIS ISSUE IS NOT CORRECT. IN VIEW OF THESE FACTS , WE SET ASIDE THE ORDER OF T HE LD.CIT(A) AND DIRECT THE AO TO DELETE THE DIS ALLOW ANCE OF INTEREST OF RS. 2,87,562/ - . 5 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 6 TH OCT , 2016 . 6 TH OCT , 2016 SD SD (JOGINDER SINGH ) ( RAJESH KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 6 TH OCT , 2016 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. 6. , , / DR, ITAT, MUMBAI CONCERNED / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI