MANISHA AJAY SHAH, MUMBAI V. ITO 24(2)(4), MUMBAI

ITA 5785/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2188 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 31-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 18-09-2012
• Court: TRIBUNAL
• Department Lawyers: VIVEK BATRA
• Assessee Lawyers: MAYUR A SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN , JM ./ ITA NO . 5785 / MUM/20 12 ( / ASSESSMENT YEAR : 2008 - 2009 ) MANISHA AJAY SHAH 601/602, ADARSH HARMONY, ADARS H VIHAR COMPLEX, OFF MARVE ROAD, MUMBAI 400 064 VS. ITO 24(2)(4) ROOM NO. 605, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI 400 051 ./ ./ PAN/GIR NO. : ANGPS 4878 K ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI VIVEK BATRA (DR) /ASSESSEE BY : SHRI MAYUR A. SHAH / DATE OF HEARING : 10/09/2015 / DATE OF PRONOUNCEMENT 09/12 /2015 / O R D E R PER R. C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A), FOR THE ASSESSMENT YEAR 2008 - 2009 , IN THE MATTER OF ORDER PASSED U/S. 143 ( 3 ) OF THE I.T. ACT. 2. FIRST GRIEVANCE OF THE ASSESSEE RELATES TO DISALLOWANCE CLAIMED FOR DEDUCTIO N OF EXPENSES AT RS.1 , 752/ - AGAINST RENTAL INCOME. SIMILARLY IN GROUND 2 , ASSESSEE RAISED OBJECTION AGAINST THE ORDER OF ASSESSING OFFICER DISALLOWING A CLAIM FOR DEDUCTION OF EXPENSES AT RS.1,69,559/ - AGAINST RENTAL INCOME OF PALM SPRING OFFICE PREMISES. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED . DURING THE YEAR, ASSESSEE HAD OFFERED RENTAL INCOME IN RESPECT OF SUKH SAGAR OFFICE ITA NO.5785/M/2012 (ASSESSMENT YEAR 200 8 - 2009) 2 PREMISES AND PALM SPRING OFFICE PREMISES. HOWEVER, THE ASSESSING OFFICER DECLINED THE ASSESSEES CLAIM OF DEDUCTIO N IN RESPECT OF MAINTENANCE CHARGES PAID TO SOCIETY. BY IMPUGNED ORDER CIT(A) CONFIRMED T HE ASSESSING OFFICER S ACTION AGAINST WHICH , ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOUND THAT ISSUE OF DEDUCTION ON ACCOUNT OF LOCAL TAXES , SOCIETY CHARGES, W HILE COMPUTING INCOME FROM HOUSE PROPERTY HAVE BEEN CONSIDERED AND ALLOWED IN FAVOUR OF ASSESSEE IN THE FOLLOWING CASE LAWS: - I. SHARMILA TAGORE V/S JT. CIT (2005) 93 TTJ (MUMBAI) 483 II. REALTY FINANCE & LEASING (P) LT D. V/S ITO (2006) 5 SOT 348 (MUM) III. J.B. PATEL & CO. V/S. DY. CIT 118 ITD 556 (AHD.) 5. EXPENSES CLAIMED BY THE ASSESSEE PERTAINS TO SOCIETY MAINTENANCE CHARGES WHICH ARE COVERED BY THE ORDERS OF THE ABOVE BENCHES. RESPECTFULLY, FOLLOWING THE SAME, WE DIREC T THE AO TO ALLOW THE SAME WHILE COMPUTING IN COME FR OM HOUSE PROPERTY. 6. NEXT GRIEVANCE RELATES TO DISALLOWANCE OF RS.4,11,473/ - BY WAY OF INTEREST CLAIMED AS A DEDUCTION AGAINST INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY . THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAD NOT TAKEN ANY SPECIFIC LOAN FOR THE PURPOSE OF ACQUISITION OF THE PROPERTY THOUGH THE ASSESSEE HAD TAKEN LOANS BUT THERE WERE NO EVIDENCE TO SHOW THAT BORROWED FUNDS HAVE BEEN UTILIZED TO ACQUIRE THE ABOVE PROPERTY. SINCE THE ONUS HAS NOT BEEN DISCHARGED, THE ASSESSING ITA NO.5785/M/2012 (ASSESSMENT YEAR 200 8 - 2009) 3 OFFICER DID NOT ALLOW THE DEDUCTION OF INTEREST PAYMENT WHILE COMPUTING THE INCOME UNDER THE HEAD HOUSE PROPERTY. 7. W E HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOUND THAT WHILE COMPUTING THE INCOME FROM H OUSE PROPERTY ASSESSEE CLAIMED DEDUCTION OF INTEREST ON FUNDS BORROWED . THE ASSESSING OFFICER FOUND THAT THE FUNDS WERE NOT UTILIZED FOR ACQUIRING THE HOUSE; THEREFORE, DEDUCTION OF INTEREST WAS NOT ALLOWED FROM HOUSE PROPERTY INCOME . HOWEVER, WE FOUND THA T INTEREST WAS ACTUALLY PAID AND ASSESSEE ALSO EARNED INTEREST INCOME. THEREFORE, INTEREST EXPENDITURE IS ALLOWABLE AGAINST INTEREST INCOME SO EARNED IF IT IS FOUND THAT INTEREST EXPENDITURE WAS INCURRED FOR EARNING INTEREST INCOME. IN THE INTEREST OF JUST ICE, W E RESTORE BACK THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING AFRESH AS PER LAW. 8 . AS A RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 09/12 / 201 5 . SD/ - SD / - ( SANDEEP GOSAIN ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 09/12 /2015 NEELAM / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//