Mohini Bindra, New Delhi V. ACIT, New Delhi

ITA 7081/DEL/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4232 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 01-09-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 31-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMRIT LAL
• Assessee Lawyers: P N CHAWLA; RICHA SHARMA
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-II, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A.NO. 7081 /DEL/201 4 A.Y. 20 0 6 - 07 SMT. MOHINI BINDRA E-4, GREATER KAILASH, PART-I, NEW DELHI 110 048 (PAN: AAKPB0681L) VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 23(1), NEW DELHI (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. PN CHAWLA, ADV. & MS. RICHA SHARMA, ADV. DEPARTMENT BY : SH. AMRIT LAL, SR. DR ORDER ORDER ORDER ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 11.11.2014 OF THE LD. CIT(A)-XXIII, NEW DELHI PERT AINING TO ASSESSMENT YEAR 2006-07 ON THE FOLLOWING GROUNDS:- 1. THAT THE ORDER OF THE LD. CIT (A)-XXIII, NEW DEL HI IS CONTRARY TO LAW AND FACTS ON RECORD. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. CIT(A)-XXIII, NEW DELHI WAS JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 4,20,783/- ULS 23(C) READ WITH SECTION 24(B)? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE LD. CIT (A)-XXIII, NEW DELHI WAS JUSTIFIED IN CONFIRMING TH E ADDITION WITHOUT GOING INTO DETAILED FACTS OF THE CASE AND ASSUMING THAT IT WAS A FIVE STOREY BUILDING INSTEAD OF A FOUR STOREY BUILDING. 4. THAT THE LD. CIT (A) HAS WRONGLY APPLIED THE PRO VISION OF SECTION 23(C) READ WITH SECTION 24(B) AS THE PROPERTY WAS V ACANT ONLY FOR THREE AND HALF MONTHS AND THE DISALLOWANCE SHOULD HAVE BEEN 2 BASED ON THE NOTIONAL VALUE AND NOT THE ACTUAL RENT RECEIVED OR RECEIVABLE. ACCORDINGLY THE ADDITION SUSTAINED IS I LLEGAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE F ILED THE RETURN SHOWING TOTAL INCOME OF RS. 21,02,830/- ON 4.10.2006 AND PROCESSE D THE SAME U/S. 143(1) OF THE I.T. ACT, 1961 ON THE SAME INCOME. SUBSEQUENTLY ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED ON 21.11.2008 AT A TOTAL INCOME O F RS. 46,33,200/-. AGGRIEVED WITH THE AFORESAID ASSESSMENT, ASSESSEE P REFERRED AN BEFORE THE LD. CLT(A) WHO DISMISSED THE APPEAL OF THE ASSESSEE AND UPHELD ALL THE ADDITIONS MADE BY THE AO. AGAINST THE LD. CIT(A)'S ORDER, THE ASSESSEE HAS FILED AN APPEAL BEFORE THE ITAT AND FHE ITAT VIDE ORDER DATE D 6.5.2011 PASSED IN ITA NO. 4663/DE1/2009 WAS SET ASIDE THE ORDER OF THE LD . CLT(A) ON THE ISSUE AND RESTORED THE MATTER BACK TO THE FILE OF THE AO FOR RE-ADJUDICATION. ACCORDINGLY, IN COMPLIANCE OF THE ITA T'S DIRECTIONS, A NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 1961 WAS ISSUED ON 15.3.2012 AND IN RESPONSE THERET O THE ASSESSEE'S COUNSEL ATTENDED THE HEARING AND FURNISHED THE WRITTEN SUBM ISSION AND REQUIRED DETAILS. THEREAFTER, THE AO COMPLETED THE ASSESSMENT U/S. 14 3(3)/254 OF THE I.T. ACT, 1961 ON 17.12.2012 AT AN INCOME OF RS. 41,54,330. 3. AGAINST THE ASSESSMENT ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO VIDE HIS IMPUGNED ORDER DATED 11.11. 2014 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 4. AGAINST THE ORDER OF THE LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. DURING THE HEARING, LD. COUNSEL OF THE ASSESSEE STATED THAT THE ASSESSEE MRS MOHINI BINDRA IS OWNER OF THE PROPERTY NO. E-4, GREATER KAILASH-1 SINCE 1971 AND SHE ENTERED INTO COLLABORATION AGREEMENT ON 11- 02-2002 WITH MR AJAY BHARTI WHO HAD TO CONSTRUCT, BASEMENT, GROUND FLOOR , FIRST FLOOR, SECOND FLOOR, 3 THIRD FLOOR AS PER AGREEMENT. BUT HE CONSTRUCTED ON LY BASEMENT, GROUND, FIRST AND SECOND FLOOR AND AS PER AGREEMENT AND TOOK POSSESSI ON OF FIRST FLOOR IN THE YEAR 2003 AND STARTED A RESTAURANT WHICH WAS ILLEGAL AND THE MCD STOPPED THE RUNNING OF THE RESTAURANT. HE FURTHER STATED THAT AJAY BHARTI COULD NOT CONSTRUCT THIRD FLOOR DUE TO INTERVENTION OF SUPREME COURT AS THEY DID NOT ALLOW THIRD FLOOR TO BE CONSTRUCTED. THUS, THERE WERE ONLY BASEMENT, GROUND, FIRST, SECOND FLOOR. IT WAS THE FURTHER CONTENTION THAT MR AJAY BHARTI WA S ENTITLED AS COLLABORATOR FOR THE RIGHTS OF FIRST FLOOR SOLD THE SAME TO MRS MOHI NI BINDRA FOR RS 75,08,000/- FOR WHICH SHE TOOK A LOAN OF RS 2CRORES FROM VIJAYA BAN K AND OUT OF THE REMAINING GAVE LOAN OF RS 90LACS TO WEAVERS ON INTEREST AND T HE REMAINING AMOUNT WAS KEPT FOR RENOVATION OF THE BUILDING. IN THE YEAR 20 06-07 THE ASSESSEE CLAIMED INTEREST ON BORROWED CAPITAL FROM VIJAYA BANK AMOUN TING TO RS. 21,25,049/- AND THE AO DISALLOWED THE INTEREST AGAINST WHICH TH E ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A) WHO HAD CONFIRMED THE ADDITIO N OF RS. 4,20,783/- AGAINST WHICH THE ASSESSEE HAS FILED THE APPEAL BEFORE THE TRIBUNAL. LD. COUNSEL OF THE ASSESSEE ALSO STATED THAT ADDITION OF RS. 4,20,783/ - IS EXCESSIVE AND AS PER THE FOLLOWING CALCULATIONS IT SHOULD BE RESTRICTED TO R S. 1,12,167/- ONLY: A) CALCULATION OF INTEREST PAID TO VIJAYA BANK RS. 21,25,049/ - B) LESS INTEREST RECEIVED BY WEAVERS RS. 10,76,380/ - BALANCE RS. 10,48,669/ - C) THE INTEREST OF RS. 10,48,669/- IS TO BE DIVIDED IN FOUR PARTS I.E. THREE PARTS WHICH WERE TO BE GIVEN ON RENT AND ONE PART FOR SELF OCCUPIED PROPERTY. THUS ONE FOURTH COMES TO RS. 2,62, 167/- LESS DEDUCTION UNDER THE RS. 1,50,000/- HEAD SOP BALANCE RS. 1,12,1 67/- 4 6. ON OTHER HAND, LD. DR HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND STATED THAT THE ORDER OF THE LD. CIT(A) IS A WE LL REASONED AND THE SAME DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, THE S AME MAY BE UPHELD AND ACCORDINGLY, THE APPEAL OF THE ASSESSEE MAY BE DISM ISSED. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES. AFTER PERUSING T HE AFORESAID CALCULATIONS, I AM OF THE CONSIDERED VIEW THAT THE CALCULATIONS SUBMIT TED BY THE LD. COUNSEL OF THE ASSESSEE SEEMS TO BE GENUINE AND REASONABLE, WHICH NEEDS TO BE ACCEPTED. ACCORDINGLY, I ACCEPT THE AFORESAID CALCULATIONS AN D RESTRICT THE ADDITION TO RS. 1,12,167/- AS AGAINST THE ADDITION OF RS. 4,20,783 / AND ALLOW THE GROUND THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/10/2016. SD/- [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 13/10/2016 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 5