Surjit Singh, New Delhi V. DCIT, Circle- 3(1)(2), International Taxation , New Delhi

ITA 870/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9117 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 05-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 133(6); 13

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G: NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO. 870/DEL/2018 ASSTT. YEAR 2013-14 SURJIT SINGH, 23, WEST AVENUE ROAD, PUNJABI BAGH, NEW DELHI 110 026 PAN BCSPS1635Q VS. DCIT, CIRCLE-3(1)(2), INTERNATIONAL TAXATION, NEW DELHI (APPELLANT) (RESPONDENT) O R D E R PER LALIET KUMAR, JM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 29 TH DECEMBER, 2017 OF THE LD. CIT(A)-43, NEW DELHI RELATING TO ASSESSMENT YEAR 2013-14. ASSESSEE BY: SHRI G.S. KOHLI, CA DEPARTMENT BY : SHRI SRI PRAKASH DUBEY, SR.DR DATE OF HEARING 04/08/2021 DATE OF PRONOUNCEMENT 04/08/2021 2 2. LD. AR HAS ARGUED THE PRESENT APPEAL PRIMARILY ON FOLLOWING TWO SUBSTANTIVE GROUNDS :- 1. THE LD. CIT(APPEALS) WAS NOT JUSTIFIED IN CONFIRMING THE INCOME DERIVED UNDER THE HEAD INCOME FROM HOUSE PROPERTY RELATED TO GROSS RECEIPTS AS WELL AS IN ALLOWING THE LAWFUL DEDUCTION ALLOWABLE UNDER THIS HEAD. 2. THE LD. CIT(APPEALS) WAS NOT JUSTIFIED IN NOT ALLOWING THE INTEREST CLAIMED U/S 24(B) OF INCOME TAX ACT, 1961. 3. IN RESPECT OF THE INTEREST CLAIMED BY THE ASSESSEE U/S 24(B) OF THE INCOME TAX ACT, 1961 IT WAS THE CONTENTION OF THE LD. AR THAT THE ASSESSEE HAS TAKEN LOAN ON THE THREE PROPERTIES FOR WHICH THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 24(B) ON THE INTEREST PAID. OUR ATTENTION WAS DRAWN TO PAGE 19 OF THE ORDER OF THE LD. CIT(A) WHEREIN HE HAD REPRODUCED THE CERTIFICATE FROM THE BANK FILLED BY THE ASSESSEE, MENTIONING THEREIN THAT HOUSE LOAN WAS TAKEN ON THE PROPERTY. LETTER PROVIDES AS UNDER :- 3 4 4. FURTHER OUR ATTENTION WAS DRAWN TO PARA 4 OF THE ASSESSMENT ORDER, WHEREIN AO HAD TABULATED THE INTEREST PAID BY THE ASSESSEE DURING THE YEAR ON THE THREE PROPERTIES NAMELY SG-106, AND SG-65, , IT MENTIONED AS UNDER :- S.NO. ACCOUNT NO. 6737 (SURJIT SINGH & VIMAL KAUR) LOAN RS. 1.46 CRORES - SG106 ACCOUNT NO. 6877 (SURJIT SINGH & VIMAL KAUR)LOAN RS. 50 LACS - SG-65 ACCOUNT NO. 6658 (SURJIT SINGH & VIMAL KAUR) LOAN RS. 39 LACS - SG-64 1 1,80,774 55,772 37,141 2 1,85,313 56,646 35,829 3 1,78,406 54,173 33,535 4 1,82,941 55,127 33,276 5 1,81,706 54,337 31,952 6 1,74,528 51,504 28 ,811 7 1,77,495 51,959 28,270 8 1,68,227 49,868 27,604 9 1,69,673 48,302 28,705 10 1,53,380 43,426 (INSURANCE)8,988 11 **1,29,988 31,979 24,024 12 1,14,051 21,887 13 15,415 14 **17854 15 15,415 TOTAL 18,66,494 5,53,093 3,61,864 5. IT WAS SUBMITTED, THAT THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS WAS NOT ABLE TO PRODUCE THE EVIDENCE , TO PROVE LOAN AGAINST HOUSE PROPERTY, EITHER IN THE FORM OF LOAN DOCUMENT OR IN THE FORM OF INTEREST CERTIFICATE FROM THE BANK , TO CLAIM THE DEDUCTION OF THE 5 INTEREST CLAIMED U/S 24(B) AS IT WAS RELATABLE TO THE LOAN AMOUNT TAKEN TO BUY THESE PROPERTIES. LD. AR HAS SUBMITTED THAT ONE BANK CERTIFICATE WAS PRODUCED BEFORE THE LD. CIT(A) DURING THE APPELLATE PROCEEDINGS, WHICH WAS REPRODUCED BY US ABOVE, ON WHICH REMAND REPORT WAS SOUGHT BY THE CIT(A). 6. ASSESSEE HAS SUBMITTED THAT IN THE PREVIOUS AND SUBSEQUENT ASSESSMENT YEARS THE ASSESSEE WAS ALLOWED DEDUCTION U/S 24(B) IN RESPECT OF ALL THESE PROPERTIES AND NO ISSUE WAS RAISED BY THE AO IN RESPECT THEREOF. 7. IT WAS SUBMITTED BY THE LD. AR THAT THE ASSESSEE HAD FILED THE SALE DEED IN RESPECT OF SHOP NO. SG-65 WHICH WAS PURCHASED BY THE ASSESSEE ALONG WITH HIS WIFE VIDE REGISTERED SALE DEED DATED 25 TH JUNE 2004. IN THE REGISTERED SALE DEED IT IS MENTIONED THAT THE ASSESSEE HAD PURCHASED THE PROPERTY NO. SG-65 FOR A TOTAL CONSIDERATION OF RS. 71,27,707/-. FURTHER THE SCHEDULE-II OF THE SAID SALE DEED PROVIDE THE DETAILS OF THE PAYMENT MADE BY THE ASSESSEE AND HIS WIFE TO THE VENDOR :- 6 RECEIPT NO. DATE AMOUNT(RS.) 30176 21.03.2000 3427000.00 72066 27.05.2002 2008089.67 83845 17.02.2003 1692617.49 _____________ 7127707.16 -------------------- 8. SIMILARLY THE ASSESSEE HAD ALSO PURCHASED SHOP NO. SG.064 ON 24 TH JUNE, 2004 WHERE THE SALE DEED WAS EXECUTED ON 24 TH JUNE, 2004 FOR A TOTAL CONSIDERATION OF RS. 28,95,065/- THE SCHEDULE II OF THE SAID SALE DEED AT PAGE 49 PROVIDE THE DETAILS OF THE PAYMENT PAID BY THE ASSESSEE AND HIS WIFE AS UNDER :- RECEIPT NO. DATE AMOUNT (RS.) 30169 21.03.2000 100000.00 30176 21.03.2000 1502099.68 72067 27.05.2002 511725.23 83839 17.02.2003 781240.33 ______________ TOTAL 2896065.24 _______________ 9. THE ASSESSEE HAS CLAIMED IN RESPECT OF THE PROPERTY BEARING NO. SG 106 THAT THE PROPERTY WAS PURCHASED AFTER TAKING THE LOAN FROM STATE BANK OF TRAVANCORE AND FOR THAT THE CONFIRMATION OF VENDOR DLF COMMERCIAL DEVELOPERS LIMITED IS ENCLOSED. 7 10. IT WAS SUBMITTED THAT THE ASSESSEE INITIALLY HAD TAKEN THE LOAN FROM THE CITI BANK WHICH WAS LATER ON TRANSFERRED TO STATE BANK OF TRAVANCORE AND THEREAFTER IT WAS TRANSFERRED TO ADITYA BIRLA FINANCE LTD.. IT WAS FURTHER SUBMITTED THAT THE FINANCIAL INSTITUTIONS HAVE DIRECTLY PAID TO THE VENDORS, LD. CIT(A) HAS REPRODUCED THE CONTENTION OF THE ASSESSEE AS UNDER :- FURTHER THE FACTS ARE ON THE RECORD THAT INITIALLY THE LOAN WAS RAISED FROM CITI BANK FROM WHERE IT WAS TRANSFERRED TO STATE BANK OF TRAVANCORE AND REMAINED WITH THE SAID BANK IN THE RELEVANT ASSTT. YEAR, HOWEVER, IN THE SUBSEQUENT YEAR IT WAS TRANSFERRED TO ADITYA BIRLA FINANCE LTD. THE LEARNED AO MUST HAVE ISSUED THE NOTICE U/S 133(6) TO STATE BANK OF TRAVANCORE WHERE THE LIABILITY WAS TRANSFERRED FROM CITI BANK. APROPOS TO STATED ABOVE THAT INITIAL LOAN WAS RAISED FROM CITI BANK WHO MADE THE PAYMENT DIRECT TO THE VENDOR. THE CERTIFICATION OF CITI BANK WHO HAVE CONFIRMED IT AS A HOME LOAN IS ENCLOSED. 11. IT WAS SUBMITTED THAT AS THE ASSESSEE HAD TAKEN LOAN FROM THE FINANCIAL INSTITUTIONS AND PAYING THE INTEREST TO THEM THEREFORE THE ASSESSEE WAS ENTITLED TO CLAIM U/S 24(B) OF THE ACT. 12. IT WAS ALSO SUBMITTED BY THE LD. AR THAT THE AO HAD NOT MADE INQUIRIES FROM THE CORRECT PERSON OF THE BANK U/S 133(6) OF THE ACT. IT WAS FURTHER SUBMITTED THAT THE AO HAD NOT DISCLOSED FROM WHOM THE INQUIRIES WERE MADE I.E WHETHER IT WAS MADE FROM ADITYA BIRLA FINANCE 8 LTD. OR CITI BANK OR STATE BANK OF TRAVANCORE. IT WAS LASTLY SUBMITTED IN THE PREVIOUS YEAR AND IN THE SUBSEQUENT YEAR THE ASSESSEE WAS GIVEN THE BENEFIT OF SECTION 24(B) BY THE AO. 13. ON THE OTHER HAND THE LD. DR FOR THE REVENUE RELIED UPON THE ORDER PASSED BY THE LOWER AUTHORITIES. IT WAS SUBMITTED BY LD. DR THAT NO CERTIFICATE OF INTEREST WAS PROVIDED BY THE ASSESSEE IN RESPECT OF ALL THE THREE PROPERTIES FROM THE BANK FOR WHICH THE CLAIM WAS MADE U/S 24(B) AND FURTHER NO EVIDENCE WAS PROVIDED TO SUPPORT THAT THE LOAN WAS TAKEN BY THE ASSESSEE FOR THE PURPOSES OF PURCHASING THE PROPERTY. 14. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD, INCLUDING THE JUDGMENTS CITED AT BAR DURING THE COURSE OF HEARING BY BOTH THE PARTIES. ADMITTEDLY NO EVIDENCE IN RESPECT TO PAYMENT OF INTEREST BY THE ASSESSEE TO THE FINANCIAL INSTITUTION IN THE FORM OF THE CERTIFICATE OF INTEREST ISSUED BY THE BANKS WAS PRODUCED BEFORE THE LOWER AUTHORITY. HOWEVER NONETHELESS, THE PREVIOUS AND SUBSEQUENT ASSESSMENT YEARS THE ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 24(B) HAVE NOT BEEN DENIED BY THE ASSESSING OFFICER. IN OUR CONSIDERED OPINION FOR THE PURPOSES OF CLAIMING THE BENEFIT U/S 24(B) IT IS ESSENTIAL FOR THE ASSESSEE TO PRODUCE 9 EITHER THE INTEREST CERTIFICATE OR THE PROOF OF PAYING THE INTEREST ON LOAN AMOUNTS TAKEN ON ALL THE THREE PROPERTIES. 15. IN THE PRESENT CASE NEITHER THE ASSESSEE HAS PRODUCED THE EVIDENCE OF TAKING THE HOUSING LOAN NOR THE ASSESSEE HAS FURNISHED ANY CERTIFICATE FROM THE BANK FROM WHOM ASSESSEE HAS TAKEN LOAN. IN THE PRESENT CASE, SINCE THE AO HAD BEEN GRANTING THE BENEFIT IN THE PREVIOUS YEAR BUT HAD DENIED THE SAME IN THE IMPUGNED ASSESSMENT YEAR AND CONSIDERING THE PECULIARITY OF THE FACT WE DEEM IT APPROPRIATE TO REMAND BANK THE MATTER TO THE FILE OF THE AO WITH THE FOLLOWING DIRECTIONS :- I. THE AO IS DIRECTED TO ISSUE NOTICE U/S 133(6) TO THE OFFICIALS FROM ALL OR ONE OF THEM NAMELY CITI BANK, ADITYA BIRLA FINANCE LTD. AND STATE BANK OF TRAVANCORE THE ACTUAL DEED OF SANCTION ALONG WITH OTHER DOCUMENTS OF HOUSE LOANS IN RESPECT TO ALL THE THREE PROPERTIES. AO IS DIRECTED TO BRING ON RECORD, NAME/S, AMOUNT, PERIOD, TERMS AND PURPOSES THE LOAN WAS SANCTIONED II. THE AO IS DIRECTED TO ISSUE THE NOTICE U/S 133(6) TO THE OFFICIAL OF THE DLF COMMERCIAL DEVELOPERS LIMITED WITH A VIEW TO FIND OUT WHETHER ANY CONSIDERATION WAS PAID AND HOW MUCH AMOUNT WAS PAID BY THE WIFE OF THE ASSESSEE AND ASSESSEE IN RESPECT TO ALL THREE PROPERTIES. III. THE AO IS ALSO DIRECTED TO FIND OUT WHETHER ANY CONSIDERATION WAS DIRECTLY PAID BY THE FINANCIAL INSTITUTION AS 10 CLAIMED BY THE ASSESSEE IN THE WRITTEN SUBMISSIONS TO THE VENDORS NAMELY DLF COMMERCIAL DEVELOPERS LIMITED . IV. AFTER RECEIVING THE ABOVE SAID INFORMATION IF THE AO COMES TO THE CONCLUSION THAT THE HOUSING LOAN WAS TAKEN FOR THE PURCHASE OF THE PROPERTY, THEN THE PRO RATA INTEREST VIS A VIS THE AMOUNT OF RENT RECEIVED( BY ASSESSEE AND OR WIFE ) AND AMOUNT OF CONSIDERATION PAID SHALL BE ALLOWED BY THE AO. HOWEVER IF THE LOAN TAKEN WAS NOT FOR HOUSING PURPOSES BUT FOR SOME OTHER PURPOSES, THEN THE ASSESSEE WOULD NOT BE ENTITLED TO ANY DEDUCTION U/S 24(B) OF THE ACT. V. AO IS DIRECTED TO DENOVO EXAMINE THE ISSUE AFTER FOLLOWING THE PRINCIPLE OF NATURAL JUSTICE AND ASSESSEE IS ALSO DIRECTED TO FILE ANY OTHER DOCUMENT AS DEEMED APPROPRIATE FOR THE PURPOSE OF CLAIMING DEDUCTION U/S 24(B) AND COOPERATE IN EARLY DISPOSAL OF THE PROCEEDING . 16. APROPOS, THE SECOND ISSUE OF NOT ALLOWING THE BENEFIT OF NON RECEIPT OF THE RENT U/S 24(1)(X).FIRSTLY IT WAS SUBMITTED THAT THE SAID PROVISION WAS SUBSTITUTED BY THE OTHER PROVISION NAMELY 23(1)(C). BASED ON THE SAID SECTION, AR SUBMITTED THAT AO WAS DUTY BOUND TO CONSIDER WHETHER THE PROPERTY OR ANY PART OF THE PROPERTY WAS VACANT DURING THE WHOLE OR ANY PART OF PREVIOUS YEAR AND NON RECEIPT OF RENT FOR THAT PERIOD. HE HAD DRAWN OUT ATTENTION TO SECTION 23(1) (C ), WHICH IS TO THE FOLLOWING EFFECT: 11 23.(1) FOR THE PURPOSES OF SECTION 22, THE ANNUAL VALUE OF ANY PROPERTY SHALL BE DEEMED TO BE (C) WHERE THE PROPERTY OR ANY OTHER PART OF THE PROPERTY IS LET AND WAS VACANT DURING THE WHOLE OR ANY PART OF THE PREVIOUS YEAR AND OWING TO SUCH VACANCY THE ACTUAL RENT RECEIVED OR RECEIVABLE BY THE OWNER IN RESPECT THEREOF IS LESS THAN THE SUM REFERRED TO IN CLAUSE (A), THE AMOUNT SO RECEIVED OR RECEIVABLE: 17. IN RESPECT OF CLAIM U/S 23(1(C) FOR NOT RECEIVING THE RENT ON ACCOUNT OF THE DISPUTE WITH THE TENANT OF THE PROPERTY , LD. AR SUBMITTED THAT THE TENANT WAS FRAUD AND HE HAS NOT PAID THE RENT FOR SUFFICIENT PERIOD TO THE ASSESSEE AND IN FACT LEFT THE PREMISES AFTER PUTTING THE LOCK ON IT . AR HAD SUBMITTED THAT DESPITE FURNISHING THE EVIDENCE BY THE ASSESSEE TO THE AO, THE AO HAS NOT GIVEN THE BENEFIT OF SECTION 23(1)(C). SIMILARLY CIT(A) HAD ALSO DECLINED THE RELIEF TO THE ASSESSEE. 18. LD. AR DURING THE COURSE OF ARGUMENT HAD SUBMITTED THAT POLICE AID WAS TAKEN FOR THE PURPOSE OF BREAKING UP OF THE LOCKS AND TAKING BACK THE POSSESSION. HE HAD SUBMITTED THAT THE MATTER MAY KINDLY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH EXAMINATION. 12 19. LD. DR HAS STRONGLY DISPUTED THE ABOVE SAID CONTENTION AND IT WAS SUBMITTED THAT NO EVIDENCE WAS FURNISHED WITH RESPECT OF NON RECEIPT OF THE RENT DURING THE PERIOD FOR WHICH THE BENEFIT WAS SOUGHT U/S 23(1)(C) OF THE ACT. 20. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD, INCLUDING THE JUDGMENTS CITED AT BAR DURING THE COURSE OF HEARING BY BOTH THE PARTIES. SINCE WE ARE REMANDING BACK THE OTHER GROUNDS TO THE FILE OF THE AO, THEREFORE, WE DEEM IT APPROPRIATE TO REMAND BACK THIS GROUND ALSO TO THE FILE OF THE AO WITH THE DIRECTIONS TO THE ASSESSEE TO PROVIDE THE DETAILS OF THE LITIGATION, IF ANY , WHICH TOOK PLACE BETWEEN THE ASSESSEE AND THE TENANT . ASSESSEE IS DIRECTED TO PRODUCE PROOF OF NON RECEIPT OF RENT IF ANY . ASSESSEE IS ALSO DIRECTED TO PROVIDE THE ELECTRICITY BILL / MAINTENANCE BILL OF THE PROPERTY IN QUESTION TO ESTABLISH THE PROPERTY WAS NOT IN USE BY THE TENANT FOR THIS PERIOD AND WAS VACANT. AO IS DIRECTED TO CONSIDER THESE EVIDENCES AND/ OR ANY OTHER EVIDENCE AS MAY DEEM APPROPRIATE AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER AFFORDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE IN ACCORDANCE WITH THE PRINCIPLE OF NATURAL JUSTICE. 13 IN THE LIGHT OF THE ABOVE THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF I.E. ON 4 TH AUGUST, 2021. SD/- SD/- (R.K. PANDA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 04 /08/2021 VEENA COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI