Vimal Kaur, New Delhi V. DCIT, Circle- 2(1)(2), International Taxation, New Delhi

ITA 871/DEL/2018

• Counselvise Citation: [NaN] 107 COUNSELVISE.COM (IT) 1877 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 05-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’, NEW DELHI BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SH. NARENDER KUMAR CHOUDHARY, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCING) ITA No. 871/Del/2018 (Assessment Year : 2013-14) Vimal Kaur 23, West Avenue Road, Punjabi Bagh, New Delhi PAN : APLPK 3423 M Vs. DCIT Circle – 2(1)(2) International Taxation New Delhi (APPELLANT) (RESPONDENT) Assessee by Shri G. S. Kohli, C.A. Revenue by Shri Atiq Ahmed, Sr. D.R. Date of hearing: 27.12.2021 Date of Pronouncement: 04.01.2022 ORDER PER ANIL CHATURVEDI, AM: This appeal filed by the assessee is directed against the order dated 29.12.2017 of the Commissioner of Income Tax (Appeals)-43, New Delhi relating to Assessment Year 2013-14. 2. The relevant facts as culled from the material on records are as under : 2 3. Assessee is a non-resident individual who filed her return of income for A.Y. 2013-14 on 27.07.2013 declaring total income at Rs.6,70,450/-. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act vide order dated 31.03.2016 and the total income was determined at Rs.54,01,680/-. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 29.12.2017 in Appeal No.135/2016-17 granted partial relief to the assessee. Aggrieved by the order of CIT(A), assessee is now in appeal and has raised the following grounds: 1. “That the assessment framed is illegal, unlawful and is against the natural law of justice. 2. The learned CIT (Appeal) 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. 3. The learned CIT (Appeal) was not justified in not allowing the interest claimed u/s 24(b) of Income Tax Act, 1961. It was a regular claim which was allowed in the earlier years as well as in the subsequent year and thus its disallowance in arbitrary manner was not justified. The learned AO has erred in treating the claim of interest on business loan while the appellant neither has conducted any business nor the learned AO has assessed any business income. 4. The learned CIT (Appeal) failed to appreciate the facts and documents placed on the record in respect of rent received and lawful deductions claimed on it. 5. That the appellant craves their right to amend, delete or add 3 any grounds of appeal at or before the time of hearing.” 4. Before us, at the outset, Learned AR submitted that though the assessee has raised various grounds but the issue in the present appeal for adjudication is with respect to the not allowing the interest claimed u/s 24(b) of the Act under the head “Income from house property” and in respect of the non-granting of benefit by AO u/s 23(1)(c) of the Act. 5. During the course of assessment proceedings, AO noticed that assessee had two properties namely SG-64 and SG-65 at DLF Galleria, Gurgaon which was held in joint names by the assessee along with her husband Shri Surjeet Singh. AO noticed that assessee had only shown rent receipt of Rs. 32,00,000/- and according to AO since assessee was claiming total interest u/s 24(b) of the Act against the property, it had also to offer the total rent received from the property. AO, therefore as per the rent agreement, considered the rental income from the SG-65 property at Rs.64,00,000/-. AO also noticed that assessee was claiming interest u/s 24(b) of the Act and had submitted a certificate from the bank with respect to the interest payable. AO on perusing the certificate concluded that the certificate did not reveal that the loan has been taken for the purpose of acquisition or construction of property and accordingly according to him the assessee had failed to substantiate the claim that the loan was taken for the acquisition or construction of the property. He accordingly denied the claim of deduction u/s 24(b) of the Act. 4 6. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who upheld the order of AO. Aggrieved by the order of CIT(A) assessee is now in appeal. 7. Before us, at the outset, Learned AR submitted that it is an undisputed fact that the aforesaid properties were jointly owned by assessee along with her husband Shri Surjeet Singh. He further submitted that identical issue with respect to the balance share of income arose in the case of Shri Surjeet Singh before the Tribunal and the Tribunal in ITA No.870/Del/2018 vide order dated 04.08.2021 had remitted the issue with respect to the claim of deduction u/s 24(b) and the issue of benefit u/s 23(1)(c) of the Act to the AO for fresh examination. He pointed to the relevant observations of the Tribunal in the case of Shri Surjeet Singh and therefore submitted that since the facts of the case are identical to that of Surjeet Singh (supra) the matter be remitted to AO with similar directions. 8. Learned DR on the other hand, on the merits of the case supported the order of lower authorities but however did not object to the prayer of Learned AR to remit the issue back to the file of the AO. 9. We have heard the rival submissions and perused the materials available on record. The issue in the present appeal is with respect to the non-granting of deduction u/s 24(b) of the Act 5 and denial of benefit u/s 23(1)(c) of the Act. It is an undisputed fact that identical issue arose in the case of Surjeet Singh, the husband of the assessee and when the matter was carried before the Co-ordinate Bench of Tribunal, the Tribunal vide order dated 04.08.2021 in ITA No.870/Del/2018 restored the issue back to the file of the AO by observing as under: “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 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 assessee’s 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 either the interest certificate or the proof of paying the interest on loan amounts taken on all the three properties. 6 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 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 7 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: “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. 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 8 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.” 10. Before us, both the parties have admitted that the facts in the case in the year under consideration are identical to that of earlier years. We therefore following the decision of the Co- ordinate Bench in the case of Surjeet Singh (supra) and with similar directions restore the issue back to the file of the AO. AO shall make necessary enquiries and thereafter decide the issue afresh in accordance with law. Needless to state that he shall grant adequate opportunity of hearing to the Assessee. Thus the ground of Assessee is allowed for statistical purposes. 11. In the result, appeal of the Assessee is allowed for statistical purposes. Order pronounced in the open court on 04.01.2022 Sd/- Sd/- (NARENDER KUMAR CHOUDHARY) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 04.01.2022 PY* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI