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Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI
Before: SHRI ABY T VARKEY & SHRI OM PRAKASH KANT
This appeal has been preferred by the assessee against order dated 22.09.2022 passed by the Ld. National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2013- 14, raising following grounds:
1.0 On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the addition of deemed rent u/s.23(4)
Sarita Sunil Mantri 2 ITA No. 2969/M/2022 of Rs.4,83,140/ of Rs.4,83,140/- on estimating the fair rent on flat no. 1606 and on estimating the fair rent on flat no. 1606 and 305 @ 7% of cost of property; 305 @ 7% of cost of property; 1.1 The Ld. CIT(A) ought to have considered the fact that the The Ld. CIT(A) ought to have considered the fact that the The Ld. CIT(A) ought to have considered the fact that the provisions of provisions of Sec.23(4) shall not apply, since the flats, being Sec.23(4) shall not apply, since the flats, being adjacent and interlinked to each other, comprises of a residential adjacent and interlinked to each other, comprises of a residential adjacent and interlinked to each other, comprises of a residential house; 1.2 The Ld. CIT(A) ought to have held the flat no.305 bearing The Ld. CIT(A) ought to have held the flat no.305 bearing The Ld. CIT(A) ought to have held the flat no.305 bearing cost of Rs.64,70,100/ cost of Rs.64,70,100/- as Self occupied property, as against flat as Self occupied property, as against flat no. 1606 bearing cost of Rs.38,82,900/ 1606 bearing cost of Rs.38,82,900/- held as SOP in the held as SOP in the assessment order; assessment order; 1.3 Without prejudice, the set Without prejudice, the set-off of the brought forward loss off of the brought forward loss from hous property ought to have been allowed for set from hous property ought to have been allowed for set from hous property ought to have been allowed for set-off us.71B with the renta income of impugned year with the renta income of impugned year 2.0 On facts and On facts and circumstances of the case and in law, Ld. circumstances of the case and in law, Ld. CIT(A) erred in not allowing the interest u/s.24(b) on housing CIT(A) erred in not allowing the interest u/s.24(b) on housing CIT(A) erred in not allowing the interest u/s.24(b) on housing loan paid of Rs.4,24,285/ loan paid of Rs.4,24,285/-; 3.0 On facts and circumstances of the case and in law, Ld. On facts and circumstances of the case and in law, Ld. On facts and circumstances of the case and in law, Ld. AO, merely following AIR information, erred in making the AO, merely following AIR information, erred in making the AO, merely following AIR information, erred in making the addition of Undisclosed interest income of Rs.2.380/ ion of Undisclosed interest income of Rs.2.380/ ion of Undisclosed interest income of Rs.2.380/-; 4.0 On facts and circumstances of the case and in law, Ld. On facts and circumstances of the case and in law, Ld. On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the disallowance of expenses debited CIT(A) erred in confirming the disallowance of expenses debited CIT(A) erred in confirming the disallowance of expenses debited to profit and loss account of Rs.2,21,974/ to profit and loss account of Rs.2,21,974/-;
Before us, the Ld. Counsel of the a Before us, the Ld. Counsel of the assessee subm ssessee submitted that except ground No. 1.3 except ground No. 1.3 of the appeal raised, other grounds grounds were not Sarita Sunil Mantri 3 ITA No. 2969/M/2022 pressed and therefore, ground No. 1 to 1.2 and ground No. 2 to 4 of pressed and therefore, ground No. 1 to 1.2 and ground No. 2 to 4 of pressed and therefore, ground No. 1 to 1.2 and ground No. 2 to 4 of the appeal are accordingly dismissed as infructuous. the appeal are accordingly dismissed as infructuous. the appeal are accordingly dismissed as infructuous.
The Ld. Counsel of the assessee also The Ld. Counsel of the assessee also referred to additional referred to additional ground filed by the assessee which reads as under: ground filed by the assessee which reads as under:
1.0 On facts and circumstances of the case and in law, a On facts and circumstances of the case and in law, a On facts and circumstances of the case and in law, a prayer is made to direct the Ld. AO to allow the Set prayer is made to direct the Ld. AO to allow the Set prayer is made to direct the Ld. AO to allow the Set-off of the eligible brought forward Long Term Capital Loss u/s.74(1) of eligible brought forward Long Term Capital Loss u/s.74(1) of eligible brought forward Long Term Capital Loss u/s.74(1) of Rs.36,37,562/ Rs.36,37,562/- and eligible brought forward loss from House and eligible brought forward loss from House Property u/s.71B of Rs.3,38,198/ Property u/s.71B of Rs.3,38,198/-.
The additional ground raised by the assessee being related to The additional ground raised by the assessee being related to The additional ground raised by the assessee being related to only matter of verification and no investigation of fresh facts is only matter of verification and no investigation of fresh facts is only matter of verification and no investigation of fresh facts is required, therefore, same is therefore, same is admitted in view of settled law in the admitted in view of settled law in the NTPC Ltd. 229 ITR 283 (SC). case of NTPC Ltd. 229 ITR 283 (SC)
Since, the ground NO. 1.3 and additional ground raised both Since, the ground NO. 1.3 and additional ground raised both Since, the ground NO. 1.3 and additional ground raised both are connected, same are adjudicated in combined manner. same are adjudicated in combined manner. same are adjudicated in combined manner.
We have heard rival submission of the parties on the issu We have heard rival submission of the parties on the issu We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. The dispute and perused the relevant material on record. The dispute and perused the relevant material on record. The contention of the assessee that brought forward losses under the contention of the assessee that brought forward losses under the contention of the assessee that brought forward losses under the head ‘income from house property’ as well as under the head head ‘income from house property’ as well as under the head head ‘income from house property’ as well as under the head ‘capital gain’ should be set off against current years income under ‘capital gain’ should be set off against current years income under ‘capital gain’ should be set off against current years income under the head ‘income from house property’ and income under the head he head ‘income from house property’ and income under the head he head ‘income from house property’ and income under the head ‘capital gain’ respectively. The details of said brought forward losses ‘capital gain’ respectively. The details of said brought forward losses ‘capital gain’ respectively. The details of said brought forward losses filed by the assessee, is reproduced as under: filed by the assessee, is reproduced as under:
Sarita Sunil Mantri 4 ITA No. 2969/M/2022
Particulars Particulars Assessment Order CIT(A) Income from House property Income from House property 3,38,198 3,38,198 Income from Business from Business 6,92,506 NIL Income from Long term capital Income from Long term capital 84,40,500 36,37,562 gain Income from other sources Income from other sources 34,36,37,298 NIL Assessed Total Income Assessed Total Income 35,36,37,298 39,75,760 Brought Forward Loss to be allowed Brought Forward Loss to be allowed Set off of B/f loss on Set off of B/f loss on House property u/s 71B [available 3,38,198 3,38,198 loss :-₹11,94,250/-] Set off of B/f loss on long term capital asset u/s 74 Set off of B/f loss on long term capital asset u/s 74 36,37,562 36,37,562 [Available loss :-₹50,86,006/ 50,86,006/-] 39,37,562 39,37,562 6.1 The Ld. Counsel of the assessee referred to the return of The Ld. Counsel of the assessee referred to the return of The Ld. Counsel of the assessee referred to the return of income filed for assessment year 2012 income filed for assessment year 2012-13 and 2013 13 and 2013-14 and submitted that assessee submitted that assessee had duly claimed carry forward of the loss duly claimed carry forward of the loss of ₹11,94,250/- under the head ‘income from house property’ and under the head ‘income from house property’ and under the head ‘income from house property’ and capital loss of ₹50,86,006/- and same might be allowed to long term capital loss of and same might be allowed to set off against respective income in current year. spective income in current year. We find that for We find that for set off carry forward losses of income from house property, section set off carry forward losses of income from house property set off carry forward losses of income from house property 71B has prescribed as under : prescribed as under :
“71B. Where for any assessment y 71B. Where for any assessment year the net result of ear the net result of computation under the head Income from house property" is a computation under the head Income from house property" is a computation under the head Income from house property" is a loss to the assessee and such loss cannot be or is not wholly set loss to the assessee and such loss cannot be or is not wholly set loss to the assessee and such loss cannot be or is not wholly set off against income from any other head of income in accordance off against income from any other head of income in accordance off against income from any other head of income in accordance with the provisions of section 71, so much of with the provisions of section 71, so much of the loss as has not the loss as has not been so set-off or where he has no income under any other head, off or where he has no income under any other head, off or where he has no income under any other head, the whole loss the whole loss shall, subject to the other provisions of this shall, subject to the other provisions of this Chapter, be carried forward to the Following assessment year Chapter, be carried forward to the Following assessment year Chapter, be carried forward to the Following assessment year and-
Sarita Sunil Mantri 5 ITA No. 2969/M/2022 (i) be set off against the income from hous (i) be set off against the income from house property assessable e property assessable for that assessment year; and for that assessment year; and (ii) the loss, if any, which has not been set off wholly, the amount (ii) the loss, if any, which has not been set off wholly, the amount (ii) the loss, if any, which has not been set off wholly, the amount of loss not so set off, of loss not so set off, shall be carried forward to the following assessment year, not shall be carried forward to the following assessment year, not shall be carried forward to the following assessment year, not being more than eight assessment years immediate being more than eight assessment years immediate being more than eight assessment years immediately succeeding the assessment year for which the loss was first computed.] the assessment year for which the loss was first computed.] the assessment year for which the loss was first computed.]”
6.2 Similarly, for set off brought forward losses under the head Similarly, for set off brought forward losses under the head Similarly, for set off brought forward losses under the head ‘capital gains’ the section 74 ‘capital gains’ the section 74 has prescribed as under: prescribed as under:
“74. (1) Where in respect of any assessment year, the net (1) Where in respect of any assessment year, the net result (1) Where in respect of any assessment year, the net of the computation under the head "Capital gains* is a loss to the of the computation under the head "Capital gains* is a loss to the of the computation under the head "Capital gains* is a loss to the assessee, the whole loss shall, subject to the other provisions of assessee, the whole loss shall, subject to the other provisions of assessee, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment this Chapter, be carried forward to the following assessment this Chapter, be carried forward to the following assessment year, and- (a) in so far as such loss relates to a sho (a) in so far as such loss relates to a short-term capital asset, it term capital asset, it shall be set off against income, if any, under the head "Capital shall be set off against income, if any, under the head "Capital shall be set off against income, if any, under the head "Capital gains" assessable for that assessment year in respect of any gains" assessable for that assessment year in respect of any gains" assessable for that assessment year in respect of any other capital asset; other capital asset; (b) in so far as such loss relates to a long (b) in so far as such loss relates to a long-term capital asset, it term capital asset, it shall be set of shall be set off against income, if any, under the head "Capital f against income, if any, under the head "Capital gains* assessable for that assessment year in respect of any gains* assessable for that assessment year in respect of any gains* assessable for that assessment year in respect of any other capital asset not being a short other capital asset not being a short-term capital asset; term capital asset; (c) if the loss cannot be wholly so set off, the amount of loss not (c) if the loss cannot be wholly so set off, the amount of loss not (c) if the loss cannot be wholly so set off, the amount of loss not so set off shall be so set off shall be carried forward to the following assessment carried forward to the following assessment year and so on.] year and so on.]
Sarita Sunil Mantri 6 ITA No. 2969/M/2022 (2) No loss shall be carried forward under this section for more (2) No loss shall be carried forward under this section for more (2) No loss shall be carried forward under this section for more than eight assessment years immediately succeeding the than eight assessment years immediately succeeding the than eight assessment years immediately succeeding the assessment year for which the loss was first computed. assessment year for which the loss was first computed. assessment year for which the loss was first computed.
(3) "[Omitted by th (3) "[Omitted by the Finance Act, 2002, w.e.f. 1.4-2003.] 2003.]”
6.3 The assessee is seeking The assessee is seeking set off of losses under the head ‘house losses under the head ‘house property’ against income of ₹3,38,198/- and losses property’ against income of and losses under the head capital gain against capital gain of ₹36,37,562/- capital gain against capital gain of for assessment year under consideration eration. Since set off require verification of the Since set off require verification of the origin in which year these losses arose to the assessee which year these losses arose to the assessee as set off is which year these losses arose to the assessee available upto certain period of year available upto certain period of year therefore, we feel it therefore, we feel it appropriate to restore this matter to the file of the Ld. Assessing appropriate to restore this matter to the file of the Ld. Assessing appropriate to restore this matter to the file of the Ld. Assessing Officer for verification and allow the set off in accordance with law. r for verification and allow the set off in accordance with law. r for verification and allow the set off in accordance with law. The ground No. 1.3 and the additional ground raised by the The ground No. 1.3 and the additional ground raised by the The ground No. 1.3 and the additional ground raised by the assessee are accordingly allowed for statistical purposes. assessee are accordingly allowed for statistical purposes. assessee are accordingly allowed for statistical purposes.
In the result, the appeal of the assessee is partly allowed for In the result, the appeal of the assessee is partly allowed for In the result, the appeal of the assessee is partly allowed for statistical purposes.