PADMANABAN SUKHUMARAN ,BANGALORE vs. ACIT, CIRCLE-5(3)(1), BANGALORE

The appellant denies himself to be assessed at Rs.94,27,990/- as against the returned income of Rs.81,71,390/- for the impugned assessment year 2017- 18, on the facts and circumstances of the case.

Grounds on disallowance of claim of interest u/s 24(b), Rs.17,44,496/-: a. The authorities below have failed to take cognizance of the fact that the appellant has inadvertently mentioned the address of J.P Nagar property which is a self-occupied property as deemed let out property, on the facts and circumstances of the case.

It is a settled proposition of law that "consent does not confer Juri iction" on the facts and circumstances of the case.

The appellant denies the liability to pay interest under section 234A, 234B and 234C of the Act in view of the fact that there is no liability to additional tax as determined by the learned assessing officer. Without prejudice the rate, period and on what quantum the interest has been levied are not in accordance with law and further are not discernable from the order and hence deserves to be cancelled on the facts and circumstances of the case.

In view of the above and other grounds that may be urged at the time of the hearing of the appeal, the appellant prays that the appeal may be allowed and appropriate relief be granted in the interest of justice and equity.”

The assessee filed an application to condone the delay of 329 days in filing the appeal before this Tribunal and submitted that because of the earlier consultant’s, decided to change the said AR while filing this appeal before this Tribunal. We have considered the said submissions and we are satisfied that the assessee had valid reasons for not approaching this Tribunal in time and therefore we condone the said delay of 329 days in filing the appeal and proceeded to adjudicate the issue on merits.

Briefly stated the facts of the case are that the assessee filed revised return of income on 21/07/2017 declaring gross total income at Rs. 83,48,789/- and claimed the deduction under Chapter VIA of Rs. 1,77,398/-. The gross total income shown is Rs. 99,53,285/- in the revised return of income. The assessee has claimed TDS of Rs. 27,78,701/- deducted by the employer company M/s. IBM India Pvt. Ltd. The case was selected for limited scrutiny. Subsequently, statutory notices were issued to the assessee. The assessee furnished the reply. It was noticed that the assessee has claimed deduction u/s. 24(b) of the IT Act and the interest from ICICI Bank as per the statement, the assessee has paid an amount of Rs. 5,15,894/- as interest at the property situated at A-2104, Mantri Serenity, Doddakallasandra Village, Uttarahalli Hobli, Bangalore – 560 062 and the said property is not declared in the income tax return filed and claimed an amount of Rs. 17,44,496/- as interest u/s. 24(b) against the property situated at J.P. Nagar, Bangalore. The property situated in J.P. Nagar is being used by the assessee for self residential purpose. The assessing officer noted that the interest on loan on self-occupied property is Page 4 of 7 restricted to Rs. 2 Lakhs but the assessee had not given any proof for paying the interest on the J.P. Nagar property. Therefore the house property loss claimed by the assessee for the J.P. Nagar property was disallowed. The assessing officer calculated loss from house property at Rs. 3,47,894/-.

Aggrieved from the above order, the assessee filed an appeal before the Ld.CIT(A). The Ld.CIT(A) dismissed the appeal of the assessee.

Aggrieved from the above order, the assessee filed an appeal before this Tribunal.

The Ld.AR reiterated the submissions made before the lower authorities and he also filed a paper book containing pages 1 – 79. As submitted that while filing the income tax return, at schedule HP, residential house of the property was wrongly mentioned and there is no any loan outstanding as on today aganist the self residential property . The address mentioned in the property was being used by the assessee for residential purpose. The Ld. Counsel perused the bank loan statement taken from ICICI Bank which is placed at pages 61-79. The bank loan was taken for the purchase / construction for the property situated at A-2104, Mantri Serenity, Doddakallasandra Village, Uttarahalli Hobli, Bangalore – 560 062 and the said loan has been repaid fully on 16/06/2017. The loan agreement was in LBBNG00001893416 dated 22/11/2011. Due to inadvertent mistake in the said return while filing the return of income, the address of the property at J.P. Nagar was mentioned. Kinly consider the interest claim for the nw property mentioned above and it was letout for 10 months.

On the other hand, the Ld.DR relied on the orders of the lower authorities and submitted that during the course of appellate proceedings as well as the proceedings even before the Hon’ble Bench, the assessee is unable to submit the documents for the interest claimed of Rs. 17,44,496/-

Considering the rival submissions and materials available on record and order of the authorities below, we note that here the dispute is regarding non-providing of any documentary evidences towards the claim of interest u/s. 24(b) in spite of the J.P. Nagar property. During the course of proceedings, the assessing officer made observation that if the assessee has claimed deduction u/s. 24(b) of Rs. 17,44,496/- in respect of the J.P. Nagar property which is appearing in schedule of HP details of income from house property of J.P. Nagar. But as per the documents submitted by the assessee before us, the assessee has taken loan for the purchase / construction of the property at A-2104, Mantri Serenity, Doddakallasandra Village, Uttarahalli Hobli, Bangalore – 560 062 vide loan agreement no. LBBNG00001893416 dated 22/11/2011 and date of payment of interest starting date is 31/12/2011. The assessee paid the entire loan on 16/06/2017 and at the date of completion of the construction is on 18/06/2016 the assessing officer has computed the notional rent income on this property and computed for whole the years whereas the construction of Page 6 of 7 the property was completed on 18/06/2016. He also noted that as per the loan document, the address of the borrower is A-2104, Mantri Serenity, Doddakallasandra Village, Uttarahalli Hobli, Bangalore – 560 062. As per the documents produced before us, the assessee is residing in the property at J.P. Nagar , the assessee has not produced any documents for loan interest for the E-1409 Brigade Gardenia J P nagar 7th hase property, assessee has claimed interest u/s. 24(b). This mistake could have been rectified by revising the return during the assessment. There is no any documentary evidence produced in this regard. Further it is not in dispute that the assessee has taken loan from the ICICI Bank of Rs. 1,70,00,000/- on 22/11/2011. As per the documents, the current years interest is Rs. 5,15,894/-. The pre construction period is 31/12/2011 to 31/03/2016 and total pre construction interest is Rs. 62,87,945/-. 1/5th of the pre- construction period interest comes to Rs. 12,57,589/- (12,28,601 page No. 73)as per calculation in paper book pages 73 and 74. We, further noted that as per the paper book page 73. Sr.No. 13, the pre-construction interest for the impugned assessment year is R. 12,48,601/- and as per page 61, the interest component payable from April 2016 to March 2017 is Rs. 5,15,894/-. Resultantly, the total interest is eligible for the property at A- 2104, Mantri Serenity, Doddakallasandra Village, Uttarahalli Hobli, Bangalore – 560 062 is Rs. 17,44,496/- ( current year interest of Rs. 5,15,894+1/5 pre construction period interest of Rs. 12,28,601) which is tallied with interest claimed in the income tax return and the assessee himself has reported rental income of Rs. 2 Lakhs. Accordingly, the claim of the assessee is genuine but the address of the property in the Schedule of the income from house property was wrongly proved. Accordingly, we noted some calculation mistake. Therefore we are of the view that the claim is genuine but the figures are to be arrived correctly. Only for the limited purpose, we are remitting this issue to the file of the AO. We allow the appeal of the assessee subject to the verification by AO for quantum of interest claimed. The assessee is directed to produce the correct figure for interest claimed.

Respondent 3. CIT

DR, ITAT, Bangalore

Guard file

CIT(A)