GANESAN KALEESWARAN,,CHENNAI vs. ITO, NCW - 23 (4),, CHENNAI

This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals)-10, Chennai in order dated 22.10.2019. The assessment was framed by the ITO, Non-Corporate Circle 23(4), Chennai for the 2 assessment year 2016-17 u/s.143(3) of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 25.12.2018.

At the outset, it is noticed that this appeal was fixed for hearing on many occasions numbering 14 and almost it went unrepresented and only on one hearing i.e., on 05.04.2022, one Ms. K. Bhuvaneswari, Advocate appeared and asked for adjournment. Now, none is present. Hence, we decided to take this appeal ex-parte qua assessee and decide the appeal on merits.

It is noticed from grounds raised

First, we will deal with the issue of expenses claimed as deduction u/s.10 of the Act.

Brief facts are that the assessee is an employee of AON Services India Pvt. Ltd., and disclosed salary income in the return of income. The assessee’s case was selected for scrutiny to verify the following (i) taxable income shown in revised return is less than the taxable income shown in the original return and large refund has been claimed (ii) Salary income shown in ITR is less than the salary income as per 26AS. The AO required the assessee to explain how the salary income in the revised return of income is less than the original return of income. The assessee explained that he has claimed LTA of Rs.2,56,410/-, food expenses of Rs.36,000/-, medical expenses of Rs.30,000/-, telephone expenses of Rs.60,000/-, conveyance expenses of Rs.19,200/- and other exemptions of Rs.1,85,262/-. The assessee explained that the total deduction claimed on the above items comes to Rs.5,86,872/-. The AO observed that the assessee has not reported the gross salary to the extent of Rs.5,86,872/- and accordingly, the same was added to 4 the returned income of the assessee. Aggrieved assessee preferred appeal before CIT(A).

The CIT(A) noted that the gross salary as per Form No.26AS & Form No.16 is Rs.20,57,709/- whereas as per revised return, he has disclosed salary income at Rs.14,70,837/-. The CIT(A) noted that the assessee is entitled to claim deduction u/s.10 of the Act, on medical expenses of Rs.30,000/- but the other claim of various expenses like LTA of Rs.2,56,410/-, food expenses of Rs.36,000/-, telephone expenses of Rs.60,000/-, conveyance expenses of Rs.19,200/- and other exemptions of Rs.1,85,262/- does not come within the provisions of section 10 of the Act and thereby he disallowed the claim of assessee. The CIT(A) finally held that the AO has rightly recomputed the salary by making addition of Rs.5,86,872/- as under reported by claiming expenses of personal nature. Accordingly he confirmed the addition.

After hearing ld. Senior DR and going through the facts of the case, we noted that the facts are not clearly emerging out of the order of the AO or the CIT(A) whether the assessee is eligible to claim LTA and if any LTA is added to the gross salary of the assessee or not. This issue needs reconsideration and hence, only

The next issue is as regards to the claim of income from house property u/s.24 of the Act. The facts are that the assessee has two house properties i.e., house property No.2/33 Avia Enclave, Balakrishnan Street, Nanmangalam, Chennai – 117 as his own property and another joint property with his sister i.e., 1A, Sadagopan Enclave, Kannappan Street, Nanmangalam, Chennai – 117. The assessee has made claim on total interest paid for financial year 2015-16 relevant to this assessment year 2016-17 amounting to Rs.5,37,586/- as the assessee has disclosed rental income of Rs.30,000/- and claimed the entire interest. The AO allowed interest to the extent of Rs.2,00,000/- out of the interest claimed by assessee of Rs.5,23,579/- and balance was disallowed

The CIT(A) noted that the assessee is entitled for claim of deduction to the extent of maximum deduction of Rs.2,00,000/- for self-occupied house property as the assessee claimed the first property as his house property and the second property jointly owned with sister on which the interest on borrowed capital claimed by assessee is Rs.5,37,586/- for which the assessee has earned rental income of Rs.30,000/-. The CIT(A) after allowing the maximum deduction of Rs.2,00,000/- as allowed by AO, confirmed the addition of Rs.3,23,579/- made by AO. According to CIT(A), the assessee has claimed this loss just to reduce the salary income. Aggrieved assessee came in appeal before the Tribunal.

After hearing ld. Senior DR and going through the facts on record, we noticed that the assessee has claimed house property loss of Rs.5,23,579/- out of which the AO himself has allowed the loss claimed on account of interest paid of Rs.2,00,000/- under the head ‘income from house property’ and balance amount of Rs.3,23,579/- was added. We find no infirmity in the orders of 7 lower authorities and hence, this issue of assessee’s appeal is dismissed.

In the result, the appeal filed by the assessee is partly allowed for statistical purpose.