M/S. UNIVERSAL PRECISION SCREWS,NEW DELHI vs. JCIT, NEW DELHI

This appeal filed by the assessee is directed against the order dated 11th March, 2016 of the CIT(A)-20, New Delhi, relating to assessment year 2011-12.

Grounds of appeal 1 and 4 being general in nature are dismissed.

Ground of appeal No.3 was not pressed by the ld. counsel on account of smallness of the amount. Accordingly, the same is dismissed. Ground of appeal No.2 reads as under:-

Facts of the case, in brief, are that the assessee is a partnership firm engaged in the business of manufacturing of nuts/bolts, screws/shoulder bolts/dowel pins and other special fasteners made of various materials. It filed its return of income on 27th September, 2011 declaring total income of Rs.2,72,74,220/-. During the course of assessment proceedings, the Assessing Officer noted that the assessee has claimed interest on term loan paid by the assessee amounting to Rs.6,23,654/- as deduction u/s 24(b) of the IT Act. He noted that the assessee has not claimed any such deduction for interest payment in its return of income filed for assessment year 2007-08 and 2008-09. However, the assessee claimed the same by means of revised return for assessment year 2009-10 which was disallowed. Even for assessment year 2010-11, the assessee failed to claim the above deduction in the original return of income filed. The Assessing Officer, further held that the assessee could not substantiate its claim by filing necessary supporting documentary evidence. He observed that although the assessee has taken loan from the bank and has used the same for the purpose of business, the assessee has not been able to substantiate its claim that a part of the loan was used for the construction of let out property. He, therefore, disallowed the claim of deduction u/s 24(b) of the Act of Rs.6,23,654/-. In appeal, the ld.CIT(A) upheld the action of the Assessing Officer. While doing so, he noted that the Tribunal in assessee’s own case for assessment year 2009-10 has set aside the issue to the file of Assessing Officer. Further, during the appeal proceedings, the assessee failed to submit any conclusive evidence as to what amount of loan has been deployed for the construction of the let out property.

Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal.

The ld. counsel for the assessee drew the attention of the Bench to the order passed by the Assessing Officer u/s 250/143(3) on 29th January, 2016 for assessment year 2009-10 wherein the Assessing Officer has allowed the claim of interest u/s 24(b) of Rs.14,53,153/-. He submitted that the Tribunal in assessee’s own case for assessment year 2010-11, vide order dated 3rd October, 2018 has also restored the issue to the file of the Assessing Officer following the order of the Tribunal for assessment year 2009-10. He submitted that since the Assessing Officer in the instant case has already allowed the claim, therefore, this being a covered matter in favour of the assessee, the claim of deduction u/s 24(b) should allowed.

The ld. DR, on the other hand, submitted that since the Tribunal, for assessment year 2010-11, has restored the issue to the file of the Assessing Officer, following the order for assessment year 2009-10 which is subsequent to the consequential order passed by the Assessing Officer in the set aside proceedings, this matter also should be restored to the file of the Assessing Officer.

We have heard the rival arguments made by both the sides and perused the record. It is an admitted fact that the claim of deduction u/s 24(b) was denied by the Assessing Officer on the ground that such claim was disallowed in the earlier years. We find, the Tribunal, in assessee’s own case for assessment year 2009-10, had restored the matter to the file of the Assessing Officer for verifying and ascertaining the amount of loan utilized for the building in respect of which rental income assessable under the head ‘Income from house property’ was earned. We find, the Assessing Officer, in the order passed u/s 250/143(3) on 29th January, 2016, has allowed the claim of deduction u/s 24(b) of the Act amounting to Rs.14,53,153/-. We also find the Tribunal in assessee’s own case for assessment year 2010-11 had directed the Assessing Officer to allow the deduction claimed by the assessee after verifying the amount of loan utilized, interest paid thereon and, thereafter, to assess the income from the house property earned by the assessee.

Respectfully following the decision of the Tribunal in assessee’s own case for the immediately preceding assessment year, we direct the Assessing Officer to allow the deduction claimed by the assessee after verifying the amount of loan used, interest paid thereon and, thereafter, assess the income from the house property earned by the assessee, after providing the assessee an opportunity of being heard. The grounds raised