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Facts
The assessee appealed against the CIT(A)'s order which confirmed an addition of Rs. 43,34,510/- for expenditure incurred to earn interest income, disallowing a deduction under Section 57(iii). The CIT(A) held that interest paid on loans for non-residential property against interest received from another entity was not wholly and exclusively expended for earning income taxable under 'Other Sources'. The assessee sought to introduce an Agreement with Indirapuram Habitat Centre (IHC) as additional evidence.
Held
Referring to a similar case involving the assessee's brother where the matter was remanded, and with no objection from the Revenue, the Tribunal admitted the additional evidence. The case was remanded to the Assessing Officer (AO) to decide the issue afresh after considering the additional evidence and providing the assessee an opportunity of being heard.
Key Issues
Deductibility of expenditure for earning interest income under Section 57; Admissibility and consideration of additional evidence during the assessment process.
Sections Cited
57, 57(iii), 143(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI
Before: Sh. Kul BharatDr. B. R. R. Kumar
ORDER Per Dr. B. R. R. Kumar, Accountant Member:
This appeal has been filed by the assessee against the order of ld. CIT(A)-33, New Delhi dated 14.09.2020.
Following grounds have been raised by the assessee:
“1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in confirming addition of Rs.43,34,510/- on account of expenditure for earning interest income.
2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in retuning findings as to assessee failure to support his claim u/s 57 of the Act, the said findings being contrary to the material on record.”
Heard the arguments of both the parties and perused the material available on record.
Surinder Kumar Daima 4. At the outset, we find that this issue is stands covered by the order of the Co-ordinate Bench of ITAT in the case of Sushil Kumar Daima, brother of the assessee in order dated 16.01.2024. The said order of the ITAT is as under:
“3. In this case, assessee’s claim for deduction of interest paid on the loan was not allowed. The concluding portion of the order of ld. CIT (A) is as under:-
“In view of the above, appellant’s claim for deduction of interest paid to ICICI Bank on the loans taken for the non-residential property purposes against interest received from another entity IHCPL on a different transaction altogether is not tenable on facts and in law since it was not expended wholly and exclusively for the earning of such interest income taxable under the head Other Sources of Income. Within the scope of processing of returns u/s. 143 (1), DCIT, CPC had duly extended an opportunity of filing its response and after having considered the merits thereof, the claim of deduction of interest paid u/s. 57(iii) has been rightly rejected on facts and in law. Therefore, Ground No.1 raised by the appellant does not succeed.”
Against this order, assessee filed appeal before us. The assessee has also sought admission of additional evidence under Rule 29 of the Appellate Tribunal Rules, 1963. The said additional evidence is an Agreement of the assessee with the Indirapuram Habitat Centre (IHC). Ld. Counsel of the assessee prayed that this is an important document and the admission of this evidence will facilitate the Surinder Kumar Daima dispute resolution. Ld. DR for the Revenue did not have any objection to this proposition. Accordingly, in the interest of justice, we admit the additional evidences.
5. The matter is now remitted to the file of AO. AO shall decide the issue afresh after considering the additional evidence being submitted and after giving an opportunity of being heard to the assessee.
6. In the result, the appeal of the assessee is allowed for statistical purposes.”
In the absence of any material change in the facts of this case, we hereby remand the matter to the file of the AO to decide the issue afresh after considering the additional evidence being submitted and after giving an opportunity of being heard to the assessee.
In the result, the appeal of the assessee is allowed for statistical purpose. Order Pronounced in the Open Court on 29/02/2024.