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Income Tax Appellate Tribunal, DELHI BENCH “E”: NEW DELHI
Before: SHRI H.S.SIDHU & SHRI PRASHANT MAHARISHI
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INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E”: NEW DELHI BEFORE SHRI H.S.SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA No.1983/Del/2014 (Assessment Year:2005-06) Milestone Realtors Pvt. Ltd., ITO, 8-B, Rajendra Park, Pusa Road, Ward-6(4), New Delhi Vs. New Delhi PAN:AADCM8707G (Appellant) (Respondent)
Assessee by : Sh.Ved Jain, Adv Revenue by: Sh. P Dam Kanunjna, Sr. DR Date of Hearing 20/06/2016 Date of pronouncement 22/06/2016
O R D E R PER PRASHANT MAHARISHI, A. M. 1. This appeal is filed by the assessee against the order of the ld CIT(A)-IX, New Delhi dated 25.02.2014 rejecting the appeal of the assessee against rectification order dated 25.03.2010 for AY 2005-06 passed u/s 154 of the Income Tax Act by the Assessing Officer, Ward 6(4) New Delhi. 2. The brief facts of the case is that the appellant company engaged in the business of real estate filed its return of income on 28.10.2005 declaring income of Rs. 541011/-. Subsequently, notice u/s 148 of the Act was issued on 27.02.2007 as assessee is showing his rental income and no business activity was undertaken by the assessee, hence, in absence of any business activity the business loss claimed by the assessee cannot be allowed. Further, the assessee is claiming deduction on account of brokerage and stamp duty from the house property income which is not allowable as per law. Based on this assessment u/s 143(3) read with Section 147 was passed on 31.10.2007 determining total income of the assessee at Rs. 1727150/- against the original return filed of Rs. 541011/-. Milestone Realtors Private Limited V ITO ward 6 (4) New Delhi ITA No 1983/DEL/2014 A Y 2005-06
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Assessee moved an application u/s 154 of the Act. Leaving aside the other issues involved in application u/s 154 of the Act the main grievance of the assessee is that the interest deduction of Rs. 392295/- which was claimed in the original return was not granted as deduction by ld AO in order u/s 147 read with section 143(3) passed on 31.10.2007 and no reasons for disallowance were also given. And that was also not the reason for reopening the case. However ld AO rejected application vide order dated 25.03.2010 u/s 154 stating that no evidence has been filed towards the payment of interest. 4. Assessee preferred appeal before CIT (A) against the above order. On appeal before the ld CIT(A) vide ground No. 3 the additional evidence filed by the assessee were rejected and the appeal of the assessee on that ground was dismissed. In nut shell claim of the assessee of deduction of interest of Rs. 392295/- was not entertained. Therefore, the assessee is in appeal before us. 5. Ld AR submitted the factual note stating that wherein the order of ld Assessing Officer passed u/s 147 of the Act there was no reason given for disallowance of interest expenditure and computation of income from house property was started from Rs. 1553550/- which is gross rent receipt and not income from house property shown by the assessee at Rs. 546107/-. He submitted the computation of the total income along with the acknowledgement of the return. 6. Ld DR relied on the orders of the lower authorities. 7. We have carefully considered the rival contentions. We have perused the assessment order passed u/s 147 read with Section 143(3) of the Income Tax Act and also the reasons for reopening mentioned in that order. While computing the total income ld Assessing Officer has stated that income from house property as per IT return filed by the assessee is Rs. 1553550/- and has made an addition thereto of Rs. 140000/- and Rs. 33600/- being brokerage and stamp duty expenses. Subsequently, while entertaining 154 application of the assessee deduction of house tax and standard deduction was also granted. However, the claim of the interest was disallowed. Only reason given was that no evidence has been filed. Before the ld CIT(A) the assessee has submitted that this expenditure has been paid to Mr. Prabin Kr. Jolly and the copy of the confirmation was also filed. The ld CIT(A) did not allow the additional Milestone Realtors Private Limited V ITO ward 6 (4) New Delhi ITA No 1983/DEL/2014 A Y 2005-06
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submission with respect to the payment of interest and rejected prayer under Rule 46A and confirmed the disallowance of interest. When in the original return of income the assessee has claimed interest of Rs. 392295/- and in the reopened assessment also no queries have been asked on this claim it is apparent that the ld Assessing Officer did not have any questions about the claim made by the assessee and therefore the assessee could not submit the proof of the interest payment. Hence application of the assessee u/r 46A deserves to be accepted. Even otherwise the law does not authorizes the Assessing Officer to disallow any claim of the assessee which was made in the original return of income without examining it. In view of this we do not approve the order of the ld CIT(A) in rejecting the 154 application of the assessee on that count. As the assessee has claimed the interest deduction in the original return of income not allowing the same without discussing in the assessment order amounts to mistake apparent from the record. In view of this we reverse the finding of the ld CIT(A) and direct the ld Assessing Officer to grant deduction of interest from income from house property which is supported by the proper evidence. 8. In the result appeal of the assessee is allowed. Order pronounced in the open court on 22/06/2016. -Sd/- -Sd/- (H.S.SIDHU) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 22/06/2016 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi
Milestone Realtors Private Limited V ITO ward 6 (4) New Delhi ITA No 1983/DEL/2014 A Y 2005-06