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Income Tax Appellate Tribunal, DELHI BENCH ‘G’ : NEW DELHI
Before: SHRI N.K. SAINI & SHRI KULDIP SINGH
(PAN : AAFPD2633P) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Ajay Wadhwa, Advocate REVENUE BY : Shri Amit Jain, Senior DR Date of Hearing : 19.04.2018 Date of Order : 23.04.2018
O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : objections filed by the assessee are being disposed of by way of consolidated order to avoid repetition of discussion.
The appellant, Assistant Commissioner of Income-tax, Circle 22 (1), New Delhi (hereinafter referred to as ‘the Revenue’) by filing the present appeal, sought to set aside the impugned order dated 14.05.2012 passed by Ld. CIT (Appeals)-XXV, New Delhi qua the assessment year 2003-04 on the grounds inter alia that :-
“1. On the facts and on the circumstances of the case, the Ld.CIT(A) has erred in deleting the addition of Rs.37,22,880/- made under the head UTI income.
2. On the facts and on the circumstances of the case, the Ld.CIT(A) has erred in deleting addition of Rs.2,52,000/- made under the head deemed rental income.”
The Objector, Mrs. Sheila Jain (Dhody), by filing the present cross objections challenged the assessment order dated 20.03.2006 passed by the Assessing Officer qua the assessment year 2003-04 on the grounds inter alia that :-
“1. The order of the learned Commissioner of income-tax (A) is bad in law and on facts.
2. That on the facts and in the circumstances of the Ld. Commissioner of Income' Tax, New Delhi has erred in confirming the disallowance of inland travelling expenses of Rs.62,498/- made by Id. Assessing officer on the ground that these expense are personal in nature
3. That on the facts and in the circumstances of the Ld. Commissioner of Income Tax, New Delhi has erred in confirming the disallowance of foreign travelling expenses of Rs.272,702/ made by Id. Assessing officer on the ground that these expense are personal in nature inspite of the fact that these expenses are for business purpose.
That on the facts and in the circumstances of the Ld. Commissioner of Income Tax, New Delhi has erred in holding the deduction u/s 80HHC of the Income Tax Act, 1961 at Rs.22,85,949/- instead of Rs.25,85,964/-.”
4. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessee claimed to have purchased Unit Trust of India Units (MIP) of Rs.40,00,000/- in 1997 and got it encashed on maturity for Rs.77,22,880/- on 05.07.2002 which was credited into her account. AO made addition of Rs.37,22,880/- by treating the same as interest income over investment of Rs.40,00,000/-. AO further made addition of Rs.2,52,000/- under the head ‘Income from house property’ under section 23 (4)(b) of the Income-tax Act, 1961 (for short ‘the Act’) for the reason that the assessee is having two houses.
Assessee carried the matter by way of an appeal before the ld. CIT (A) who has deleted both the aforesaid additions made by the AO by partly by allowing the appeal. Feeling aggrieved, the of filing the present appeal and cross objections.
We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
REVENUE’S APPEAL - GROUND NO.1
Undisputedly, the assessee has made investment of Rs.40,00,000/- in 1997 in UTI Units (MIP) which got encashed on maturity for Rs.77,22,880/- on 05.07.2002. It is also not in dispute that the accounts of the assessee are also audited by a statutory auditor u/s 44AB of the Act. AO made addition of Rs.37,22,880/- for the reason that since the assessee has opted for cumulative growth option and she has received the interest of Rs.37,22,880/- which she has not disclosed in her return.
However, when we examine pages 1 to 3 of the paper book which is return for AY 2003-04 with computation of taxable income, it shows that the assessee has offered dividend income of Rs.2,55,369/- to tax in the relevant assessment year on which TDS page 36 of the paper book it shows that in FYs 1999-00, 2000-01 and 2001-02 no TDS was deducted as it was not required UNDER LAW for those years. This fact shows that the assessee has been maintaining her books of account on mercantile basis and has regularly declared dividend income/proceeds in the return of income on accrual basis in the respective years. In these circumstances, the income arisen from maturity of UTI Units (MIP) cannot be treated as interest income.
Ld. CIT (A) has examined all these facts and has specifically annexed computation of taxable income for AY 2003-04 as Annexure ‘A’ with the impugned order and copy of letter issued by UTI Technology Services Ltd. as Annexure ‘B’ regarding non- receipt of income growth statement for the period 01.04.1999 to 31.03.2002 certifying that the income declared under cumulative option and further reinvested in the captioned folio number. So when it is not in dispute that the investment made by assessee in UTI was under dividend reinvestment scheme and the assessee has already declared her income in the respective years, dividend income cannot be treated as interest income. So, we are of the considered view that the ld. CIT (A) by examining all these facts AO. So, ground no.1 is determined against the Revenue.
GROUND NO.2
So far as question of addition of Rs.2,52,000/- made by the AO and deleted by the ld. CIT (A) is concerned, it is the categoric case of the assessee that her property situated at Hauz Khas is being used for business purpose and property situated at Goa is under construction. All these facts are substantiated from the balance sheet relied upon by the assessee. When books of account and audited balance sheet relied upon by the assessee have not been disputed by the AO the Goa property under construction cannot be subjected to deeming provisions contained u/s 23(4)(b) particularly when property of Hauz Khas is used for business purposes. So, we find no illegality or perversity in the findings returned by the ld. CIT (A) and ground no.2 is determined against the Revenue.
ASSESSEE’S CO NO.148/DEL/2013
Ld. AR for the assessee while pressing the cross objection for disallowance of inland travelling expenses of Rs.62,498/-, section 80HHC, contended that the assessee has not much to say about these additions. We are of the considered view that since the ld. CIT (A) has dealt with all these issues raised in the cross objections meticulously on the basis of facts and circumstances of the case, cross objections filed by the assessee are hereby dismissed.
Resultantly, both the appeal filed by the Revenue and the cross objections filed by the assessee are dismissed. Order pronounced in open court on this 23RD day of April, 2018.