TALHA ABBAS MUKHI,MUMBAI vs. ITO WD 4(4), THANE

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ITA 7769/MUM/2014Status: DisposedITAT Mumbai02 August 2016AY 2010-113 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal restored the issue of loan addition back to the AO for fresh verification, allowing the assessee an opportunity to substantiate the claim. Similarly, claims for LIP payment under Section 80C and interest deduction under Section 24 were also restored to the AO for verification of additional evidence.

What were the facts?

The assessee appealed against additions made by the AO and confirmed by the CIT(A) regarding loans, disallowance of interest on house property, and rejection of deduction under Section 80C. The AO had added back a loan amount for not substantiating the creditworthiness of the loan creditors.

What were the issues?

Whether the addition of loan amounts was justified without proper verification by the AO, and whether claims for deductions under Section 80C and Section 24 should be considered based on additional evidence.

Which sections of the Income-tax Act were involved?

Section 68,Section 24,Section 80C,Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”, BENCH MUMBAI

Before: SHRI R.C.SHARMA

Hearing: 28/07/2016Pronounced: 02/08/2016

आयकर अपीऱीय अधिकरण, म ुंबई न्यायपीठ ‘एस.एम.सी’, म ुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL “SMC”, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER आमकय अऩीर सं./ (नििाारण वषा / Assessment Year :2010-2011) Talha Abbas Mukhi, A/302, Vs. ITO-4(4), Thane Ascon Acresst Tower I, Nr. Asmita Shopping Centre, Naya Nagar, Mira Road (E), District Thane-401107 स्थामी रेखा सं./ जीआइआय सं./ PAN/GIR No. : AAWPM 6533 G (अऩीराथी /Appellant) (प्रत्मथी / Respondent) .. ननधाारयती की ओर से /Assessee by : Smt. Jigna Shah याजस्व की ओर से /Revenue by : Shri Randhir Gupta सुनवाई की तायीख / Date of Hearing : 28/07/2016 घोषणा की तायीख/Date of Pronouncement 02/08/2016 आदेश / O R D E R This is an appeal filed by the assessee against the order of Cit(A) for assessment year 2010-2011.

2.

In this appeal the assessee is aggrieved for addition of Rs.30,99,000/- u/s.68 and also for disallowance of assessee’s claim of interest of Rs.1,73,640/- out of income from house property claimed u/s.24 of I.T.Act and rejecting claim of deduction u/s.80C for L.I.P. of Rs.1,03,993/-.

3.

I have considered rival contentions and gone through the orders of authorities below. The AO has made addition of Rs.30,99,000/- u/s.68 in respect of loan taken from 11 persons. The AO observed that assessee has not substantiated creditworthiness of the loan creditor. The CIT(A) confirmed the action of AO.

4.

I have carefully gone through the orders of authorities below and found that assessee has taken advance through account payee cheque. In respect of loan creditors assessee has also filed their income tax details along with PAN Nos. In case of some of the creditors assessee has also filed their balance sheets confirming loans having been advanced to the assessee. In some of the cases I also found that assessee has filed capital account and profit and loss account of the loan creditor to substantiate the source of their income. However, the CIT(A) has casually observed that creditors are not assessed to tax and confirmed the addition made by the AO. In respect of documents filed by the assessee to support the contention regarding identity and genuineness, if the AO is not satisfied, he can call the concerned loan creditors to appear before him and call other information u/s.133(6). However, no such steps had been taken by AO. In the interest of justice, I restore this issue back to the file of AO for giving due opportunity to the assessee to substantiate its claim and to re-decide the issue after verifying the documents placed on record in support of identity, genuineness and creditworthiness of the loan creditor. The AO is also at liberty to call for the creditors to appear before him for confirming loan transactions.

5.

With respect to claim of L.I.P. payment u/s.80C the assessee has filed additional evidence before us. In the interest of justice, I restore this ground also to the file of AO for verifying the LIP premium paid by assessee and to consider assessee’s claim u/s.80C as per law.

6.

Similarly for payment of housing loan the assessee has filed additional evidence which were not before the lower authorities. Accordingly, this issue is also restored back to the file of AO for verifying the same and to consider assessee’s claim for deduction u/s.24 of the I.T.Act.

7.

In the result, appeal of the assessee is allowed in part for statistical purposes. Order pronounced in the open court on this 02/08/2016.

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