SH. ASHOK KUMAR CHANNA,FARIDKOT vs. DCIT, CC-II, LUDHIANA

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ITA 518/CHANDI/2018Status: DisposedITAT Chandigarh25 July 2018AY 2011-123 pages
AI SummaryRemanded

What did the Tribunal hold?

The tribunal found that the assessee could not provide details of properties and rental income. The Revenue also agreed to remand the matter for verification.

What were the facts?

The assessee appealed against the CIT(A)'s order, raising grounds related to additions on interest income and rental income. The assessee claimed insufficient opportunity to provide details for rental income.

What were the issues?

Whether the CIT(A) erred in treating rental income as income from other sources and disallowing deductions without proper opportunity to the assessee.

Which sections of the Income-tax Act were involved?

Section 24

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH’A’, CHANDIGARH

Before: SMT. DIVA SINGH & DR. B.R.R. KUMAR

For Appellant: Shri. Nikhil Goyal
For Respondent: Shri. Yoginder Mittal
Hearing: 11/07/2018Pronounced: 25/07/2018

PER DR. B.R.R. KUMAR, A.M:

The present appeal has been filed by the Assessee against the order of the Ld. CIT(A)-5, Ludhiana dt. 02/02/2018. 2. In the present appeal the Assessee has raised following grounds:

1.

That the Ld. Commissioner of Income Tax (Appeals), Ludhiana has erred in confirming/sustaining the addition of Rs. 1,69,700/- on account of interest received from M/s Ashok Kumar & Co. without appreciating the evidence led by the appellant as per para 4.3 of the order of CIT(A). The appellant/assessee has duly credited and reflected the amount of interest of Rs. 1,69,700/- in interest account and the Ld. Commissioner of Income Tax has ignored this fact and consequently the same income of Rs. 1,69,700/- is taxed twice.

2.

That the Ld. Commissioner of Income Tax has erred in disallowing the claim of deduction of interest of Rs. 1,50,000/- under the head business income just on clerical error as per para 4.4 of the order of CIT(A), whereas, the predecessor of Ld. Commissioner of Income Tax has allowed the deduction in preceding year in similar set of facts & circumstances.

3.

That the Ld. Commissioner of Income Tax has failed and misconceived the facts of rental income earned and declared at Rs. 1,45,000/- by the appellant under the head Income from House Property and correctly claimed the deduction u/s 24 of IT Act, 1961 in return and computation of income. The Ld. Assessing Officer has neither confronted nor granted any opportunity for furnishing the details of properties from where rental income was earned during the year. The Ld. CIT (A) has erred in treating the income of Rs. 1,45,ooo/- as income from other sources relying on the AOs order and wrongly directed to disallow the claim of deduction at Rs. 43,500/- as per para 4.5 of the appellate order appealed against.

4.

That the Ld. Commissioner of Income Tax has erred in sustaining the addition of Rs. 18,425/- on account of interest earned on encashment of FDRs as per para 4.6 of the appellate order appealed against, whereas the appellant/assessee has duly credited the amount of interest on 02.04.2010 in interest account and the Ld. CIT-(A) appears to has not taken this fact into consideration.

5.

That the Ld. Assessing Officer has wrongly initiated the penalty proceedings u/s 271(1)(c) of Income Tax Act, 1961 on account of various additions and disallowances made while passing the Assessment Order.

6.

That the order appealed is bad and against the law and facts of the case.

3.

At the outset the assessee took up the plea that he was not granted

sufficient opportunity for furnishing the details of property from where rental

income was earned during the year.

4.

We have gone through the relevant para of the order of the Ld. CIT(A)

which reads as under:

The facts of the case, the basis of addition made by the A.O. and the submission of the AR during the appellate proceedings have been considered. The AR argued that the assessee has declared rental income to the extent of Rs. 1,45,000/- and the AO arbitrarily adopted the figure of Rs. 96,000/- and treated it as income from other sources. A perusal of the document filed shows that the assessee declared ALV from various properties at Rs. 1,45,000/- and claimed deduction @ 30% u/s 24. However, no address of these properties have been mentioned and a lumsum amount of Rs. 15,000/- per month in cash is shown as receipts from April to October, 2010. However, from November, 2010 to March, 2011 the amount is shown as Rs. 8,000/- per month. The balance sheet filed by the assessee for the year ending 31.03.2010 and 31.03.2011 does not show any property from which the rental income is being claimed. Hence these receipts of Rs. 1,45,000/- in cash have to be treated as 'income from other sources' and rightly added to the income of the assessee. Since the assessee has included in the computation of income a sum of Rs. 1,01,500/- hence the addition should be Rs. 43,500/- instead of disallowance of claim of deduction of Rs. 28,800/-. The AO is directed to re-compute the income accordingly.

5.

On going through the above we find that the assessee could not file the details of the properties as well as the details of the rental income claimed.

6.

Ld. DR has also fairly agreed to remand the matter back to the file of Ld.

CIT(A) for verification and furnish the details hence in the interest of justice we

hereby remand the matter back to the file of Ld. CIT(A) with the direction to the assessee to submit all the relevant details before the Ld. CIT(A) without seeking

unnecessary adjournments.

7.

In the result, appeal of the Assessee is allowed for statistical purposes.

Order pronounced in the open Court. (DIVA SINGH) ACCOUNTANT MEMBER

Dated : 25/07/2018 AG Copy to:

1.

The Appellant

2.

The Respondent

3.

The CIT

4.

The CIT(A) The DR 5. 3

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