M/S.KERALA FEEDS LTD,THRISSUR vs. ITO, TRICHUR

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH : COCHIN BEFORE SHRI N. V. VASUDEVAN, VICE PRESIDENT AND MS. PADMAVATHY S, ACCOUNTANT MEMBER

ITA No.167/Coch/2021 Assessment Year : 2015-16 M/s. Kerala Feeds Limited, Vs. The Income Tax Department, Kallettumkara, Irinjalakunda, National Faceless Appeal Thrissur – 680 683. Centre (NFAC). PAN : AAACK 9796 N ITO (TDS), Thrissur. APPELLANT RESPONDENT

Assessee by : Shri. C. V. Varghese, CA Revenue by : Smt. J M Jamuna Devi, Sr AR Date of hearing : 06.12.2022 Date of Pronouncement : 13.12.2022 O R D E R Per Padmavathy S, Accountant Member

This appeal is against the order of CIT(A), National Faceless Appeal Centre (NFAC), Delhi, for the Assessment Year 2015-16. The assessee raised the following grounds: In most of the cases the land is being owned by the spouse. 1) Interest on borrowed funds invested in properties owned by wife/minor children is deductible as per the decisions of Hon'ble High Court of Madras in the case of S.M.A Siddique v. CIT 148 ITR 307 (Mad).

ITA No.167/Coch/2021 Page 2 of 6 2) In the case of Shri. Krishnakumar P.C, the land is owned by his mother. If the assessee was an occupation as owner sale deed is not essential as per the following decisions. 1) Saiffuddin v. CIT 156 ITR 127 (Raj) 2) Smt. Kala Rani v. CIT 130 ITR 321 (Punj & Har). Further, as per the Income-tax Act, the land and the building are 3) separate assets as per the following decisions. Therefore, if an employee had availed housing loan; he is eligible for deduction for the interest paid. CIT vs. Vimal Chand Golecha (1993) 201 ITR 442 (Raj) CIT vs. Dr. D.L. Ramachandra Rao (1999) 236 ITR 51 (Mad) CIT vs. Smt. Lakshmi B. Menon (2003) 264 ITR 76 (Ker) CIT vs. A.S. Aulakh (2008) 304 ITR 27 (P & H) CIT vs. Citi Bank N. A (2003) 261 ITR 570 (Born)

ITA No.167/Coch/2021 Page 3 of 6 “4.5 It is for the appellant to provide the factual details with documentary evidences to show that the interest claim so restricted by the AO is factually or legally wrong. During the course of appeal, the appellant has once agains filed a written submission averring that the property in question was owned by spouses / mother of the employees. These are disputes of fact and nothing prevented the appellant from submitting the details before the AO at the time of spot verification or even thereafter till assessment was completed. Even now, only mere submissions have been made which are not capable of being independently verified. Since no new facts have been brought on record by the appellant to show that the case laws cited are squarely applicable to its case, action of the AO which is based on pure finding of facts, does not warrant any interference and is therefore, fully confirmed. Appellant's Ground No.2 and 3 on the issue is accordingly dismissed.” 4. The learned AR submitted that the assessee has given a detailed submission before the CIT(A) explaining the various provisions based on which the interest on housing loan was claimed and considered for the purpose of TDS by the assessee. However, the CIT(A) has though admitted that the claim of the assessee needs factual examination, concluded the assessment without examining the facts of the case and rejected the appeal of the assessee. The learned DR relied on the order of the CIT(A). 5. We heard the rival submissions and perused the material on record. The AO has raised the demand under section 201(1) with regard to short deduction of tax at source in respect of the following employees along with the reasons thereon:

ITA No.167/Coch/2021 Page 4 of 6

Excess Interest S.N Name of the Reasons given by the AO deduction Employee

Housing Loan Interest not allowable 1,43,553 1 Usha since property is not in the name of Padmanabhan assessee but in the name of Shri Santosh Kumar Vidya Unnikrishnan Property is jointly owned with husband — 2 45,825 Hence claim of Housing Loan interest restricted to 50%

1,29,796 3 Shihabumon Housing Loan Interest not allowable since property is in the name of Bisimi Shihab

53,768 4 Pramod Property is jointly owned with wife — Hence claim of Housing Loan interest restricted to 50%

53.443 5 Vimal P Sivaram Property is jointly owned with wife — Hence claim of Housing Loan interest restricted to 50% Housing Loan Interest not allowable 92,168 6 Krishnakumar since property is not in the name of assessee but in the name of Smt. Chandramathiyama. Principal repayment of loan for 87,293 7 John addition/repair of the property is not eligible for deduction u/s.80C.

Property is jointly owned with husband — 20.684 8 Akhila Hence claim of Housing Loan interest restricted to 50%

ITA No.167/Coch/2021 Page 5 of 6 by the assessee for the purpose of TDS is that the property is not in the name of the employee or the property is jointly owned by the employee and the spouse. The CIT(A) rejected the appeal by stating that the assessee has not submitted the factual details before the AO at the time of spot verification and till the completion of assessment and these submissions are not capable of being verified before him (A). In view of this, in our view, the submissions of the assessee with regard to the facts in the case of each of the employees have not been examined by the lower authorities. We therefore remit the issue back to the AO to factually verify the ownership of the asset against which the housing loan interest have been claimed by the employees and accordingly decide in accordance with law.

Sd/- Sd/- (N. V. VASUDEVAN) (PADMAVATHY S) Vice President Accountant Member Bangalore, Dated: 13.12.2022. /NS/*

ITA No.167/Coch/2021 Page 6 of 6 Copy to: 1. Appellants 2. Respondent 3. CIT 4. CIT(A) 5. DR 6. Guard file By order

Assistant Registrar, ITAT, Bangalore.