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Income Tax Appellate Tribunal, DIVISION BENCH’B’, CHANDIGARH
Before: SMT. DIVA SINGH & DR. B.R.R. KUMAR
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH’B’, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER
ITA No.1074/Chd/2017 Assessment Year: 2007-08
Surinder Kumar Baboota Vs. Asst. CIT SCO 1132-33, Sector 22B Central Circle-II Chandigarh (UT) Chandigarh
PAN No. AFXPK8908D
(Appellant) (Respondent)
Assessee By : Shri. Jaspal Sharma Revenue By : Shri. J.K. Garg Date of hearing : 22/05/2018 Date of Pronouncement : 25/05/2018
ORDER PER DR. B.R.R. KUMAR:
The present appeal has been filed by the Assessee against the order of the Ld. CIT(A)-1, Chandigarh dt. 27/04/2017.
In the present appeal Assessee has raised the following grounds:
The impugned order is both against facts and erroneous in law. 2. On the facts and circumstances of the case the Ld.CIT(Appeals) has erred in having upheld the addition of Rs.2,10,000/- made by the Ld.AO under the head short term capital gains. 3. On the facts and circumstances of the case the Ld.CIT(Appeals) has erred in having confirmed the addition of Rs.1,02,000/- made by the Ld.AO on account of unexplained investment in H.No.3238,Sector 71, Mohali, u/s 69C. 4. On the facts and circumstances of the case the Ld.CIT(Appeals) has erred in having confirmed the disallowance/addition of Rs.21,614/- made by the AO on account of interest on Car loan.
The facts relevant to the case are that the appellant was l/5th owner of house No. 3238, Sector-71, Mohali. The house was sold for 33 lacs. However, during search operations an agreement was found which indicated that the total sale value of the house was Rs. 1,07,50,000/-. The difference of Rs. 67 lacs was surrendered by the co-owners. The assessee share of surrender worked out to Rs. 13.40 lacs. However, at the time of assessment, the Assessing Officer
notices that short term capital gain was not correctly computed. Instead of deducting the cost of acquisition of Rs. 30 lacs from the sale consideration of Rs. 1,07,50,000/-, the sale consideration of Rs. 33 lacs was deducted. While re- computing the short term capital gain, the Assessing Officer computed l/5th share of the assessee at Rs. 15,50,000/- instead of Rs. 13,40,000/- thereby adding the difference of Rs. 2,10,000/- to his income.
It was argued before us that after purchase of the house the assessee has spent Rs. 10,50,000/- on renovation and improvement and the figure of Rs. 67,00,000/- was arrived.
The Ld. AR submitted that on 05/04/2006 an amount of Rs. 9,90,000/- was withdrawn by cheque by name of Kuldeep Arora which was meant for renovation. Before the CIT(A) the assessee could not furnish the evidence of incurring expenditure on account of renovation and improvement. Since as per records (Para No. 7.2 of the CIT(A) no evidence was submitted before the lower authorities, in the interest of justice we feel it fit to remand the matter back to the file of Assessing Officer to examine the payments and allow the capital gains calculated by the assessee in accordance with law.
Ground No. 2 relates to addition of Rs. 1,02,000/- made toward unaccounted investment in the house No. 3238, Sector-71, Mohali. During search, documents found by the revenue indicated that a sum of Rs. 5.10 lacs cash was paid to acquire this property. The Assessing Officer divided the unaccounted payment among 5 co-owners and made addition of Rs. 1,02,000/- towards the income of the assessee u/s 69C as unexplained investment. Since the amount is to be treated as part of investment in the House by the Assessing Officer, the assessee is fairly entitled to get deduction of this amount while computing the profits on account of short term capital gain.
Ground No. 3 relates to disallowance of Rs. 21,614/- of interest on car loan. Pertaining to this disallowance the assessment order states as under:
“3.1 The assessee has claimed interest paid at Rs. 21,614/- the assessee was asked to explain the purpose of loan and where it is utilized. The assessee did not furnish any information. Since the assessee failed to prove that the purpose of paying interest on unsecured loan is linked to his business activities, the interest of Rs. 21,614/- is disallowed and added back to the total income of the assessee.”
The Ld. CIT(A) confirmed the addition on the grounds that the amount cannot be allowed against the interest income earned.
We find as per the record, the assessee is in the business of property dealing and earning of commission. Since no evidence was submitted before the lower authorities, in the interest of justice we feel it fit to remand the matter back to the file of Assessing Officer to allow filing of any evidences in support of the claim and examine the issue in accordance with law.
In the result, appeal of the Assessee is allowed for statistical purposes.
Order pronounced in the open Court.
Sd/- Sd/- (DIVA SINGH) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 25/05/2018 AG Copy to: 1.The Appellant, 2. The Respondent, 3. The CIT(A), 4. The CIT, 5. The DR