2020 (10) TMI 244 - AT - Income Tax

Tribunal Decision: Interest Recalculation Upheld, Security Charges Remanded, Rental Income Dispute

Late Shri Anurag Birla, L/H Shri Rishabh Birla Versus Jt. CIT, Range-24, New Delhi

The Tribunal upheld the direction to re-calculate interest disallowance related to property purchase, disallowance of security charges was remanded for ... Disallowance of interest u/s 36(1)(iii) in respect of property at Saket and Gurgaon - HELD THAT:- With respect to the interest disallowance pertaining to the Gurgoan property, the Assessing Officer was directed to re-calculate the disallowance by restricting it to interest portion related to ₹ 68.00 lacs. It has been brought to our notice that in AYs 2008-09 and 2009-10, the issue was restored to the file of the Assessing Officer and the Ld. CIT (A) respectively with the direction to re-compute the interest attributable to ₹ 68.00 lacs. We find that a similar direction has been given by the Ld. CIT (A) in this year also wherein the Ld. CIT (A) has directed the Assessing Officer to re-compute the interest attributable to ₹ 68.00 lacs. Thus, there is no error in the finding of the Ld. CIT (A). Disallowances of security charges - HELD THAT:- AR has stated that he is willing to establish with proof before the Assessing Officer that the security charges were paid for different premises utilized by assessee for business purposes. Accordingly, this issue is restored to the file of the Assessing Officer with the direction to re-examine this issue afresh after giving proper opportunity to the assessee to present his case. Addition on account of house property - property at Grand Mall, Gurgaon was lying vacant during the entire Assessment Year and, therefore, no notional rent can be brought to tax on such vacant premises - HELD THAT:- A perusal of the assessment order shows that this plea of the assessee has not been considered while making the addition on account of notional rent. CIT (A) has also not considered this stand of the assessee while upholding the disallowance. Both the Lower Authorities have placed reliance on assessee’s communication dated 04.03.2013 wherein the assessee is stated to have submitted that this property was let out. Thus, to our mind, factual verification needs to be carried out on the issue. Therefore, we deem it appropriate to restore this issue to the file of Assessing Officer to decide the issue as per law after recording a clear cut finding as to whether at any point of time either during earlier Assessment Years or during the year under consideration, the property was let out or not. While adjudicating the issue, the Assessing Officer is advised to consider ratio of order of the Tribunal in the case of Sh. Anil Kumar Gupta [2019 (3) TMI 893 - ITAT DELHI]. Issues Involved:- Disallowance of interest under section 36(1)(iii)- Disallowance of security charges- Addition on account of house property- Disallowance of Vehicle Expenses- Notional rental income in respect of Shop At Grand Mall, GurgaonAnalysis:Disallowance of Interest under Section 36(1)(iii):The assessee challenged the disallowance of interest amounting to &8377; 9,83,879 related to the purchase of property at Grand Mall, Gurgaon. The issue had arisen in previous assessment years as well. The Tribunal directed the Assessing Officer to re-calculate the interest attributable to the specific amount utilized for the property in question. The direction given by the Ld. CIT(A) was upheld as it was in line with the relief sought by the assessee.Disallowance of Security Charges:The disallowance of &8377; 4,02,396 out of total security charges claimed was contested by the assessee. The Ld. Authorized Representative agreed to provide evidence to show that the security charges were incurred for premises used for business purposes. The issue was remanded to the Assessing Officer for a fresh examination with proper opportunity for the assessee to present its case.Addition on Account of House Property:The addition of &8377; 16,80,000 under the head 'income from house property' for a property in DLF Grand Mall, Gurgaon, based on notional rental income estimation, was disputed by the assessee. The property was stated to be vacant throughout the assessment year, contrary to earlier communication indicating it was let out. The Tribunal directed the Assessing Officer to verify the facts and determine whether the property was let out at any point, considering the precedent set by a previous Tribunal order.Conclusion:The issues raised by the assessee were remanded to the Assessing Officer for fresh consideration, ensuring adequate opportunity for the assessee to present its case. The appeal was partly allowed for statistical purposes, with the final decision pronounced on 30/09/2020.