2021 (4) TMI 291 - AT - Income Tax

Tribunal allows appeals, deletes additions on capital gains, permits deductions under Sections 24, 80C, 80TTA

Anjula Goel Versus The D.C.I.T., Circle-II, Chandigarh.

Anjula Goel Versus The D.C.I.T., Circle-II, Chandigarh. - TMI Issues Involved:1. Addition of alleged bogus long-term capital gains under Section 68 of the Income Tax Act.2. Disallowance of commission paid for the accommodation entry.3. Denial of deduction of interest paid on housing loan under Section 24.4. Denial of deduction claimed under Section 80C.5. Deduction under Section 80TTA.Issue-wise Detailed Analysis:1. Addition of Alleged Bogus Long-Term Capital Gains Under Section 68:During the assessment, the AO noted information from the Investigation Wing about large-scale tax evasion via bogus long-term capital gains through penny stocks, including the assessee. The assessee's income from the sale of shares in M/s Cressanda Solutions Limited was treated as bogus. Statements from search operations revealed admissions of unaccounted income from such transactions. The assessee's revised return included this income as 'Income from other sources,' but it was not disclosed in the return filed in response to notice under Section 153A. The AO added this to the assessee's income, which the CIT(A) upheld.However, the assessee contended before the Tribunal that this income was disclosed and taxed in the hands of M/s Rohit Traders before the Settlement Commission. The Tribunal found merit in this argument, noting the specific surrender of the impugned capital gains in the hands of M/s Rohit Traders. The Tribunal directed the deletion of the addition, preventing double taxation of the same income.2. Disallowance of Commission Paid for the Accommodation Entry:The AO also disallowed the commission paid for the accommodation entry related to the bogus long-term capital gains. The CIT(A) upheld this disallowance. However, since the Tribunal directed the deletion of the addition related to the bogus long-term capital gains, the disallowance of the commission paid for the same was also deleted.3. Denial of Deduction of Interest Paid on Housing Loan Under Section 24:The AO denied the deduction of interest paid on the housing loan, citing the interest certificate issued in the name of the assessee's husband. The assessee argued that the property was jointly owned, and the loan was jointly taken, with repayments made by the assessee. The Tribunal examined the sale deed, loan statements, and bank certificates, confirming joint ownership and repayments. The Tribunal directed the AO to allow the deduction under Section 24.4. Denial of Deduction Claimed Under Section 80C:The AO denied the deduction under Section 80C for the repayment of the housing loan, citing similar reasons as for the interest deduction. The Tribunal, after reviewing the evidence, including the joint ownership and repayments, directed the AO to allow the deduction under Section 80C.5. Deduction Under Section 80TTA:The AO denied the deduction under Section 80TTA for interest earned on the savings bank account due to a lack of evidence. The Tribunal noted that the interest income was accepted by the Revenue, and thus, the deduction should logically follow. The Tribunal directed the AO to allow the deduction under Section 80TTA.Conclusion:The Tribunal partly allowed the appeals, directing the deletion of additions related to bogus long-term capital gains and associated commission, and allowing deductions under Sections 24, 80C, and 80TTA. The appeals for both assessment years 2015-16 and 2016-17 were disposed of with similar findings and directions.