TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 648
X X X X Extracts X X X X
X X X X Extracts X X X X
.... reasons for the claim under section 24 of the I. Tax Act and the detailed submissions filed by the appellant explaining that there is no concealment nor filing of inaccurate particulars of income by claiming wrongful deduction of Rs. 21,25,096/-. Confirming the levy of penalty without properly appreciating the facts and the reasons for the claim under section 24 of the I. Tax Act and the detailed submissions filed by the appellant explaining that there is no concealment nor filing of inaccurate particulars is bad in law and the same needs to be cancelled". 2. The brief facts qua the levy of penalty are that, the assessee in the return of income has claimed loss of Rs. 21,25,096/- under the head "Income from House Property". The assessee has booked a flat in the building known as "Evita" at Hiranandani Garden in Powai for an aggregate consideration of Rs. 3,47,51,258/-, vide Sale Agreement dated 08.11.2004. For the purchase of the said property, the assessee taken loan from HDFC Bank on which interest of Rs. 21,40,286/- was paid during the previous year. The construction of the said building was completed in financial year 2006-07 and the builder has received occupation certifica....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a Rent Control Act". The Ld. AO held that in absence of possession of the house property, no income or loss from the said property can be computed. Accordingly, he disallowed the claim of loss of Rs. 2,25,096/-. 4. Now, the penalty has been levied on said disallowance of loss for furnishing wrong particulars and also concealing the taxable income. In response to the show cause notice in the penalty proceedings, the assessee has reiterated its contention, however Ld. Assessing Officer held that the assessee has computed the income from house property with sole intention of claiming loss on account of interest paid on borrowed capital. Accordingly, he levied the penalty of Rs. 7,22,320/- after detailed discussion and referring to various decisions. Such a penalty has been confirmed by Ld. CIT(A) also. 5. Before us, Ld. Counsel Shri Vijay Mehta submitted that the whole premise of the Ld. CIT(A) for confirming the penalty is that, assessee has claimed before the AO that he is not liable for tax because assessee had specifically stated that, since he has not taken the possession of the flat formally by the builder, therefore, ALV has been shown by way of abundant precaution on the mun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pril, 2009 as per the certificate issued by Lake View Developers dated April 13, 2009 and checklist dated 13th April 2009 confirming that changes in flat carried out by builder as per assessee's specification and handover of keys; * As the assessee made full payment and maintenance charges including municipal taxes and became full owner of the property with unequivocal right to take possession at his own discretion in respect of property constructed as per contract with the builder and readily available for the purpose of furniture fit outs, he offered the annual ratable value as per BMC tax computation as income from deemed let out house property as per sec. 23(1)(a) as assessee has another house property in Colaba, Mumbai, offered as Self Occupied Property by exercising his option u/s 23(4); * After the physical possession in April 2009 the assessee took up the interior decoration and balance finishing work like civil work, electrical wiring, furnishing etc. during July/December 2009 and the flat became fit and habitable for residential use and capable for letting out effectively from January, 2010. * The assessee has acquired flat No.2051 in his name and similarly flat ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....levied on the owner of the house, immaterial of the fact whether the owner is in possession or enjoyment of the property. In support, he relied upon the decision of Hon'ble Bombay High court in the case of CIT vs Union Land end Society vs CIT reported in [1972] 82 ITR 794. 6. On the other hand, Ld. DR strongly relied upon the order of the CIT(A). 7. We have heard the rival submissions and perused the relevant finding given in the impugned order as well as material placed on record. From the discussion as made above, it is evident that the assessee did got the possession from the builder after the completion of building and occupation certificate obtained from Bombay Municipal Corporation (BMC) and had also made the entire payment as agreed in the sale agreement. It is also an admitted fact that, the assessee in the return of income had taken municipal ratable for the purpose of ALV under section 23(1)(a). From such computation, the assessee has claimed the interest paid on the borrowed capital for the said house property. The Ld. AO has disallowed the loss claimed under the head "income from house property" on the ground that, the assessee himself has admitted that, he has not ta....