TaxTMI 
TaxTMI 
2021 (9) TMI 762
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.... against income from other sources. The action of ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by allowing the deduction of balance interest paid on housing loan, against interest income offered for tax under income from other sources. 3. In the facts and circumstances of the case and in law, ld. CIT(A) has erred in confirming the action of ld. AO, in making addition of Rs. 40,000/- under section 68 of the Income Tax Act, 1961. The action of ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition, made by ld. AO and sustained by ld. CIT(A). " 2. Regarding Ground No. 1, the ld. submitted that the assessee has incurred interest expenses of Rs. 5,06,678/-. However, in the return of income, the assessee has claimed only a sum of Rs. 3,48,888/- u/s 24(b) of the Act and the balance interest pertaining to the construction period was inadvertently not claimed in the return of income amounting to Rs. 1,57,790/-. It was submitted that the revised claim was made before the ld. CIT(A) amounting to Rs. 5,06,678/-. However, the ld. CIT(A....
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....-. Therefore, the housing loan was not fully utilized for housing purpose and accordingly, the ld. AO allowed the interest of Rs. 1,50,000/- against the self occupied property and disallowed the deduction of Rs. 1,98,888/- (3,48,888 -1,50,000). 2.5 During the assessment proceedings, it was explained vide letter dated 5th December, 2011 that a part of the housing loan has been used for giving advances to other parties. The ld. AO himself accepted the fact that the housing loan was not fully utilized for the purpose of construction of the house. However, he failed in appreciating the fact that interest on that part of the loan which has been used for lending and earning interest is allowable under section 56 of the Income Tax Act, 1961. 2.6 Interest pertaining to that portion of loan which is utilized for the purpose of construction of the house is allowable under section 24(b) and the remaining interest is allowable under section 56. Based on actual utilization of housing loan mentioned as above the interest of Rs. 5,06,678/- would be allowable as detailed in para 2.3 above and so claimed during assessment proceedings. 2.7 Deduction u/s 24(b) 2.7.....
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....lars before them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit the department for it would inspire confidence in him that he may be sure of getting a square deal from the department. Although, therefore, the responsibility for claiming refunds and reliefs rests with assessees on whom it is imposed by law, officers should:- (a) draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other; (b) freely advise them when approached by them as to their rights and liabilities and as to the procedure to be adopted for claiming refunds and reliefs; (c) Public Relation Officers have been appointed at important centers, but by the very nature of their duties, their field of activity is bound to be limited." 2.7.6 The very purpose of assessment proceedings u/s 143(3) of the Act is to correctly assess the tax liability of an assessee in accordance with law.. It was therefore against all cannons of law for the ld. A.O. to not allow reliefs to which appellant was clearly entitled but which she had omitted to claim on acco....
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....tement evidencing the above utilization in the Financial Year 2008-09 is placed on record. 2.9 Variation and Increase in claim can be made for the first time before CIT(A) 2.9.1 It is submitted that the details of the utilization of the housing loan were already on record before the ld. AO. 2.9.2 Although during the assessment proceedings, through written submissions, claim of interest was varied and increased, yet, alternatively without prejudice to above, the variation / increase in claim can be made for the first time before the CIT(A). 2.9.3 The total claim of interest stands at Rs. 5,06,678/- and the same is claimed under different sections as follows: S. No. Particulars Amount (In Rs.) 1. Interest to be allowed under Income from Other Sources 2,74,705/- 2. Balance Interest to be allowed under Income from House Property a) Rented House Property- 81,973/- b) SOP House Property- 1,50,000/- Total 5,06,678/- 2.9.4 First appeal is an extension of assessment proceedings. The powers of CIT(A) are co-terminus with that of AO. In this view of the scheme of the law even verification of....
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....im to do what he has failed to do. " "The declaration of law is clear that the power of the AAC is co-terminus with that of the ITO, and if that is so, there appears to be no reason as to why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the ITO. No exception could be taken to this view as the Act does not place any restriction or limitation on the exercise of appellate power. Even otherwise, an Appellate Authority while hearing appeal against the order of a subordinate authority, has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the Appellate Authority is vested with all the plenary powers which the subordinate authority may have in the matter. There appears to be no good reason and none was placed before us to justify curtailment of the power of the AAC in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the ITO." 2.9.8 In view of the Jute Corporation of Indi....
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.... (in Rs.) Opening Balance 27,076/- Add:- Cash Withdrawals from Bank on 15-4-2008 1,00,000/- Add:- Rent from house property received in cash for three months (3000*3) 9,000/- 1,36,076/- Less:- Household Drawings for three months @ Rs. 10,000/- per month 30,000/- Less:- Construction Expenses upto 5-7-2008 31,190/- Total cash available as on 5-7-2008 74,886/- Cash deposited in Bank (added by ld. AO) 40,000/- Copy of Cash Book of the Financial Year 2008-09 is placed on record. 5. During the course of assessment proceedings the source of cash deposited was explained to be out of cash in hand. The cash book is a further evidence to substantiate what was explained to the ld. AO. In view of the above, the addition of Rs. 40,000/- on account of unexplained cash credit may please be deleted. 6. Per contra, the ld. DR relied on the findings of the lower authorities and it was submitted that the housing loan was not fully utilized for housing purposes and the AO rightly allowed the interest to the extent of Rs. 1,50,000/- against self-occupied property and which was rightly sustained by the ld CIT(A) without allowing any further r....