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2015 (8) TMI 884 - ITAT DELHI

2015 (8) TMI 884 - ITAT DELHI - TMI - Addition u/s 68 - unsecured loan - AO made impugned addition in absence of details, confirmation, bank accounts and ITR copies of the alleged creditors Shri Manoj Kumar and Shri Uttam Singh - CIT(A) deleted the addition on the basis of information received from the respective banks of the creditors in compliance to the notice issued to these banks u/s 133(6) - Held that:- CIT(A) was right in holding that the assessee discharged her onus by way of filing requ .....

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the basis of information received therefrom the CIT(A) has drawn a logical conclusion that Shri Manoj Kumar and Shri Uttam Singh had sufficient bank balance in their accounts before issuing cheques to the assessee which shows genuineness of the transaction as well as creditworthiness of the alleged creditors. In this situation, the addition made by the AO u/s 68 of the Act could not be held as sustainable and the same was rightly deleted by the CIT(A). - Decided in favour of assessee.

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roperty provided the interest so proposed to be capitalized is not claimed as deduction under the head of income from house property. We are also of the considered view that the calculation and verification of the interest for the period between date of acquisition and date of sale of property has to be done at the end of AO. Therefore, we reach to a logical conclusion that the AO was not correct in denying the capitalization of interest pertaining to the amount which was actually invested towar .....

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h was originally obtained at the time of purchase of property. In view of above conclusion of the AO as well as findings of the CIT(A) being not completely sustainable and in accordance with law, this issue is restored to the file of AO for a fresh adjudication in the light of relevant provisions of the Act and in accordance with the facts and circumstances of the case. The AO is directed to allow the interest on the loan raised for purchase of property and repayment of property loan which was u .....

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ce about the vacancy period of the property under consideration. In this situation, we are of the considered view that the issue requires proper verification and examination at the end of AO and we restore this issue to the file of AO with a direction that the AO shall verify and examine the issue afresh after affording due opportunity of hearing for the assessee and without being prejudiced from the earlier assessment and impugned order on this issue.- Decided in favour of assessee for statisti .....

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nue has raised following grounds in this appeal:- On the facts and circumstances of the case and in law CIT(A) has erred in- 1. Deleting the addition of ₹ 28,75,000/- made by AO u/s 68 of the Income Tax Act, 1961 as the assessee failed to prove the genuineness of the unsecured loan. 2. Deleting the addition when no confirmation has been filed either before the AO and the CIT(A) . 3. Deleting the addition on the basis merely that payment has been made through banking channel when no other e .....

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the AO made disallowance of interest of ₹ 12,82,571/- paid on loan taken from the bank which was deleted by the CIT(A) with the conclusion that the interest paid by the assessee on loan taken from the bank is to be capitalized and rates from the sale consideration of the property while computing the capital gains. Ld. DR submitted that against the relief granted by the CIT(A) to the assessee on this issue, ground could not be raised while filing the original appeal, therefore, the same may .....

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osed to be admitted by the revenue deserves to be admitted being ground arising from the relief granted by the CIT(A) to the assessee and we admit the same. Ground no. 1, 2 & 3 of the revenue 6. We have heard arguments of both the sides apropos this ground of the revenue and also perused the relevant material placed on record before us. Ld. DR submitted that the CIT(A) has erred in law and on facts in deleting the addition of ₹ 28,75,000 made by the AO u/s 68 of the Income Tax Act 1961 .....

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restoring that of the AO on this issue. 7. Ld. AR strongly supported the impugned order and submitted that the AO made addition u/s 68 of the Act without any basis. Ld. AR further submitted that as per details filed by the assessee on 17.10.2011, the assessee very well established that she has taken a loan of ₹ 15,75,000 from one Shri Manoj Kumar and of ₹ 13 lacs from one Shri Uttam Singh in addition to other unsecured loans along with details/confirmation. Ld. DR further submitted t .....

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Uttam Singh had sufficient bank balance before issuing cheques to the assessee, therefore, impugned addition was deleted by the first appellate authority. Ld. DR also placed rejoinder to the above submissions by the assessee and submitted that the assessee has deliberately concealed particulars of her income and despite summons issued to these creditors nobody attended nor the required details/confirmations, bank account and ITRs were filed, therefore, the assessee did not discharge her onus to .....

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u/s. 68 of the Act. She submitted that temporary loans had been taken by her from Sh. Manoj Kumar and Sh. Uttam Singh and since, she was not on good terms with them as on today, she requested that these persons may be summoned u/s. 131 of the Act. Accordingly, summons were issued to both Sh. Manoj Kumar and his father Sh. Uttam Singh. The appellant also informed that the present address of both Sh. Manoj Kumar and Sh. Uttam Singh was F -191, Prashant Vihar, Delhi - 110 085. Summons were again i .....

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48362 issued by the appellant Mrs. Rekha Bansal from her account no. 4104155000012813 to Sh. Manoj Kumar and Sh. Uttam Singh for ₹ 15,75,000/- and ₹ 13 lacs respectively. These copies, duly authenticated by the bank were provided by Karur Vysya Bank and have been placed on record. These cheques were deposited in the bank accounts of Sh. Manoj Kumar and Sh. Uttam Singh in HDFC Bank, A-24, Pushpanjali Enclave, Ring Road, Pitampura, New Delhi - 110034. Notice u/s. 133(6) was issued to H .....

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reby deleted. 9. As per submissions of both the sides, it is amply clear that the AO made impugned addition in absence of details, confirmation, bank accounts and ITR copies of the alleged creditors Shri Manoj Kumar and Shri Uttam Singh. During first appellate proceedings, the CIT(A) granted relief to the assessee on the basis of information received from the respective banks of the creditors in compliance to the notice issued to these banks u/s 133(6) of the Act wherein the first appellate auth .....

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ed her onus by way of filing required details, confirmation and other relevant documentary evidence and also by filing PAN Number and addresses of the respective creditors. However, the alleged creditors did not comply with the notice u/s 131 of the Act and did not appear either before the AO or before the CIT(A) but the first appellate authority adopted course of verifying the genuineness of the transaction and creditworthiness of the respective creditors from their respective banks by issuing .....

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y, ground no. 1, 2 and 3 of the revenue being devoid of merits are dismissed. Additional ground of the revenue 10. Apropos additional ground of revenue, ld. DR submitted that the CIT(A) has grossly erred in allowing the interest of ₹ 12,82,571 paid on the loan taken from the bank to be capitalized and reduced from the sale consideration of the property while computing the capital gain. Ld. DR vehemently pointed out that property no. 163, Deepali, Pitampura, Delhi was purchased at ₹ 6 .....

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tting that the impugned order may be set aside by restoring that of the AO. 11. Ld. AR strongly supported the impugned order and submitted that when the assessee paid interest on the loan taken for purchase of property, then the amount of interest should be capitalized for calculation of capital gains accrued to the assessee on sale of such property. Ld. AR further pointed out that the AO was not justified in denying the benefit of interest to the assessee which was paid from the bank account of .....

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sband Shri Ajay Kumar Bansal. The CIT(A) granted relief to the assessee by observing that the evidence gathered u/s 133(6) of the Act from ICICI Bank, Home Loan Branch with regard to home loan given to the assessee and her husband explains that the repayment of loan has been made from the assessee s account with Karur Vysya Bank, Rohini Branch. From the statement of authorized representative of ICICI Bank, the CIT(A) also noticed that in the case of loan taken by ladies, bank has a policy of inc .....

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ost of ₹ 63,68,450, then the interest paid by the assessee on subsequent loan from ICICI Bank on loan amount of ₹ 85 lakh cannot be allowed to be capitalization while deducting capital gain on sale of said property. 13. From the first appellate order in para 4.4 at page 5-6 we note that the CIT(A) granted relief for the assessee by observing as under:- 4.4 In the fourth ground of appeal, the appellant has impugned the addition of ₹ 12,82,571/- being interest paid to bank on loa .....

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ng with his assessment order u/s 143(3) for A.Y. 2009-10 passed by ITO Ward 21(3), New Delhi. Further, evidence was also gathered u/s 133(6) of the Act from ICICI Bank, Home Loan Branch with regards to Home Loan given to Sh. Ajay Bansal and Smt. Rekha Bansal, wherein, the Authorised Representative of ICICI Bank Ltd. has stated that "The repayment of the loan has been made from the Rekha Bansal account with the Karur Vysya Bank Ltd., Rohini Branch" and that "it is generally true th .....

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Vysya Bank Ltd. Therefore, she cannot be denied the benefit of capitalizing this interest and reduce it the same from the sale consideration of the property. Accordingly, this addition to the income of the appellant under the head Capital Gains is hereby deleted. Although, the AO has correctly charged the Short Term Capital Gains on purchase and sale of properties under the appropriate head "Capital Gains" rather than under the head "Other Sources" as returned by the appellan .....

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nk wherein it was revealed that the loan was taken jointly by the assessee and her husband amounting to ₹ 85 lakh and impugned interest was paid to the bank from the assessee s bank account in Karur Vysya Bank Ltd. At this juncture, we respectfully take cognizance of the ratio laid down by the Hon ble Jurisdictional High Court of Delhi in the case of CIT vs Mithilesh Kumar reported in 92 ITR 09 (Del) wherein it was held that the assessee in order to purchase the land had not only to borrow .....

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the assessee is entitled for capitalization of interest actually paid by the assessee on the loan taken for purchase of said property provided the interest so proposed to be capitalized is not claimed as deduction under the head of income from house property. We are also of the considered view that the calculation and verification of the interest for the period between date of acquisition and date of sale of property has to be done at the end of AO. Therefore, we reach to a logical conclusion th .....

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btained loan of ₹ 85 lakh jointly with her husband , a part therefrom which was utilized for repayment of home loan which was originally obtained at the time of purchase of property. In view of above conclusion of the AO as well as findings of the CIT(A) being not completely sustainable and in accordance with law, this issue is restored to the file of AO for a fresh adjudication in the light of relevant provisions of the Act and in accordance with the facts and circumstances of the case. T .....

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) The AO would allow the capitalization of interest subject to condition that the same was not claimed by the assessee as deduction during the relevant financial periods for calculation of income under the head of income from house property . Accordingly, additional ground no. 2 of the revenue is deemed to be allowed for statistical purposes for the limited purpose as indicated above. C.O. No. 43/Del/14 of the assessee 16. At the outset, ld. AR submitted that CO No. 1 and 4 are general in nature .....

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as well as conclusion of the CIT(A) in the impugned first appellate order. Ld. AR vehemently contended that the CIT(A) has erred in law and facts while confirming the addition of ₹ 3,92,000/- to the returned income and not allowing the claim of vacancy allowance. Ld. AR has also drawn our attention towards copy of the rent agreement between the assessee and the tenant M/s Cross Road Logistics Pvt. Ltd. dated 1.11.2008 and submitted that the property was rented out only for the period of fi .....

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ion may kindly be directed to be deleted as the property had remained vacant for first seven months of the financial year i.e. 1.4.2008 to 31.10.2008. 18. Ld. DR supporting the action of the AO and impugned order submitted that the assessee was allowed repeated opportunity to produce any kind of evidence to prove that the property had actually remained vacant for the period of seven months but the assessee failed to produce any cogent evidence to support vacancy of seven months, therefore, the A .....

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