2022 (6) TMI 893 - AT - Income Tax

Expenses claimed as deduction u/s.10 - Case selected for scrutiny as taxable income shown in revised return is less than the taxable income shown in the original return and large refund has been claimed and Salary income shown in ITR is less than the salary income as per 26AS - HELD THAT - We noted that the facts are not clearly emerging out of the order of the AO or the CIT(A) whether the assessee is eligible to claim LTA and if any LTA is added to the gross salary of the assessee or not. This issue needs reconsideration and hence, only the issue of LTA is sent back to the file of the AO for reconsideration i.e., for an amount of Rs.2,56,410/-. As regards to food expenses of Rs.36,000/-, telephone expenses of Rs.60,000/-, conveyance expenses of Rs.19,200/- and other exemptions of Rs.1,85,262/-, it is hereby confirmed because these are not related to earning of salary or due to employment urgencies as is envisaged u/s.10(14)(i) (ii) of the Act. Accordingly, this issue is partly set aside to the file of the AO. Income from house property u/s. 24 - CIT(A) noted that the assessee is entitled for claim of deduction to the extent of maximum deduction for self-occupied house property as the assessee claimed the first property as his house property and the second property jointly owned with sister on which the interest on borrowed capital claimed by assessee is Rs.5,37,586/- for which the assessee has earned rental income - HELD THAT - We noticed that the assessee has claimed house property loss of Rs.5,23,579/- out of which the AO himself has allowed the loss claimed on account of interest paid of Rs.2,00,000/- under the head income from house property and balance amount of Rs.3,23,579/- was added. We find no infirmity in the orders of lower authorities and hence, this issue of assessee s appeal is dismissed.

Summary

Issues:
1. Claim of expenses deduction u/s.10 of the Income Tax Act.
2. Claim of income from house property u/s.24 of the Income Tax Act.

Claim of expenses deduction u/s.10 of the Income Tax Act:
The appellant, an employee, claimed various expenses totaling Rs.5,86,872 in the revised return, including LTA, food, medical, telephone, and conveyance expenses, which the AO disallowed as not reported in the gross salary. The CIT(A) upheld the disallowance except for medical expenses. The Tribunal noted ambiguity regarding LTA eligibility and sent it back for reconsideration. However, other expenses were confirmed as not qualifying under section 10. The issue was partly set aside to the AO for further review.

Claim of income from house property u/s.24 of the Income Tax Act:
The appellant owned two properties and claimed interest paid of Rs.5,37,586 for the assessment year 2016-17, against rental income of Rs.30,000. The AO allowed Rs.2,00,000 as deduction for self-occupied property and added the balance to 'income from house property.' The CIT(A) upheld the addition, stating the loss claim was to reduce salary income. The Tribunal found no fault in the lower authorities' orders and dismissed the appeal, affirming the addition of Rs.3,23,579. The appeal was partly allowed for statistical purposes.

In conclusion, the Tribunal addressed the issues of expenses deduction u/s.10 and income from house property u/s.24. The appellant's claim for various expenses was partially upheld, subject to further review by the AO. Regarding income from house property, the Tribunal dismissed the appeal, confirming the addition made by the AO. The judgment was pronounced on 15th June 2022 in Chennai.