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2022 (12) TMI 746 - AT - Income TaxUndisclosed commission income - HELD THAT - The assessee offered an amount as C F commission agent for FY 2008-09. During the course of hearing before the ld. AO the assessee accepted Rs. 3000 in July 08 bill and Rs. 43 in August 08 bill erroneously not accounted. Assessee has also disclosed Rs. 32,406/- as other commission under miscellaneous income. Thus total commission income has been shown at Rs.6,33,831/-. Therefore, under the given facts there was no further requirement to make addition and the same is hereby deleted. The finding of the ld. CIT(A) is reversed. Ground no. 1 is allowed. Unaccounted reimbursement expenses - HELD THAT - The assessee claimed expenses as reimbursable being amount spent on behalf of M/s. FKIPL. These expenses were directly debited in M/s. FKIPL account and not to Profit Loss A/c. The reimbursement of expenses received from M/s. FKIPL have been treated as unaccounted expenditure by Revenue. We, however, on perusal of the submissions of the assessee made before the ld. CIT(A) find merit and hold that no such addition was called for as these are merely reimbursement of expenses, which the assessee has incurred on behalf of M/s. FKIPL and got it reimbursed but not debited to the P/L account. Thus, finding of ld. CIT(A) is reversed. Ground no.2 raised by the assessee is allowed. Addition for concealed interest - HELD THAT - We observe that the assessee received Rs.26,984/- net of TDS during FY 2008-09, which was related to FY 2007-08. The assessee filed necessary details before the ld.AO to show that the alleged interest on security relates to FY 2007-08 and the same was duly disclosed in the P/L account in the preceding year. This submission of the assessee before the ld. CIT(A) stands uncontroverted by the ld. DR. We are, therefore, inclined to hold that the ld.AO erred in making addition - The finding of the ld. CIT(A) stands reversed. Ground no. 3 is allowed. Disallowance of interest - loan was taken for the purpose of construction of house property - HELD THAT - As on perusal of the written submissions before the ld. CIT(A) it is discernible that the assessee had taken housing loan from B.O.I (Bank of India) as well as other credit facilities. This loan was taken for the purpose of construction of house property. The said property has been let out on rent. The assessee has filed documentary evidences before the lower authorities to prove that the loans were utilised for construction of rented property and the same is allowable u/s. 2(24)(b) - AO has also accepted the fact that the assessee has taken a house building loan from Bank of India for the property located at Thakurpukuar, Kolkata. Though the assessee has paid total interest on borrowed loans including housing loan at Rs. 6,46,390/- the ld. AO allowed only to the extent at Rs. 1,83,680/-. However looking to the fact that the assessee took a housing loan and interest paid thereon is subject to deduction u/s. 2(24)(b) of the Act against rental income. We are of the considered view that the assessee deserves for deduction u/s. 24(b) of the Act of the interest paid on having loan - We accordingly reverse the finding of the ld. CIT(A) and delete the addition of Rs.4,62,710/-. Ground no. 4 raised by the assessee is allowed
Issues Involved:
1. Addition of undisclosed commission income 2. Addition of unaccounted reimbursement expenses 3. Addition for concealed interest 4. Disallowance of interest on loan 5. General ground Analysis: 1. Addition of Undisclosed Commission Income: The assessee contested the addition of undisclosed commission income of Rs. 24,418. The tribunal found that there were mistakes in the accounting of bills, leading to inadvertent errors. The total commission income disclosed by the assessee was Rs. 6,33,831, which included the previously undisclosed amounts. As a result, the tribunal concluded that there was no further need for the addition of Rs. 24,418, and it was deleted. The decision of the CIT(A) was overturned, and ground no. 1 was allowed. 2. Addition of Unaccounted Reimbursement Expenses: Regarding the addition of unaccounted reimbursement expenses amounting to Rs. 1,63,716, the tribunal noted that these expenses were reimbursed by M/s. FKIPL and were not debited to the Profit & Loss account. After reviewing the submissions made by the assessee, the tribunal concluded that no addition was warranted as these expenses were merely reimbursements incurred on behalf of M/s. FKIPL. Therefore, the tribunal reversed the CIT(A)'s decision, and ground no. 2 raised by the assessee was allowed. 3. Addition for Concealed Interest: The issue of addition for concealed interest of Rs. 30,082 was examined by the tribunal. It was observed that the interest received by the assessee was related to the previous financial year and had been duly disclosed in the Profit & Loss account of that year. The tribunal found the submissions of the assessee uncontroverted and held that the addition made by the AO was erroneous. Consequently, the tribunal allowed ground no. 3 by reversing the CIT(A)'s finding. 4. Disallowance of Interest on Loan: The tribunal addressed the disallowance of interest amounting to Rs. 4,62,710 on the loan taken for the construction of a rented property. After reviewing the documentary evidence provided by the assessee, which demonstrated that the loans were utilized for the construction of the rented property, the tribunal concluded that the interest paid on the housing loan was allowable under the Income Tax Act. Therefore, the tribunal reversed the CIT(A)'s decision and deleted the addition of Rs. 4,62,710. Ground no. 4 raised by the assessee was allowed. 5. General Ground: The tribunal noted that ground no. 5 was general in nature and required no specific adjudication. In conclusion, the tribunal allowed the appeal of the assessee after addressing and resolving the various issues raised in the appeal.
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