2022 (3) TMI 881 - AT - Income Tax

Disallowance of loss claimed on house property - As stated assessee transferred an amount to his brother onward payment of LIC HFL but there was no evidence to corroborate the same - HELD THAT - Assessee was one of joint account holder and the claim of house property loss was disallowed on the basis that the brother of the assessee had paid entire liability of loan. It was stated by the assessee that his share related to the loan was paid to the brother of the assessee. No inquiry has been made from the brother of the assessee. Therefore,we deem it proper to set aside the order of Ld.CIT(A) on this issue to the file of Assessing Officer to decide afresh. Disallowance of deduction u/s 80C - HELD THAT - Since this ground is related to Ground No.1 wherein Ground No.1 has been restored to the file of the Assessing Officer, this issue is also restored to the AO for verifying the veracity of the claim of the assessee. Thus, Ground No.2 raised by the assessee is allowed for statistical purposes.

Issues Involved:
1. Disallowance of loss claimed on house property.
2. Disallowance of deduction u/s 80C of the Income-tax Act, 1961.
3. Validity of orders passed by the lower authorities.
4. Compliance with principles of natural justice and equity.

Analysis of Judgment:

Issue 1: Disallowance of loss claimed on house property:
The Assessing Officer re-opened the assessment based on information that the assessee invested in immovable property. The AO disallowed the claim of loss from house property amounting to ?1,11,574. The assessee, in the appeal before the CIT(A), contended that the entire housing loan was not paid by the brother but shared with the assessee. However, due to the absence of representation, the appeal was dismissed. The ITAT found that there was no evidence to support the transfer of ?1,35,000 to the brother for loan repayment. The ITAT set aside the CIT(A)'s order and directed the AO to re-examine the issue.

Issue 2: Disallowance of deduction u/s 80C:
The AO also disallowed the deduction u/s 80C claimed by the assessee. The ITAT noted that this issue was interlinked with the first issue. As the first issue was remanded back to the AO for fresh consideration, the ITAT also directed the AO to verify the veracity of the deduction u/s 80C claim. Consequently, the disallowance of the deduction u/s 80C was set aside for further examination.

Issue 3: Validity of orders and principles of natural justice:
The assessee raised concerns about the legality and factual correctness of the orders passed by the lower authorities. The ITAT acknowledged the absence of the assessee during the proceedings before the CIT(A) and emphasized the importance of adherence to natural justice principles. The ITAT's decision to remand the issues back to the AO for fresh consideration aimed to ensure a fair and just determination of the matters in accordance with established legal principles.

Conclusion:
In conclusion, the ITAT allowed the appeal of the assessee for statistical purposes, remanding both issues of disallowance of house property loss and deduction u/s 80C back to the AO for re-examination. The judgment highlighted the significance of proper evidence and due process in tax assessments, emphasizing the need for a thorough and fair assessment based on factual accuracy and legal principles.

This comprehensive analysis of the judgment provides a detailed overview of the issues involved, the arguments presented, and the ITAT's decision, ensuring a thorough understanding of the legal aspects and implications of the case.

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