9911796707
TMI Blog2013 (12) TMI 1422X X X X Extracts X X X X X X X X Extracts X X X X ..... le computing income chargeable to income tax under the head 'income from house property” - Interest paid on interest levied by the bank, because of non-payment of instalments of borrowed capital to the bank, does not qualify for an admissible deduction - Decided against assessee. - Income Tax Reference No. 176 of 1998, Income Tax Reference No.12 of 1999, Income Tax Reference No.186 of 1998 - - - Dated:- 21-12-2013 - Rajive Bhalla And Dr. Bharat Bhushan Parsoon,JJ. For the Petitioner : Mr. Akshay Bhan, Advocate and Mr. Aalok Mittal, Advocate For the Respondent : Ms. Urvashi Dhugga, Advocate ORDER Dr. Bharat Bhushan Parsoon, J In all these three Income Tax References, following questions of law have been referred to this Court for adjudication: i) Whether in the facts and circumstances of the case, the Tribunal was right in holding that in view of the original assessment having been made summarily U/S 143(1), there was no question of change of opinion and the Assessing Officer was justified in resorting to action u/s 148 of the Income Tax Act, 1961, particularly as the judgement of the Supreme Court in the case of Shew Kissar Bhatter (1973) 89 I.T.R. 61 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as, the Act). The assessee had disclosed income from property at Rs.51,690/- and Rs.52,700/- for the assessment years 1985-86 and 1986-87 respectively in the return filed for both these years. 7. During proceedings of assessment for the period ranging from 1987-88 to 1991-92, it was noticed that the assessee was having 25% share of rental income of SCO Nos.57, 58 and 59, Sector-17, Chandigarh. It was also noticed that the assessee had been claiming compound interest on loan raised for construction of the property, whereas during the assessment proceedings, it was found that only simple interest was admissible to the assessee. 8. Since income of the assessee had escaped assessment on this account, notice under Section 148 of the Act had been issued to the assessee after seeking prior approval of DCIT(A), in response to which notice, the assessee had furnished return for the assessment year 1985-86 and 1986-87. Since no computation of declared income had been furnished along with the return, notices under Section 143(2) and 142(1) of the Act were also issued to the assessee. During the assessment proceedings when computation chart was furnished by the assessee, it was found that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of computation of income was furnished along with the return, share of the assessee was mentioned as 20% in the rental income, whereas during scrutiny of the cases, it was found that the assessee had not disclosed her income truly in the income tax return. It was in these circumstances that notice under Section 148 of the Act was issued in response to which the assessee had furnished the return declaring net income as Rs.33,350/- when pursuant to notice under section 148 of the Act, the assessee had furnished the return, income was declared disclosing 25% share in the income of the property. It was thus clearly a case of escape of income from the assessment. This adjudication made by the AO at the time of ordering of assessment has not only been approved by the CIT(A) but by the Tribunal as well but actually is correct position of the facts and the law on the point. Clearly enough it was not at all a case of 'change of opinion' but was a clear case of 'escapement of income from assessment' and, therefore, whether jurisdiction of the Hon'ble Supreme Court was available to the AO or not is irrelevant. 15. Next question for determination is as to whether simple interest or compo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or constructed, as reduced by any part thereof allowed as a deduction under any other provision of this Act, shall be deducted under this clause in equal instalments for the said previous year and for each of the four immediately succeeding previous years. 18. When comparative analysis of these two provisions under the two respective Acts is made, it is found that provisions of Section 9(1) (iv) of the Indian Income Tax Act, 1922 has been split into three clauses under the present Act without bringing about any change in the scheme of the Act. In short, provisions under both the Acts are pari-materia in respect of their stratum. 19. At this stage, reference may be made to Shew Kissen Bhatter Versus Commissioner of Income-Tax, West Bengal 1973 ITR 61 (Supreme Court) where in similar circumstances compound interest was disallowed and only simple interest was allowed. It was held that interest paid on borrowed amount is permissible as a deduction only on the amount loaned by the bank and not on the amount added to such amount loaned by the bank for the non-payment of loan amount thus increasing the liability of the assessee in terms of interest which thus would include even com ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
