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TMI Blog2021 (9) TMI 762X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has incurred an interest expense during the financial year is clearly emerging from records. Therefore, the interest pertaining to the quantum of loan utilised for construction of house property shall be eligible for deduction against the income shown under the head Income from house property and the remaining interest pertaining to the quantum of loan utilised for advancing to certain parties shall be eligible for deduction against the interest income shown under the head Income from other sources . Addition towards unexplained cash deposit in the bank account - HELD THAT:- On perusal of cash flow statement, it is noted that the assessee was having cash in her hands which reasonably explain the source of cash deposit in her bank account. The addition so made is hereby directed to be deleted. - ITA No. 1156/JP/2019 - - - Dated:- 14-9-2021 - Shri Sandeep Gosain, JM And Shri Vikram Singh Yadav, AM For the Assessee : Sh. Rohan Sogani (CA) For the Revenue : Smt. Monisha Choudhary (JCIT) ORDER PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT (A)-2, Jaipur dated 25.07.2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the ld. CIT(A) has not considered the same and has merely confirmed the order of the Assessing Officer. It was accordingly submitted that to the extent of loan utilized for construction of the house, the assessee be allowed a deduction towards interest amounting to ₹ 2,31,973/- and as regards the amount of loan utilized towards onward lending in respect of which interest income has already been offered to tax, the interest expense of ₹ 2,74,705/- should be allowed. 3. In this regard, the assessee further relied on the written submissions made before the ld. CIT(A) which is reproduced as under:- 2.1 During the year the appellant had paid interest of ₹ 5,06,678/- to ICICI Bank against the housing loan taken for the purpose of construction of second floor. The construction of the second floor was completed during the relevant assessment year. These facts are undisputed. Out of total interest of ₹ 5,06,678/-, ld. AO allowed claim of ₹ 1,50,000/- only resulting into a disallowance of ₹ 3,56,678/-. 2.2 Out of the total interest of ₹ 5,06,678/-, interest of ₹ 1,57,790/- pertained to construction period. Due to ignora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he property has been acquired or constructed, shall be deductable u/s 24(b) in equal installments for the said previous year and for each of the four immediately succeeding previous years. In the present case, since the construction of the property was completed during the relevant assessment year full interest would be allowable u/s 24(b) and no part of interest would be disallowable on account of being related to construction period. 2.7.2 The ld. AO s allegation that in the certificate of ICICI bank, there is specific mention that pre EMI interest from April, 2008 to March, 2009 is zero is irrelevant because even if there is interest for pre construction period, the interest is fully allowable if construction is completed in relevant assessment year, in view of Explanation to section 24(b) as explained above. 2.7.3 The observation of the ld. AO that regular EMI of ₹ 49,743/- is being paid from the month of April, 2008 onwards can have no adverse bearing on the claim of the assessee. 2.7.4 The ld. AO s allegation that appellant has shown rental income of ₹ 36,000/- for the whole year for one portion of the house property is also irrelevant because as me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the jurisdictional High Court in the case of Commissioner of Income Tax v. Rajasthan Fasteners (P) Ltd. (2014) 266 CTR (Raj) 401 wherein it was held as under: The purpose of assessment proceedings before the taxing authorities was to assess the income correctly and the tax liability of an assessee in accordance with law. 2.8 Deduction u/s 56 2.8.1 It is humbly submitted that the appellant has taken housing loan of ₹ 45,00,000/- in the month of March, 2008, which was utilized as under: S. No. Particular Nature Amount Date 1. Pinkcity Landbase (P) Ltd. Advance 4,50,000/- 17/03/2008 2. Shree Shyam Landbase (P) Ltd. Advance 20,00,000/- 17/03/2008 3. Repayment of loan to IDBI taken for construction of ground floor and 1st floor Repayment 15,34,481/- 06/03/2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 2008-09 is placed on record. 2.9 Variation and Increase in claim can be made for the first time before CIT(A) 2.9.1 It is submitted that the details of the utilization of the housing loan were already on record before the ld. AO. 2.9.2 Although during the assessment proceedings, through written submissions, claim of interest was varied and increased, yet, alternatively without prejudice to above, the variation / increase in claim can be made for the first time before the CIT(A). 2.9.3 The total claim of interest stands at ₹ 5,06,678/- and the same is claimed under different sections as follows: S. No. Particulars Amount (In Rs.) 1. Interest to be allowed under Income from Other Sources 2,74,705/- 2. Balance Interest to be allowed under Income from House Property a) Rented House Property- 81,973/- b) SOP House Property- 1,50,000/- Tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner has, therefore, plenary powers in disposing of an appeal. The scope of his power is conterminous with that of the Income Tax Officer. He can do what the Income Tax Officer can do and also direct him to do what he has failed to do. The declaration of law is clear that the power of the AAC is co-terminus with that of the ITO, and if that is so, there appears to be no reason as to why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the ITO. No exception could be taken to this view as the Act does not place any restriction or limitation on the exercise of appellate power. Even otherwise, an Appellate Authority while hearing appeal against the order of a subordinate authority, has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the Appellate Authority is vested with all the plenary powers which the subordinate authority may have in the matter. There appears to be no good reason and none was placed before us to justify curtailment of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as submitted that the appellant is preparing books of account. The cash had been deposited by appellant out of cash withdrawals from bank and cash in hand as under: Particulars Amount (in Rs.) Opening Balance 27,076/- Add:- Cash Withdrawals from Bank on 15-4-2008 1,00,000/- Add:- Rent from house property received in cash for three months (3000*3) 9,000/- 1,36,076/- Less:- Household Drawings for three months @ ₹ 10,000/- per month 30,000/- Less:- Construction Expenses upto 5-7-2008 31,190/- Total cash available as on 5-7-2008 74,886/- Cash deposited in Bank (added by ld. AO) 40,000/- Copy of Cash Book of the Financial Year 2008-09 is placed on record. 5. During the course of assessment proceedings the source of cash deposited was explained to be out of cash in hand. The cash boo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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