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TMI Blog2022 (6) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... services charges have to be assessed under the head Income from house property . The matter is thus decided in favour of the assessee and the grounds of appeal are disposed off accordingly. Disallowance of interest paid to Saraswat Co opertative Bank - Addition holding that the loan taken from the bank is not used towards house property and that the same was obtained to be utilized for investment in sponge iron project and the said findings has since been confirmed by the ld.CIT(A) - HELD THAT:- As perused the material available on record. In absence of any demonstrative evidence on record that the loan amount was utilized for repayment of earlier loans obtained for the purpose of housing, deduction towards interest cannot be allowed while computing the income under the head income from house property . However, given the undisputed fact that the assessee has taken the loan for the purposes of his business and has incurred the interest liability the same is directed to be allowed while computing the income under the head Profits and Gains of Business and Profession . In the result, the ground of appeal is allowed. Disallowance being 15% of the expenditure claimed on acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ld CIT(A). It is therefore a case where certain contentions regarding nature and source of transaction have been raised by the assessee which are however not supported by any documentation and in such a scenario, we do not see any infirmity in the action of the AO and in action of the ld CIT(A) in confirming the same. In light of the same, we do not see any justifiable basis to interfere with the findings of the ld CIT(A) and the same are hereby confirmed and the ground of appeal taken by the assessee is dismissed. Addition u/s 68 - HELD THAT:- Regarding transactions with Umesh Gupta and Dilip Thakre, where the assessee has filed the necessary confirmations, a fact not disputed by the lower authorities, the addition is hereby directed to be deleted and in respect of other transactions, we find that the assessee has clearly failed to discharge the initial onus cast on him to satisfactory explain the said transactions with appropriate documentation, the additions are hereby confirmed. In the result, the additions are hereby deleted and remaining additions of Rs 1,00,000/- are sustained. In the result, the ground of appeal is partly allowed. Loan received from mother ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That the learned CIT(A) erred in law and on facts in confirming the action of AO in not considering the amount received as Service Charges and Common Maintenance Charges in proper perspective. On the facts and in circumstances of the case the amount received as service charges and common maintenance charges is part and parcel of rent and the action of the learned authorities in not considering the same in Annual letting value is highly unjustified. (5) That the learned CIT(A) erred in law and on facts in confirming the action of AO in not allowing interest of Rs. 1,36,407/- being interest paid to Saraswat Corporative Bank. On the facts and circumstances of the case the learned authorities failed to consider that the amount was partly obtained for repayment of earlier housing loan. (6) That the learned CIT(A) erred in law and on facts in confirming and upholding the action of AO in not allowing the deduction of interest to the extent of Rs. 25,441/- and restricting the same to Rs. 22,146/-. On the facts and in the circumstances of the case the action of the learned authorities is unjustified. (7) That the learned CIT(A) erred in law and on facts in confirming and up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not require any separate adjudication. Further, during the course of hearing, the ld. AR did not press ground No.6. Hence, the same is dismissed as not pressed. 3. Regarding ground No. 2 to 4 and ground No. 7, the ld. AR submitted that these relates to two agreements of leave license and service charges, which were entered into by the assessee in respect of which, the assessee has offered the income under the head income from house property , whereas the Assessing Officer has brought the same under head income from other sources . It was submitted that both this agreements were duly produced before the Assessing Officer as well as before the ld. CIT(A) and are part of the assessment and the appellate records and there is no dispute regarding the same. It was also submitted that the details of rent and service charges were also verified by the Assessing Officer from the TDS certificates, which were enclosed with the return of income. It was submitted that in the earlier assessment year 2003 04, the Assessing Officer assessed income from rent and service charges received from ICICI Prudential Life Insurance Co. Ltd and IDBI Bank Ltd. as income from House property. It was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided to the tenant. It was accordingly submitted that the findings of the ld.CIT(A) that the services are independent of the rent agreement signed separately by assessee is factually incorrect. Further, reliance was placed on the Hon ble Bombay High Court decision in the case of CIT v/s. National Storage (P) Ltd. 48 ITR 577 as well as decision of Hon ble Calcutta High Court in case of CIT v/s. Shambhu Investments(P) Ltd. 249 ITR 47. It was submitted that both the decisions have subsequently been affirmed by the Hon'ble Supreme Court. 4. Per contra, the ld. DR has relied on the findings of the Assessing Officer as well as the ld.CIT(A). 5. We have heard the rival contentions and perused the material available on record. On close reading and examination of the two agreements namely, leave and licence agreement as well as service agreement entered into by the assessee with IDBI Bank, we are of the considered view that the predominant intention of entering into these agreements is letting out of the property and not provision of any independent services. In substance, both the agreements talks about letting of premises and provision of space along with certain incidental se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r investment in sponge iron project and the said findings has since been confirmed by the ld.CIT(A). 7. It was submitted that the loan was taken from Saraswat Co op Bank and interest of . 1,36,407/ was incurred for the purpose of repayment of earlier housing loan of Bank of India Ltd., the loan was secured by way of equitable mortgage on house property and the sanction letter from Saraswat co operative Bank was produced before the Assessing Officer and the ld.CIT(A) and necessary explanations along with bank statements were also furnished. Alternatively, it was submitted that where the claim of the assessee that the amount was utilized for repayment of earlier loans obtained for the purpose of housing is not accepted then in such a scenario deduction may be allowed from income under the head Profits and Gains of Business and Profession as there is no dispute that the assessee has incurred the interest liability of interest of . 1,36,407/ . 8. Per contra, the ld. DR has relied on the findings of the Assessing Officer as well as the ld.CIT(A). 9. We have heard the rival contentions and perused the material available on record. In absence of any demonstrative evidence on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the Assessing Officer on the basis of TDS certificate mentioning interest income of . 43,524/ received from UCO Bank. The ld. AR submitted that it was explained before the ld.CIT(A) that TDS certificate was incorrect and the assessee actually received interest of . 28,048/ from UCO Bank, which was duly reflected in the bank statement as well as books of accounts and therefore, the addition made merely on the basis of TDS certificate is unjustified and same may be directed to be deleted. 14. Per contra, the ld. DR has relied on the findings of the Assessing Officer as well as the ld.CIT(A). 15. We have heard the rival contentions and perused the material available on record. The AO has returned a finding that the assessee has reported interest income of Rs 28,048/- as against interest in TDS certificate of Rs 43,524/- whereas the whole of TDS credit as shown in the TDS certificate of Rs 4440/- has been claimed by the assessee. The ld CIT(A) has returned a finding that the contention of the assessee that he has actually received less interest income is not supported by any bank statement or any other documentary evidence. Further, during the course of hearing, nothing ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .CIT(A) has confirmed the addition of . 1,35,000/ under section 68 of the Act. It was submitted by the ld AR that the same relates to loan transactions and in respect of two persons namely Umesh Gupta and Dilip Thakre, the assessee has furnished the confirmation and in respect of remaining loan transaction from different persons amounting to . 1 lakh, the name of these persons were submitted. It was submitted that these two confirmations filed by the assessee before the Assessing Officer were not considered either by the Assessing Officer or by the ld. CIT(A). It was submitted that these are small transactions and duly reflected in regular books of accounts. No evidence was found of unaccounted income being used as cash credit. Therefore, the addition may kindly be deleted. 20. Per contra, the ld. DR has relied on the findings of the Assessing Officer as well as the ld.CIT(A). 21. We have heard the rival contentions and perused the material available on record. Regarding transactions with Umesh Gupta and Dilip Thakre, where the assessee has filed the necessary confirmations, a fact not disputed by the lower authorities, the addition is hereby directed to be deleted and in re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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