Ajay Sharma S/o Sh. Bansi Dhar Sharma Vs JCIT (OSD) (ITAT Amritsar)
The Life Insurance Premium Rs.17,770/- was not claimed during the filing of return and same for tuition fee and repayment of HBL amount of Rs.19,440/-and Rs.2996/- respectively. The copy of the receipts as proof of payments are enclosed in APB 15, 19, and 21. In case interest on HBL the deduction u/s 24B is fully allowed for the assessee, read with section 22 of the Act. The wife of the assessee is not an owner but a co-borrower. She is not eligible for claim of interest as per the Act. We direct the revenue to allow the balance deduction U/s 24, interest on HBL to assessee.
ITAT respectfully consider the order of Goetz India Ltd, supra. The catena of judgments is produced by the ld. Council before the Bench. The orders of the Hon’ble Delhi High Court & Hon’ble High Court of Bombay respectfully observed the order of Hon’ble Apex Court. Here, two issues are formulated, weather the unclaimed deduction can be claim before the assessing authority without filing the revised return and weather the power of the appellate authority can allow the claim of duction which was not claimed in the return of income. We adjudicate the second issue. In our opinion the appellate authority has coterminous power to accept the deduction which was not claimed in ITR. So, the entire claim under section 80C is eligible claim of deduction. During the hearing the assessee had submitted all relevant documents which are also considered by the appellate authority. We accept the claim of assessee related to deduction U/s 80C. We set aside the order of the ld CIT(A) with a direction to allow the deduction, claimed by the assessee.
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
The batch of instant appeals of the assessee was filed against the order of the ld. Commissioner of Income Tax (Appeals)-5, Ludhiana, [in brevity the CIT(A)] bearing Appeal No. 10179/CIT (A)-5/Ldh/2017-18 date of order 17.03.2022 order passed u/s 250 (6) of the Income Tax Act, 1961( in brevity the Act) for A.Ys. 2015-16 to 2018-19. The impugned orders were originated from the order of the ld. Joint Commissioner of Income Tax (OSD), Central Circle-1, Jalandhar, (in brevity the AO) the order passed u/s 153C read with section 144 of the Act, date of order 12.02.2021.As these are assessee’s own appeals involving common issues, they are being disposed of by this composite order. Facts, for convenience, are being taken ITA No.121/Asr/2022, for A.Y. 2018-19 as lead case.
2. The following grounds have been raised therein:
“1) That the Ld. CIT(A) has wrongly allowed only 50% of claim of interest on housing loan = Rs.l 17,327 x 50% =58,664 u/s 24(b), instead of 100% by holding that appellant’s wife is joint-holder in loan but further ignored that the property is on the name of appellant and appellant is only eligible u/s 24.
2) That the Ld. CIT(A) wrongly disallowed deduction u/s 80C for tuition fee and repayment of housing loan amounting to Rs. 19,440/- and Rs. 2996 /-respectively on the ground that no claim was made in the return but wrongly ignored his powers as appellate authority to allow the same and also took second ground that the source of payment not explained, but on other hand accepted the returned income, as well as not made any addition u/s 69 or 69A or 69B or otherwise as unexplained investment etc. and blown hot & cold.
3) That the Ld. CIT(A) wrongly directed the appellant to place the document of Rs. 17,770/- of life insurance premium paid on assessment record of A.O, as well as, wrongly directed the A.O to allow the claim u/s 80C after obtaining the relevant document and further wrongly ignored that he had the power himself only u/s 251(l)(a) and explanation to section 251 respectively, to determine the issue after examining the document(s) on record.”
2. The brief fact of the case is that the assessee filed return. The deduction was claimed u/s 80C amount of Rs.1,50,000/-. But the assessee was unable to claim the deduction of principal of loan and tuition fee of the assessee’s children u/s 80C. Also, the deduction of interest under house building loan (in brevity HBL) u/s 24 was also not claimed during the filing of return. During the assessment proceedings the assessment was completed u/s 144. The assessee challenged the orders of the ld. AO before the ld. CIT(A). The assessee applied under rule 46A of the Income Tax Rule, 1962 for admission of additional evidence during the appeal hearing. The for claim u/s 24 and for deduction section 80C which was not taken in the return which was prayed to consider during the appeal hearing. Only the deduction for HBL interest u/s 24 was allowed @50% of in the hands of the assessee. The other issues are remained untouched & upheld order of the ld. AO partly.
3. Aggrieved assessee filed appeal before us for judicious consideration.
4. During hearing before the ITAT, two basic points are agitated by the ld Counsel, before the ITAT. The assessee claimed u/s 80C amount of Rs.1,50,000/-as Life Insurance Premium but the other deduction like principal of HBL and the tuition fee was not claimed during the filing of return. Both the revenue authorities disallowed the assessee’s claim after a valid prayer. Another issue was agitated by the ld. Counsel of the assessee is that the assessee is himself owner of house property. The loan was taken in both the names of the assessee and his wife. The assessee’s wife is co-borrower of the loan. The certificate from bank related to payment of interest is enclosed in APB page no. 15. The ld. Counsel filed the sale deed related to proof of ownership of the property which is enclosed in APB pages 16 to 17. The assessee is a sole owner of the property according to section 22 of the Act, the assessee himself is eligible for deduction of HBL interest u/s 24 @100%. So, the division of interest of HBL in both the hands is uncalled for.
4.1 During the hearing ld. Counsel Mr. Tarun Bansal, vehemently argued and submitted that the assessee applied under rule 46A of Income Tax Rule 1962, for claim of deduction U/s 80C & 24. Also, the receipt of Life Insurance Premium amount of Rs.17,770/- is enclosed in APB page 19 which was not mentioned in return of income.
5. The ld. CIT DR vehemently argued and mention that the assessee was not eligible for any of the deduction as it was not claimed during the filing of return. The claim before the ld. AO can not be sustained without filing the revised return. He respectfully relied on Goetze (India) Ltd. v. CIT [2006] 284 ITR 3231 (SC).
6. The ld. Counsel for the assessee Mr. Tarun Bansal, argued and submitted that the deductions are claimed during the appeal hearing and ld. CIT(A). For, clear understanding the submission of the assessee before the ld CIT(A) is reproduced as below. The said appeal order page no. 2 para 3 is extracted as below:-
“3. During the course of appellate proceedings, the AR of the appellant submitted arguments as under:
“Sub: Written submission in the case of Sh. Ajay Sharma, Guru Sangam, Punjabi Bagh, Kapurthala -144601, Punjab. A.Y. 2018-19, PAN AOOPS3250C
Your Honour it is respectfully submitted as under:
1. That assessment in the case was framed on 12.02.2021 at income of Rs. 5,15,600 whereas the assessee as per computation of income showed it as follows:
