ACIT, CHENNAI v. Shri Dr.Amar Agarwal, CHENNAI

IN THE INCOMETAX APPELLATE TRIBUNAL: C - BENCH:CHEN NAI (BEFORE SHRI ABRAHAM P. GEORGE. ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEM BER) ITA NO. 1565/ MDS/10 ASST. YEAR 2004-05 THE ACIT CO. CIR.1(4) CHENNAI VS. DR.AMAR AGARWAL 19 CATHEDRAL RD GOPALAPURAM CHENNAI 600086 PAN AADPA4514G (APPELLANT) (RESPONDENT) APPELLANT BY RESPONDENT BY: SHRI TAPAS KUMAR DUTTA CIT(DR) SHRI V.S. JAYAKUMAR ORDER PER SHRI ABRAHAM P.GEORGE A.M: IN THIS APPEAL FILED BY THE REVENUE DIRECTED AGAI NST THE ORDER DATED 11-06-2010 OF THE CIT(A)-III CHENNAI IT HAS RAISE D FOUR GROUNDS IN TOTAL OUT OF WHICH GROUNDS 1 AND 4 ARE GENERAL NEEDING NO ADJUDICATION. 2. VIDE ITS GROUND NO.2 GRIEVANCE OF THE REVENUE IS THAT THE CIT(A) ERRED IN ALLOWING A CLAIM OF INTEREST ON LOAN TAKEN FOR HOUSE PROPERTY WHEN ITA NO. 1565/MDS /10 2 SUCH CLAIM WAS MADE BY THE ASSESSEE ONLY THROUGH A REVISED COMPUTATION FILED DURING THE COURSE OF HEARING AND NOT THROUGH A REVISED RETURN. 3. SHORT FACTS APROPOS ARE THAT ASSESSEE AN OPHTHA LMIC SURGEON PRACTICING IN CHENNAI HAD FILED HIS RETURN FOR THE IMPUGNED ASST. YEAR ADMITTING A TOTAL INCOME OF ` 46 26 856/-. THERE WAS NO CLAIM WHATSOEVER MADE BY THE ASSESSEE IN THE RETURN FOR ALLOWANCE OF INTEREST PAID BY HIM ON THE HOUSING LOAN. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS ASSESSEE FILED A REVISED STATEMENT OF TOTAL INCOME WHICH INTER ALIA INCLUDED A CLAIM FOR ALLOWANCE OF INTEREST PAID ON HOUSING LOAN. THIS WAS NOT ALLOWED BY THE AO. ASSESSEE MOVED IN APPEAL BEF ORE THE CIT(A) WHO HELD THAT IF ANY INTEREST WAS PAID TOWARDS LOAN TAK EN FOR PURCHASE OF HOUSE PROPERTY IT HAD TO BE ALLOWED DURING THE YEAR IN W HICH PAYMENT WAS MADE IN VIEW OF SEC.24 OF THE INCOME-TAX ACT 1961 (THE ACT FOR SHORT). REVENUE MOVED IN APPEAL BEFORE THIS TRIBUNAL AND THIS TRIBU NAL VIDE ITS ORDER DATED 24-07-2009 IN ITA NO.30/MDS/09 REMITTED THE MATTER BACK TO THE FILE OF THE CIT(A) REQUIRING HIM TO REEXAMINE THE ISSUE CAREFU LLY IN THE LIGHT OF THE DECISION OF HONBLE APEX COURT IN THE CASE OF GOETZ E (INDIA) LTD. (184 ITR 323). PURSUANT TO SUCH DIRECTION CIT(A) RECONSIDER ED THE CLAIM OF THE ASSESSEE CONSIDERING THE DECISION OF HONBLE APEX COURT IN GOETZE (INDIA) LTD.S CASE (SUPRA). CIT(A) WAS OF THE OPIN ION THAT THE DECISION OF HONBLE APEX COURT IN GOETZE (INDIA) LTD.S CASE (S UPRA) WAS LIMITED TO ITA NO. 1565/MDS /10 3 POWERS OF THE AO IN CONSIDERING A CLAIM MADE OTHERW ISE THAN THROUGH A REVISED RETURN BUT DID NOT IN ANY WAY CIRCUMSCRIBE THE POWERS OF AN APPELLATE AUTHORITY IN THIS REGARD. RELIANCE WAS AL SO PLACED BY THE LD.CIT(A) ON THE DECISIONS OF HONBLE APEX COURT IN THE CASE OF NTPC LTD. V. CIT (229 ITR 383) AND JUTE CORPORATION OF INDIA V. CIT & ORS. (187 ITR 688) FOR TAKING THIS VIEW. CIT(A) NOTED THAT ASSESS EE COULD OBTAIN THE CERTIFICATE FROM ICICI HOME FINANCE REGARDING THE I NTEREST ONLY AFTER THE TIME OF ASSESSMENT AND HENCE COULD NOT HAVE MADE A CLAIM IN THE RETURN OF INCOME. HOLDING THAT HE HAD PLENARY POWERS TO AL LOW THE CLAIM OF THE ASSESSEE CIT(A) HELD THAT INTEREST OF `60 809/- TOWARDS LOAN TAKEN FOR HOUSE PROPERTY WAS TO BE GRANTED TO THE ASSESSEE. 4. NOW BEFORE US LD.DR STRONGLY ASSAILING THE ORDE R OF THE LD. CIT(A) SUBMITTED THAT ASSESSEE HAVING NOT MADE THE CLAIM IN THE RETURN OF INCOME AND HAVING NOT REVISED THE RETURN CIT(A) OU GHT NOT HAVE ACCEDED TO THE CLAIM. 5. PER CONTRA LD. DR SUPPORTED THE ORDER OF THE CI T(A). 6. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL S UBMISSIONS. DIRECTION OF THE TRIBUNAL IN THE FIRST ROUND OF PRO CEEDINGS WAS THAT THE CIT(A) CONSIDER THE CLAIM IN THE LIGHT OF THE DECIS ION OF THE HONBLE APEX COURT IN THE CASE OF GOETZ (INDIA) LTD. (SUPRA). CI T(A) AFTER GOING THROUGH ITA NO. 1565/MDS /10 4 THE DECISION IN THE AFORESAID CASE HELD THAT HIS PO WERS WERE NOT CIRCUMSCRIBED IN ANY WAY THROUGH THAT DECISION BUT HAD PLENARY POWERS TO CONSIDER ANY MATTER THAT WAS NOT CONSIDERED BY AO A T THE TIME OF ASSESSMENT. WE FIND THAT HONBLE APEX COURT IN GOET Z (INDIA) LTD. (SUPRA) HAD HELD THAT THE LIMITATION WITH REGARD TO ADMISS ION OF A CLAIM OTHERWISE THAN THROUGH A REVISED RETURN WAS ONLY VIS--VIS AN ASSESSING AUTHORITY AND IT NEVER IMPEACHED THE POWERS OF THE TRIBUNAL IN TH IS REGARD. HONBLE APEX COURT DID NOT CONSIDER OR GIVE ANY ADJUDICATION WI TH REGARD TO THE POWERS OF THE CIT(A) IN THIS REGARD. NEVERTHELESS IN THE CASE OF JUTE CORPORATION OF INDIA (SUPRA) IT WAS HELD BY THE HONBLE APEX CO URT THAT APPELLATE AUTHORITY WAS VESTED WITH ALL PLENARY POWERS WHICH SUBORDINATE AUTHORITY HAD IN THE MATTER. THUS THOUGH WE CANNOT FIND ANY L ACUNA IN THE ORDER OF THE CIT(A) GRANTING THE ALLOWANCE AFTER CONSIDERING THE DECISION OF HONBLE APEX COURT IN GOETZ (INDIA) LTD. CITED SUPRA NEVER THELESS WE FIND THAT LD. CIT(A) NEVER MADE A VERIFICATION OF THE CLAIM OF TH E ASSESSEE AND CORRECTNESS OF HIS CLAIM IN SUPPORT OF WHICH HE HA D PRODUCED CERTIFICATE FROM ICICI HOME FINANCE. WE ARE THEREFORE OF THE OPINION THAT THE MATTER NEEDS TO BE REVISITED BY THE AO FOR CONSIDERING CLA IM OF THE ASSESSEE. WE THEREFORE SET ASIDE THE ORDERS OF THE CIT(A) AND A O IN THIS REGARD AND REMIT THE MATTER BACK TO THE AO WITH A DIRECTION TO CONSIDER CORRECTNESS OF THE AMOUNT CLAIMED BY ASSESSEE AS INTEREST ON HOUSI NG LOAN. IT IS MADE CLEAR THAT THE MATTER IS REMITTED BACK FOR CONSIDER ING THE CORRECTNESS OF THE ITA NO. 1565/MDS /10 5 AMOUNT CLAIMED AND THE AO SHALL GIVE THE DEDUCTION TO THE ASSESSEE IF THE CLAIM IS FOUND TO BE CORRECT. GROUND 2 OF THE REVEN UE IS ALLOWED FOR THE LIMITED PURPOSE AS MENTIONED ABOVE. 7. GROUND NO.3 RAISED BY REVENUE IS ON THE DIRECTIO N OF THE CIT(A) ALLOWING DEDUCTION OF ` 2 65 013/- UNDER SEC.80QQB OF THE ACT AND ` 2 24 684/- UNDER SEC.80R OF THE ACT. THE ABOVE CLAI MS WERE ALSO NOT MADE BY ASSESSEE IN THE ORIGINAL RETURN OF INCOME WAS PUT B EFORE THE AO THROUGH A REVISED COMPUTATION. ASSESSEE NEVER FILED A REVISED RETURN. THIS CLAIM WAS ALSO NOT ALLOWED BY AO ONCE AGAIN RELYING ON THE DECISIO N OF HONBLE APEX COURT IN GOETZ (INDIA) LTD. (SUPRA). ASSESSEES APPEAL BEFOR E CIT(A) WAS INITIALLY ALLOWED BY HIM BUT ON DEPARTMENTAL APPEAL THIS TRIBUNAL VID E ITS ORDER DATED 24-07-2009 REFERRED SUPRA REMITTED THE MATTER BACK TO THE FIL E OF THE CIT(A) FOR CONSIDERATION AFRESH IN THE LIGHT OF THE DECISION OF HONBLE APEX COURT IN GOETZ (INDIA) LTD (SUPRA). 8. IN THE SECOND ROUND OF PROCEEDINGS LD. CIT(A) A CCEPTED THE CLAIM OF THE ASSESSEE. ACCORDING TO HIM INSOFAR AS DEDUCTIO N UNDER SEC. 80QQB WAS CONCERNED ASSESSEE HAD FILED NECESSARY CERTIFI CATE UNDER SEC.10CCD DATED 07-09-2006 FOR THE CLAIM OF ROYALTY RECEIVED FROM M/S JAYPEE BROS. MEDICAL PUBLICATION (P) LTD. NEW DELHI. INSOFAR AS THE CLAIM OF ASSESSEE UNDER SEC. 80R OF THE ACT WAS CONCERNED LD. CIT(A) NOTED THAT ASSESSEE HAD FILED A CERTIFICATE DATED 20-06-2006 FROM STATE BANK OF INDIA FOR FRI ITA NO. 1565/MDS /10 6 REMITTANCE TO THE TUNE OF ` 22 46 841/-. ACCORDING TO HIM EVEN THOUGH CLAIMS MADE BY THE ASSESSEE THOUGH REVISED COMPUTAT ION WAS RIGHTFULLY REJECTED BY AO USING HIS PLENARY POWERS HE COULD ALLOW THE CLAIM. FOR THE SAME REASONS AS GIVEN FOR GIVING ALLOWANCE OF INTE REST ON HOUSING LOAN CIT(A) ALLOWED THESE CLAIMS ALSO. 9. NOW BEFORE US LD. DR SUBMITTED THAT THE CIT(A) HAD NOT VERIFIED THE CORRECTNESS OF THE CLAIM UNDER SEC.80R OF THE ACT W ITH REGARD TO THE NATURE OF SERVICES RENDERED BY THE ASSESSEE. ACCORDING TO HIM ASSESSEE HAD NOT PRODUCED ANY EVIDENCE ON THESE ASPECTS AND CIT(A) H AD SIMPLY WENT BY T HE CLAIM OF ASSESSEE. 10. PER CONTRA LD. AR STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 11. WE HAVE CONSIDERED THE MATTER CAREFULLY. FOR TH E SAME REASONS AS WE HAVE MENTIONED WITH REGARD TO THE CLAIM OF ASSES SEE FOR INTEREST ON HOUSING LOAN WE ARE OF THE OPINION THAT THIS CLAIM ALSO REQUIRES A REVISIT BY THE AO. NO DOUBT ASSESSEE HAD MADE NO SUCH CLAIM B EFORE AO THROUGH A REVISED RETURN. BUT NEVERTHELESS ASSESSEE HAD PRES SED THIS CLAIM BEFORE THE CT(A) WHO EXERCISING HIS PLENARY POWERS HAD AL LOWED THE CLAIM. FOR THE SAME REASONS AS MENTIONED BY US AT PARA-6 ABOVE WE ARE OF THE OPINION THAT IT WAS WELL WITHIN THE POWERS OF THE L D. CIT(A) TO ADMIT THE CLAIM OF THE ASSESSEE. HOWEVER THE CORRECTNESS OF THE QUANTUM OF CLAIM ITA NO. 1565/MDS /10 7 WAS NOT VERIFIED BY HIM. AO HAD JUST REJECTED THE REVISED COMPUTATION RELYING ON THE DECISION IN THE CASE OF GOETZ (INDIA ) LTD. CITED SUPRA BUT DID NOT GO INTO THE CORRECTNESS OF THE CLAIM OF THE ASS ESSEE. HENCE WE ARE OF THE OPINION THAT THE MATTER NEEDS A REVISIT BY AO. WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND REMIT THE CLAIM OF THE ASSESSEE UNDER SECTIONS 80R AND 80QQB TO THE AO FOR FRESH CONSIDERATION. WE MAKE IT CLEAR THAT THE CLAIM HAS TO BE ALLOWED SUBJECT TO VERIFICATION OF THE CERTIFICATE AND CORRECTNESS OF THE AMOUNT CLAIMED BY ASSESSEE. GROU ND NO.3 OF THE REVENUE IS ALLOWED ON LINES MENTIONED ABOVE. 12. IN THE RESULT APPEAL OF THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 11 - 02-2011. SD/- SD/- (GEORGE MATHAN) JUDICIAL MEMBER (ABRAHAM P.GEORGE) ACCOUNTANT MEMBER CHENNAI: 11TH FEBRUARY 2011. NBR CC: ASSESSEE/ ASSESSING OFFICER/ CIT(A)/ CIT/ D .R/ GUARD FILE. ITA NO. 1565/MDS /10 8