M/s M.M. Chhabra & SOngs (HUF), New Delhi v. ACIT, New Delhi

ITA 429/DEL/2010 | 2006-2007
Pronouncement Date: 30-07-2010 | Result: Allowed

Appeal Details

RSA Number 42920114 RSA 2010
Assessee PAN AAAHM8302D
Bench Delhi
Appeal Number ITA 429/DEL/2010
Duration Of Justice 5 month(s) 28 day(s)
Appellant M/s M.M. Chhabra & SOngs (HUF), New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-07-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 30-07-2010
Date Of Final Hearing 21-07-2010
Next Hearing Date 21-07-2010
Assessment Year 2006-2007
Appeal Filed On 01-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : E NEW DELHI BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER AND SHRI B.C. MEENA ACCOUNTANT MEMBER ITA NO.429/DEL/2010 (ASSESSMENT YEAR : 2006-07) M/S. M.M. CHHABRA & SONS (HUF) VS. ACIT CIRCLE 2 3 (1) B-19 PAMPOSH ENCLAVE NEW DELHI. NEW DELHI 110 048. (PAN : AAAHM8302D) (APPELLANT) (RESPONDENT) ASSESSEE BY : DR. RAKESH GUPTA ADVOCATE & MS. RANI ADVOCATE REVENUE BY : SMT. MONA MOHANTY DR O R D E R PER B.C. MEENA ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF THE ORDER OF THE CIT (APPEALS)-XXIII NEW DELHI DATED 4.12.2009 FOR THE ASSESSMENT YEAR 2006- 07. THE FOLLOWING GROUNDS OF APPEAL ARE TAKEN BY THE ASSESSEE : 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN NOT ALLOWING THE APPELLANT'S APPLICATION FILED UNDER RULE 46A OF THE INCOME TAX RULES 1962 FOR ADMISSION OF ADDITIONAL EVIDENC ES AND FURTHER ERRED IN NOT CONSIDERING THE EVIDENCES FILE D BEFORE HIM BEFORE ADJUDICATING THE APPEAL OF THE APPELLANT NOT WITHSTANDING THE FACT THAT THE LD. A.O. HAD MADE THE DISALLOWANC E WITHOUT CONFRONTING THE PRECISE QUERIES AND WITHOUT GRANTIN G ADEQUATE OPPORTUNITY. ITA NO.429/DEL/2010 2 2. THAT HAVING REGARD TO FACTS & CIRCUMSTANCES OF T HE CASE THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN NOT RE VERSING THE ACTION OF THE LD. A.O. IN DISALLOWING 'FINANCE CHAR GES' AMOUNTING TO RS.38 55 459/- BEING PART OF TOTAL EX PENSES DISALLOWED AGGREGATING TO RS.44 32 377/-. 3. THAT IN ANY VIEW OF THE MATTER THE LD. CIT(A) OU GHT TO HAVE CONSIDERED THAT THE LOAN OF ABOUT RS.4 CRORES HAVING BEEN RAISED FROM THE CORPORATION BANK FOR ACQUIRING THE PROPERTY AT 14E (GROUND FLOOR) CONNAUGHT PLACE NEW DELHI WHICH WAS LET OUT BY THE APPELLANT AND RENTAL INCOME HAD BEEN DEC LARED UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' THE ALTERNATE CLAIM OF THE APPELLANT WITH RESPECT TO THE DEDUCTION OF THE RELATED COST CHARGED UNDER THE HEAD 'FINANCE CHARGES' AMOUNTING TO RS.34 85 328 [RS.37 92 153 - RS 3 06 825] U/S 24 OF THE INCOME TAX ACT 1961 WAS FACTUALLY AND LEGALLY JUSTIFIED. 4. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN NOT ADJUDICATING THE ISSUE WITH REGARD TO DISALLOWANCE OF VARIOUS EXPENSES AMOUNTING TO RS.5 76 918/- (RS.44 32 377 - RS. 38 55 459) CLAIMED BY THE APPELLANT FOR CARRYING ON THE BUSINESS ACTIVITIES AND FURTHER ERRED IN NOT REVERS ING THE ACTION OF THE LD. A.O. IN MAKING THIS DISALLOWANCE BY RECO RDING INCORRECT FACTS AND FINDINGS. 5. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN NOT REVERSING THE ACTION OF THE LD. A.O. IN DISALLOWING THE ENTIR E EXPENSES DEBITED TO THE PROFIT & LOSS ACCOUNT INCLUDING DEP RECIATION OF RS.6 302 AGGREGATING TO RS.44 32 377/- ALLEGEDLY FO R THE REASON THAT THE EXPENSES HAD NOT BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS IN TERMS OF SECTION 37 (L) OF THE INCOME TAX ACT 1961 AND WERE NOT RELATED TO THE BU SINESS AND FURTHER ERRED IN NOT HOLDING ALL ADVERSE OBSERVATIO NS OF LD. A.O. AS CONTRARY TO LAW AND FACTS. 6. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER THE ORDER UNDER APPEAL IS BAD IN LAW AND IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE IN AS MUCH AS THE DISALLO WANCES MADE BY LD. A.O. WERE NOT DELETED BY LD. CIT(A) AND THER EFORE ITA NO.429/DEL/2010 3 ASSESSMENT ORDER AS WELL AS APPEAL ORDER PASSED BY LD. CIT(A) ARE NOT SUSTAINABLE ON VARIOUS LEGAL AND FACTUAL GR OUNDS. 7. THAT THE APPELLANT CRAVES THE LEAVE TO ADD MODI FY AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJU DICE TO EACH OTHER. 2. THE LEARNED AR FOR THE ASSESSEE SUBMITTED THAT T HE ASSESSEE CLAIMED DEDUCTION ON ACCOUNT OF FINANCE CHARGES AGAINST ITS BUSINESS INCOME WHICH WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROU ND THAT ASSESSEE HAS GIVEN INTEREST FREE LOANS TO OTHER PERSONS. THE AS SESSEE FILED APPEAL BEFORE THE CIT (A) AND TOOK TWO GROUNDS. LATER ON DURING THE APPELLATE PROCEEDINGS ASSESSEE RAISED A THIRD GROUND BY WAY OF ADDITIONAL GROUND TO THE EFFECT THAT FINANCE CHARGES TO THE TUNE OF RS.3 4 85 328/- WAS INTEREST ON THE BORROWED FUNDS USED FOR ACQUIRING THE LET OUT P ROPERTY AT 14/E GROUND FLOOR CONNAUGHT PLACE NEW DELHI. THEREFORE SUCH DEDUCTIONS ARE ALLOWABLE U/S 24 FROM INCOME FROM HOUSE PROPERTY. THE ADDITIONAL GROUND RAISED DURING THE APPELLATE PROCEEDINGS WAS ALSO DI SMISSED BY HOLDING THAT THE ADDITIONAL GROUND IS INTER-CONNECTED TO GROUND NO.1 WHEREIN THE DECISION HAS BEEN TAKEN AGAINST THE ASSESSEE THEREFORE THE DECISION IN RESPECT OF THE ADDITIONAL GROUND SHALL ALSO BE AGAINST THE ASSESSE E. 3. THE ASSESSEE RAISED THE ADDITIONAL GROUND CLAIMI NG DEDUCTION U/S 24 FOR THE FIRST TIME BEFORE THE CIT (A) AND ALSO MOVE D A PETITION FOR ADMITTING THE ADDITIONAL EVIDENCES TO SHOW THAT THE ACQUISITI ON OF THE PROPERTY WAS ITA NO.429/DEL/2010 4 MADE BY PAYMENT OF THE FUNDS INCLUDING THE BORROWED FUNDS. CIT (A) REJECTED THE ADMISSION OF ADDITIONAL EVIDENCE ON TH E BASIS THAT SUFFICIENT OPPORTUNITY WAS GIVEN TO THE ASSESSEE IN THE ASSESS MENT PROCEEDINGS. THEREFORE AS PER RULE 46A HE IS NOT ENTITLED TO S UBMIT ADDITIONAL EVIDENCES. HE FURTHER SUBMITTED THAT BEFORE THE ASSESSING OFFI CER THE ASSESSEE ALWAYS CLAIMED THAT THESE EXPENSES WERE TOWARDS THE BUSINE SS INCOME WHILE BEFORE THE CIT (A) THIS ISSUE IS RAISED BY WAY OF ADDITION AL GROUND. IT WAS CLAIMED AS INTEREST EXPENSES RELATED TO THE ACQUISITION OF PROPERTY WHICH HAD BEEN LET OUT AND THE SAME ARE ALLOWABLE U/S 24 OF INCOME-TA X ACT FROM THE INCOME OF HOUSE PROPERTY. THE CIT (A) HAD ADMITTED AND REJEC TED THIS GROUND. HOWEVER CIT (A) HAD NOT ADMITTED ADDITIONAL EVIDEN CES SUBMITTED BEFORE HIM RELATING TO THIS GROUND. THE CIT (A) HAS TAKEN A CONTRADICTORY POSITION AS ON THE ONE HAND HE HAS ADMITTED THE ADDITIONAL GROUND AND REJECTED THE SAME AND ON THE OTHER HAND HE HAS NOT ADMITTED THE ADDITIONAL EVIDENCES WHICH WERE VERY MUCH RELEVANT TO THE ADDITIONAL GRO UND. FILING OF THE ADDITIONAL EVIDENCES BECAME NECESSARY ON ACCOUNT OF ADDITIONAL GROUND TAKEN BY THE ASSESSEE BEFORE THE CIT (A). THEREFOR E THE CIT (A) WAS NOT JUSTIFIED IN REJECTING THE ASSESSEES CLAIM FOR SUB MITTING THE ADDITIONAL EVIDENCES. BY DOING SO HE HAS SLAMMED THE DOOR OF THE ASSESSEE IN MOVING THE FRESH EVIDENCES IN SUPPORT OF THE ADDITIONAL GR OUND TAKEN DURING APPELLATE PROCEEDINGS. SINCE THESE EVIDENCES GO TO THE ROOT OF THE MATTER TO ITA NO.429/DEL/2010 5 COMPUTE THE INCOME UNDER THE HEAD INCOME FROM HOUS E PROPERTY AS PER LAW HENCE THE CIT (A) WOULD HAVE ADMITTED AND CONS IDERED THESE ADDITIONAL EVIDENCES. HE ALSO RELIED ON THE FOLLOWING DECISIO NS :- (I) DWARIKA PRASAD VS. ITO 63 ITD 1 (PATNA); (II) RACHHPAL SINGH VS. ITO 94 ITD 79 (AMR.); AND (III) ELECTRA (JAIPUR) P. LTD. VS. INSPECTING ASSTT . COMMISSIONER 26 ITR 236 (DEL.). HE FURTHER SUBMITTED THAT IN THE REMAND REPORT THE ASSESSEE AVAILED THE OPPORTUNITIES PROVIDED BY THE ASSESSING OFFICER BUT THE CASE BEFORE THE ASSESSING OFFICER WAS ONLY DEDUCTION U/S 36(1)(III) AND NOT U/S 24 OF THE INCOME-TAX ACT. IN VIEW OF THIS FACT THE CIT (A) WAS NOT JUSTIFIED BY NOT ADMITTING THE ADDITIONAL EVIDENCE AS THE CIT (A) HA S CO-TERMINUS POWER WITH THE ASSESSING OFFICER. HE ALSO RELIED ON THE JUDGM ENT OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CHAMPA PROPERTIES (P) LIM ITED VS. CIT 166 ITR 367 WHERE IT IS HELD THAT AN ADDITIONAL GROUND MAY BE RAISED BY THE ASSESSEE IN RESPECT OF A MATTER WHICH HAS AN IMPACT ON THE T OTAL INCOME TO BE ASSESSED OR THE AMOUNT OF TAX DETERMINED. HE ALSO RELIED ON THE DECISION OF NEW INDIA LIFE INSURANCE COMPANY LTD. 31 ITR 844 WHERE HON'BLE HIGH COURT HELD THAT LEAVE TO URGE ANEW PLEA OR TO TAKE UP A N EW GROUND MAY BE IMPLIED AND THE VERY FACT THAT IT WAS TAKEN UP URGED AND C ONSIDERED MAY BE TAKEN TO SHOW THAT IT WAS FORMALLY GRANTED. IN VIEW OF THES E DECISIONS THE ASSESSEES ADDITIONAL GROUND WAS TAKEN UP URGED CONSIDERED A ND THUS ITA NO.429/DEL/2010 6 GRANTED/ADMITTED. HE ALSO RELIED ON THE HON'BLE KO LKATA HIGH COURT JUDGMENT OF UNION CORE COMPANY LIMITED VS. CIT 70 I TR 45 (CAL.) WHERE IT HAS BEEN HELD THAT POWER OF THE FIRST APPELLATE AUTHORITY TO ALLOW A CLAIM FOR DEDUCTION FOR THE FIRST TIME IN APPEAL EVEN THO UGH SUCH CLAIM WAS NOT MADE IN THE RETURN OR RAISED BEFORE THE ASSESSING O FFICER IS THERE. EVEN THE CBDT HAS DIRECTED THE OFFICERS OF THE DEPARTMENT TH AT THEY SHOULD ALLOW A DEDUCTION TO WHICH AN ASSESSEE IS ENTITLED WHERE IT HAS NOT BEEN EVEN CLAIMED. HE ALSO RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN CIT VS. KANPUR COAL SYNDICATE 53 ITR 225 (SC) WHERE IT HAS BEEN HELD THAT FIRST APPELLANT AUTHORITY HAS PLENARY POWERS IN DISPOSING OF AN APPEAL AND HE CAN DO WHAT ASSESSING OFFICER COULD DO. HE FURTHER SUB MITTED THAT THE POWERS OF FIRST APPELLATE AUTHORITY ARE CO-TERMINUS WITH THE ASSESSING OFFICER. THE FIRST APPELLATE AUTHORITY HAS ALL THE POWERS TO ADM IT ADDITIONAL GROUND WHICH EVEN NOT RAISED BEFORE THE ASSESSING OFFICER. THE APPELLATE AUTHORITY HAS ALL THE POWERS WHILE HEARING THE APPEAL AGAINST THE ORD ER OF THE SUBORDINATE AUTHORITIES WHICH THE ORIGINAL AUTHORITY MAY HAVE I N DECIDING THE QUESTION BEFORE IT SUBJECT TO THE RESTRICTIONS OR LIMITATION S AND HE VEHEMENTLY PRAYED THAT THE CIT (A) WAS NOT JUSTIFIED IN NOT ADMITTING THE ADDITIONAL EVIDENCES WHICH GO TO THE ROOT OF THE ISSUE TAKEN BY THE ASSE SSEE IN THE ADDITIONAL GROUND. ITA NO.429/DEL/2010 7 4. LD. DR RELIED ON THE ORDER OF CIT (A) IN RESPECT OF NOT ADMITTING THE ADDITIONAL EVIDENCE FILED BEFORE HIM. 5. AFTER HEARING BOTH THE SIDES WE FIND THAT THE A SSESSEE HAS TAKEN THE GROUND NO.3 DURING THE APPELLATE PROCEEDINGS BEFORE THE CIT (A) WHICH READS AS UNDER : 3. THAT IN ANY VIEW OF THE MATTER THE LOAN OF ABO UT RS.4 CRORES HAVING BEEN RAISED FROM THE CORPORATION BANK FOR ACQUIRING THE LET-OUT PROPERTY AT 14E (GROUND FLOOR ) CONNAUGHT PLACE NEW DELHI DEDUCTION OF THE RELATED COST CHAR GED UNDER THE HEAD FINANCE CHARGES AMOUNTING TO RS.34 85 32 8/- [OUT OF THE AGGREGATE INTEREST PAID TO BANK OF RS.37 92 153/-] OUGHT TO BE ALLOWED U/S 24 OF THE INCOME TAX ACT 1961 UN DER THE HEAD INCOME FROM HOUSE PROPERTY. CIT (A) HAD DISPOSED OF THIS GROUND BY HOLDING AS U NDER :- 12. ONCE THE PLEA FOR ADMITTING THE ADDITIONAL EVI DENCE IS REJECTED THE CASE OF THE ASSESSEE COLLAPSES. IN FA CT IT HAS NO CASE THEREAFTER. THE AO HAS CORRECTLY DRAWN AN ADV ERSE INFERENCE ONCE THE ASSESSEE HAS NOT PRODUCED THE DO CUMENTS REQUISITIONED. IN CIT V MOTOR GENERAL FINANCE LTD. [2002] 254 ITR 449 (DELHI) IT HAS BEEN HELD THAT WHERE THE AS SESSEE FAILS TO PRODUCE DOCUMENTS ADVERSE INFERENCE CAN BE DRAW N TO THE EFFECT THAT IF PRODUCED THEY WOULD HAVE GONE AGAINS T THE ASSESSEE IN TERMS OF SEC. 114 OF THE EVIDENCE ACT 1872. FOR THE SAKE OF CLARIFICATION IT IS MENTIONED THAT THIS CA SE HAD GONE TO THE SUPREME COURT WHEREIN THE APEX COURT IN 267 IT R 381 (SC) SENT BACK THE MATTER TO THE HIGH COURT AS CERT AIN FACTS HAD NOT BEEN CONSIDERED. HOWEVER THE APEX COURT DID NO T COMMENT UPON THE PRESUMPTION RAISED UNDER SECTION 1 14 OF THE EVIDENCE ACT. IN COOPER ENGINEERING LTD. V CIT [198 2] 135 ITR 597 (BOM) IT WAS HELD THAT WHERE DETAILS WERE NOT FURNISHED BY THE ASSESSEE THE CLAIM COULD BE DISAL LOWED ON THE GROUND THAT ASSESSEE HAD NOT ESTABLISHED THE EXPEND ITURE. AS SUCH THE ASSESSEE FAILS IN GROUND OF APPEAL NO. 1. AS GROUND OF ITA NO.429/DEL/2010 8 APPEAL NO. 3 IS INTER-CONNECTED TO GROUND OF APPEAL NO.1 THE DECISION WOULD HAVE TO BE MADE AGAINST THE ASSE SSEE AND IN FAVOUR OF THE REVENUE IN GROUND OF APPEAL NO.3 AS WELL. THUS THE CIT (A) REJECTED THE ADMISSION OF THE ADD ITIONAL EVIDENCES AND ALSO HELD THAT AFTER REJECTING THE ADDITIONAL EVIDE NCE THE ASSESSEE HAS NO CASE. THE ASSESSEE TOOK A STAND BEFORE THE ASSESSI NG OFFICER THAT EXPENSES DEBITED IN PROFIT AND LOSS ACCOUNT WERE RELATED TO THE BUSINESS. HE ALSO APPEALED BEFORE THE CIT (A) BY TAKING GROUND THAT T HESE EXPENSES WERE WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSES. LATE R ON ASSESSEE TOOK A GROUND THAT THE FINANCE CHARGES AMOUNTING TO RS.34 85 328/- WERE RELATED TO THE LOAN TAKEN FOR ACQUIRING THE LET OUT PROPERTY. HE ALSO SUBMITTED NEW EVIDENCES BEFORE HIM WHICH HE HAD NOT ADMITTED AND CONSIDERED WHILE DECIDING THE NEW GROUND TAKEN BY THE ASSESSEE. BEF ORE US IN GROUND NO.1 THE ASSESSEE HAS PLEADED THAT THE CIT (A) HAS ERRED ON FACTS AND LAW AND NOT ALLOWING THE ASSESSEES APPLICATION FILED UNDER RUL E 46A OF THE INCOME-TAX RULES 1962 FOR ADMISSION OF ADDITIONAL EVIDENCE AN D HAS ALSO PLEADED THAT THE CIT (A) HAS NOT CONSIDERED THE EVIDENCES FILED BEFORE HIM BEFORE ADJUDICATING THE APPEAL OF THE ASSESSEE. THE CIT ( A) HAD NOT ADMITTED THE ADDITIONAL EVIDENCES BY HOLDING THAT THE ASSESSEE H AS FAILED TO ESTABLISH THAT HIS CASE FALLS WITH ANY ONE OF THE FOLLOWING SITUAT IONS ENVISAGED UNDER RULE 46A OF INCOME-TAX RULES :- ITA NO.429/DEL/2010 9 (I) WHERE AN A.O. HAS EITHER REFUSED TO ADMIT EVIDE NCE WHICH HE OUGHT TO HAVE ADMITTED; OR (II) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIEN T CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPO N TO PRODUCE BY THE A.O.; OR (III) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIE NT CAUSE FROM PRODUCING BEFORE THE A.O. ANY EVIDENCE WHICH I S RELEVANT TO ANY GROUND OF APPEAL; OR (IV) WHERE THE A.O. HAS MADE THE ORDER APPEALED AGA INST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO ADDUCE EVI DENCE RELEVANT TO ANY GROUND OF APPEAL. HE HAS REQUISITIONED THE ASSESSMENT RECORDS AND REA CHED AT THE CONCLUSION THAT ASSESSEE FAILED TO ESTABLISH THAT HE WAS PREVE NTED BY SUFFICIENT CAUSE TO ADDUCE THESE EVIDENCES AT THE ASSESSMENT STAGE. TH E DATES OF OPPORTUNITIES PROVIDED BY ASSESSING OFFICER WERE FROM 23.7.2007 T O 28.11.2008. THUS FOR A CONSIDERABLE TIME THE ASSESSMENT PROCEEDINGS REMAINED IN ACTION. THE ASSESSEE WAS PROVIDED MANY OPPORTUNITIES AND IN NON E OF THE OPPORTUNITY THE ASSESSEE HAS COME FORWARD AND SUBMITTED THAT TH ESE FINANCE CHARGES WERE TOWARDS THE LOAN TAKEN FROM THE CORPORATION BANK FO R ACQUIRING THE PROPERTY WHICH HAS BEEN LET OUT. ASSESSEE HAD ALL TIME REMAINED ON THE STAND THAT THESE ARE BUSINESS EXPENSES AND THE SAME ARE WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSES. SUCH NON-SUSTAI NABLE STAND OF THE ASSESSEE HAS OBSTRUCTED IN REACHING AT THE CORRECT FACTS OF THE CASE AT THE LEVEL OF ASSESSING OFFICER. HE HAS NOT TAKEN THIS STAND BEFORE THE ASSESSING ITA NO.429/DEL/2010 10 OFFICER AT ANY OF THE STAGE. EVEN ON SPECIFIC SHOW -CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER REGARDING THE FINANCE CHARGES THE ASSESSEE HAS NOT COME CLEAN. HE HAD EVEN NOT SUBMITTED ANY DOCUMENT /EVIDENCE OR SUBMISSIONS STATING THE FACTS WHICH HE HAS TAKEN I N THE ADDITIONAL GROUND BEFORE THE CIT (A). ALL THE WAY THE ASSESSEE HAS T RIED TO JUSTIFY THAT THE FINANCE CHARGES PAID FOR BUSINESS PURPOSE AND INTER EST FREE LOAN GIVEN FOR COMMERCIAL EXPEDIENCY. DURING THE APPELLATE PROCEE DINGS THE ASSESSEE HAS CHANGED THE STAND BY TAKING THE ADDITIONAL GROUND T HAT THE LOAN RAISED FROM THE CORPORATION BANK FOR ACQUIRING THE LET OUT PROP ERTY AND THE SAME HAS BEEN DEBITED IN PROFIT & LOSS ACCOUNT UNDER THE HEA D FINANCE CHARGES AMOUNTING TO RS.34 85 328/- WHICH ARE ALLOWABLE U/S 24 OF THE INCOME-TAX ACT FROM THE INCOME UNDER THE HEAD INCOME FROM HO USE PROPERTY. WE WOULD ALSO LIKE TO MENTION THAT ASSESSEE HAD COMPLE TELY CHANGED HIS STAND IN RESPECT OF FINANCE CHARGES IN THIS ADDITIONAL GROUN D. ONE OF THE ASSESSEES STANDS DEFINITELY HAVE NO LEGS TO STAND. ASSESSEE S CLAIM THAT THE MONEY WAS BORROWED FOR ACQUIRING PROPERTY WHICH IS FETCHING R ENT NEEDS PROPER VERIFICATION AND INVESTIGATION. CIT (A) HAD ALL TH E POWERS AS OF ASSESSING OFFICER WHILE CONSIDERING THE APPEAL OF ASSESSEE. HE HAD POWER TO REDUCE/ENHANCE THE INCOME. IN SUCH CIRCUMSTANCES IN THE INTEREST OF JUSTICE AND EQUITY WE HOLD THAT THE CIT (A) SHOULD HAVE AD MITTED THE ADDITIONAL EVIDENCE AND THEN DISPOSE OF THE APPEAL OF THE ASSE SSEE. KEEPING THESE FACTS ITA NO.429/DEL/2010 11 IN VIEW WE SET ASIDE THE ORDER OF THE CIT (A) AND RESTORE THE APPEAL TO THE CIT (A) WITH THE DIRECTION TO ADMIT THE ADDITIONAL EVIDENCES WHICH WERE FILED BEFORE HIM AND DISPOSE OF THE CASE ON MERITS NO DOUBT AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. SIN CE WE ARE SETTING ASIDE THE ORDER OF CIT (A) TO DECIDE THE ISSUES ON MERITS DE NOVO WE ARE NOT ADJUDICATING ON THE OTHER GROUNDS RAISED IN THE APP EAL. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THE 30 TH DAY OF JULY 2010. SD/- SD/- (R.P. TOLANI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : THE 30 TH DAY OF JULY 2010 TS COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. CIT 4. CIT(A)-XXIII NEW DELHI. 5. DR ITAT. ASSTT.REGISTRAR ITAT NEW DELHI.