Income Tax Appellate Tribunal - Lucknow
Sharda Prasad Tiwari,, Faizabad vs Assessee on 28 June, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
LUCKNOW BENCH "A", LUCKNOW
BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND
SHRI MEHAR SINGH, ACCOUNTANT MEMBER
ITA No.736/LKW/2011
Assessment Year:2007-08
Dr. Sharda Prasad Tiwari v. Income Tax Officer-I
T-1, Type-IV, New Professor Colony Faizabad
Dr. R.M.L. Avadh University
Faizabad
PAN:AAXPT2285R
(Appellant) (Respondent)
Appellant by: Dr. Sharda Prasad Tiwari (assessee)
Respondent by: Shri. R. K. Ram, D.R.
Date of hearing: 28.06.2012
Date of pronouncement: 06.07.2012
ORDER
PER SUNIL KUMAR YADAV:
This appeal is preferred by the assessee against the order of the ld. CIT(A) confirming the additions made on two accounts.
2. The first addition made was on account of disallowance of payment of interest of `58,192 claimed by the assessee on loan taken from H.D.F.C. for purchase of house property on the ground that it was not an inhabitable unit, therefore, deduction under section 24(1) of the Income- tax Act, 1961 (hereinafter called in short "the Act") cannot be allowed.
3. The other addition made was on account of disallowance of deduction claimed under section 80DD of the Act.
:-2-:
4. Having given a thoughtful consideration to the rival submissions and from a careful perusal of record, we find that the assessee has purchased a house from the funds borrowed from H.D.F.C. and claimed deduction of interest paid on the borrowed funds under section 24(1) of the Act and the Assessing Officer disallowed the claim of the assessee on the ground that the house in dispute was not completely constructed, therefore, deduction under section 24(1) of the Act cannot be allowed. The disallowance was also confirmed by the ld. CIT(A).
5. Before us, the ld. counsel for the assessee has submitted that the vendor has purchased the house from the Lucknow Development Authority (LDA) under Gomti Nagar Scheme in semi-finished condition, but later on it was completed and was sold to the assessee and thereafter it was used for residence. Therefore, it cannot be said that the assessee has purchased a semi-finished house, on which deduction under section 24(1) of the Act cannot be allowed. In support of his contention, the ld. counsel for the assessee has furnished a copy of the sale deed along with site plan and from their careful perusal, we find that the house under dispute was purchased by the vendor from the LDA with a liberty to construct the vacant portion. Since the constructed house was sold by the LDA to the vendor, it cannot be said that the house was not completely constructed. Moreover, the Revenue has not brought out anything in support of their stand that the house was not constructed and was not fit for residence. We, therefore, find no merit in the disallowance. Accordingly, we set aside the order of the ld. CIT(A) and direct the Assessing Officer to allow deduction of interest under section 24(1) of the Act.
6. So far as ground No.2 with regard to disallowance of deduction under section 80DD is concerned, the ld. counsel for the assessee has submitted that the medical expenditure claimed on the treatment of his 80 years old father was disallowed only for the reason that his father was :-3-:
having his own source of income. The ld. counsel for the assessee further submitted that except some cash balance in the bank account of assessee's father nothing was brought by the Revenue to substantiate that 80 years old father of the assessee was having his own source of income. Some cash balance in the bank account does not state anything about the earning of a person and moreover the cash balance in the bank account is not substantial amount which can be considered to be sufficient for the maintenance of the old parents. Therefore, we do not find any merit in the disallowance of the claim of deduction under section 80DD of the Act. We, therefore, set aside the order of the ld. CIT(A) on this issue and direct the A.O to allow the claim of deduction under section 80DD of the Act.
7. Since we have already allowed deduction of interest paid on borrowed funds, the other ground raised with regard to deduction under section 80C of the Act cannot be entertained. Accordingly, we dispose of this ground.
8. In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 6.7.2012.
Sd/- Sd/-
[MEHAR SINGH] [SUNIL KUMAR YADAV]
ACCOUNTANT MEMBER JUDICIAL MEMBER
DATED:6.7.2012
JJ:0507
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT(A)
4. CIT
5. DR
Assistant Registrar