Income Tax Appellate Tribunal - Agra
Rajendra Bhalla, S/O Late Sh. Amarnath ... vs Assessee on 23 July, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL,
AGRA BENCH, AGRA
BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND
SHRI A.L. GEHLOT, ACCOUNTANT MEMBER
ITA No. 80/Agra/2013
Asstt. Year : 2007-08
Shri Rajendra Bhalla, vs. Income Tax Officer(Tech.)
S/o Lat Shri Amarnath Bhalla, Gwalior.
101-102, Shivam Apartment,
Kamleshwar Colony,
Jiwaji Ganj, Gwalior.
(PAN: ABEPB 9653 B)
(Appellant) (Respondent)
Appellant by : Shri Navin Gargh, Advocate
Respondent by : Shri S.D. Sharma, Sr. D.R.
Date of hearing : 23.07.2013
Date of pronouncement of order : 26.07.2013
ORDER
Per Bhavnesh Saini, J.M.:
This appeal by the assessee is directed against the order of ld. CIT(A), Gwalior dated 22.01.2013 for the assessment year 2007-08, challenging the addition of Rs.96,626/- on account of disallowance of interest paid to LIC Housing.
2. Briefly, the facts of the case are that the assessee filed return of income at Rs.3,30,871/-. The assessee stated before the AO that he does not maintain any 2 ITA No. 80/Agra/2013 books of account and return of income is filed under the provisions of section 44AF. The AO, however, rejected the book results u/s. 145(3) because no books of account were produced and made addition of Rs.2,63,610/-. The ld. CIT(A) deleted this addition because the assessee filed return of income u/s. 44AF of the IT Act. It was not explained as to how the clam of assessee was incorrect in any manner. The addition of Rs.2,63,610/- made to the business income of the assessee has been accordingly deleted.
3. The assessee in the profit and loss account further claimed deduction of Rs.96,626/- on account of interest paid to LIC of India. The loan was taken from LIC for house construction and the same property was also sold during the year under consideration. The AO, therefore, disallowed Rs.96,626/-. The ld. CIT(A) also noted that the loan was taken from LIC for residential house property, which has been sold during the year under consideration. The ld. CIT(A) also noted that the interest was paid by the assessee in respect of loan taken for construction/renovation of self-occupied personal residential property. Therefore, such claim is not maintainable against the business income. The appeal of the assessee on this ground was accordingly dismissed.
3 ITA No. 80/Agra/2013
4. The ld. counsel for the assessee referred to PB-13, which is trading and profit and loss account, in which the assessee made claim of deduction of interest paid to LIC and loan is shown in the balance sheet. He has admitted that return of income was filed u/s. 44AF of the IT Act. He has, however, submitted that since loan is shown in the balance sheet, therefore, interest is allowable deduction. On the other hand, the ld. DR relied upon the orders of the authorities below.
5. We have considered the rival submissions and do not find any merit in this ground of appeal of the assessee. The assessee admitted before the AO that no books of account have been maintained because the assessee is a retailer and return of income has been filed under the provision of section 44AF. This fact was also submitted before the ld. CIT(A). Therefore, the ld. CIT(A) deleted the addition on account of extra profit in a sum of Rs.2,63,610/-. Once the income is declared and estimated by the assessee as declared u/s. 44AF, the assessee would not be entitled for further deduction of interest from the income. Further, the profit and loss account and balance sheet maintained by the assessee without books of accounts cannot be relied upon in the assessment year under appeal. Therefore, the claim of ld. counsel for the assessee is rejected. The assessee has admittedly taken loan for renovation/construction of self occupied personal residential house property. Therefore, it has no connection with the business income of the assessee. The 4 ITA No. 80/Agra/2013 property was also sold during the year under consideration. The ld. counsel for the assessee admitted during the course of arguments that the house property against which the loan was taken was never used for the purpose of business of the assessee. Therefore, property being not used, any interest paid for such loan, could not be allowed as deduction. In this view of the matter, we do not find any merit in the appeal of the assessee. Same is accordingly dismissed.
6. In the result, the appeal of the assessee is dismissed.
Order pronounced in the open court.
Sd/- Sd/-
(A.L. GEHLOT) (BHAVNESH SAINI)
Accountant Member Judicial Member
*aks/-
Copy of the order forwarded to :
1. Appellant
2. Respondent
3. CIT(A), concerned By order
4. CIT, concerned
5. DR, ITAT, Agra
6. Guard file Sr. Private Secretary
True copy