Vijay Aggarwal v. Commissioner Of Income Tax, Central Gurgaon And Another

ITA No. 71 of 2015 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 71 of 2015 Date of Decision: 27.8.2015 Vijay Aggarwal ....Appellant. Versus Commissioner of Income Tax, Central Gurgaon and another ...Respondents. CORAM:-HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.HON'BLE MR. JUSTICE RAMENDRA JAIN. 1.Whether the Reporters of the local papers may be allowed to see the judgment? 2.To be referred to the Reporters or not? Yes 3.Whether the judgment should be reported in the Digest? PRESENT: Mr. Aman Bansal, Advocate for the assessee. Mr. Rajesh Sethi, Senior Standing counsel with Ms. Pridhi Jaswinder Sandhu, Advocate for the revenue. AJAY KUMAR MITTAL, J. 1.This order shall dispose of a bunch of five appeals bearingITA Nos. 71, 72, 75, 102 and 121 of 2015 as learned counsel for theparties are agreed that substantial questions of law as claimed by theassessee in all the appeals are similar whereas in ITA No. 72 of 2015relating to the assessment year 2007-08, an additional question hasbeen claimed relating to disallowance of expenditure amounting to` 2,50,000/- and in ITA No. 102 of 2015 for the assessment year 2010-11, an additional question has been claimed with regard to disallowanceon account of 89 liquor bottles held by the assessee. For brevity, the facts are being extracted from ITA No. 71 of 2015. 2.ITA No. 71 of 2015 has been filed by the assessee underSection 260A of the Income Tax Act, 1961 (in short “the Act”) against theorders dated 15.10.2014 (Annexure A-3) passed by the Income TaxAppellate Tribunal, Delhi Bench “A”, New Delhi (hereinafter referred toas “the Tribunal”) in ITA No. 307/Del/2013 for the assessment year 2006-07, dated 19.11.2012 (Annexure A-2) passed by respondent No.1 anddated 23.12.2011 (Annexure A-1) passed by respondent No.1, claimingthe following substantial questions of law:- (i)Whether in facts and circumstances of thepresent case, the Ld. Authorities have erred indisallowing the deduction u/s 24 & 80C of theIncome Tax Act, 1961?present case, the Ld. Authorities have erred indisallowing the deduction u/s 24 & 80C of theIncome Tax Act, 1961? (ii)Whether in facts and circumstances of thecase, the ld. Authorities below erred in actingonly on the basis of assumptions andpresumptions and after ignoring the wellreasoned material/evidence which was broughton record by the appellant/assessee?case, the ld. Authorities below erred in actingonly on the basis of assumptions andpresumptions and after ignoring the wellreasoned material/evidence which was broughton record by the appellant/assessee? (iii)Whether in facts and circumstances of thecase, the action of the authorities below, theimpugned orders are legally sustainable in theeyes of law?case, the action of the authorities below, theimpugned orders are legally sustainable in theeyes of law? 3.In ITA No. 72 of 2015 relating to the assessment year 2007-08, following additional question of law has been claimed:-08, following additional question of law has been claimed:- Whether the addition made by the Ld. Authoritiesbelow on the ground of expenses incurred on birthdayparty of grandson without any evidence on record andmere acting on presumptions is legal and justified?below on the ground of expenses incurred on birthdayparty of grandson without any evidence on record andmere acting on presumptions is legal and justified? 4.In ITA No. 102 of 2015 relating to the assessment year2010-11, following additional question of law has been claimed:-2010-11, following additional question of law has been claimed:- Whether act on the part of the authorities below tomake an addition on account of liquor bottles in thelack of any cogent evidence and acting onpresumptions is justified and legal? Whether the addition made by the Ld. Authoritiesbelow on the ground of expenses incurred on birthdayparty of grandson without any evidence on record andmere acting on presumptions is legal and justified?below on the ground of expenses incurred on birthdayparty of grandson without any evidence on record andmere acting on presumptions is legal and justified? 4.In ITA No. 102 of 2015 relating to the assessment year2010-11, following additional question of law has been claimed:-2010-11, following additional question of law has been claimed:- Whether act on the part of the authorities below tomake an addition on account of liquor bottles in thelack of any cogent evidence and acting onpresumptions is justified and legal? 5.Put shortly, the facts necessary for adjudication of thepresent appeal as narrated therein are that the assessee is theManaging Director of M/s Action Construction Equipment Limited andalso the Director of M/s ACE Steel Fab Private Limited. The search andseizure operation under Section 132(1) of the Act was conducted on6.11.2009 at the residential premises of the assessee at House No. 854,Sector 15-A, Faridabad. The assessee filed his return under Section139(1) of the Act and in response to the notice issued under Section153A of the Act, he again filed the return on 20.10.2010 declaring theincome at ` 1,12,73,778/-. Respondent No.2 vide assessment orderdated 23.12.2011 (Annexure A-1), inter alia, disallowed the deductionunder Sections 24 and 80C of the Act. Feeling aggrieved, the assesseefiled an appeal before the Commissioner of Income Tax (Appeals) [forbrevity “the CIT(A)”]. The CIT(A) vide order dated 19.11.2012 (AnnexureA-2) partly allowed the appeal. Still dissatisfied, the assessee filed anappeal before the Tribunal who vide order dated 15.10.2014 (AnnexureA-3) dismissed the appeal. Hence, the present appeal. 6.We have heard learned counsel for the parties. 7.The question which arises in these appeals is whether theassessee was entitled to deduction under Section 24(b) and 80C of theAct. 8.It would be expedient to reproduce Section 24(b) of the Actwhich reads thus:- “24.Income chargeable under the head “Incomefrom house property” shall be computed after makingthe following deductions, namely:- (a)XXXXXX (b)Where the property has been acquired,constructed, repaired, renewed or re-constructed withborrowed capital, the amount of any interest payableon such capital: Provided that in respect of property referred to in Sub-Section (2) of Section 23, the amount of deductionshall not exceed thirty thousand rupees. Provided further that where the property referred to inthe first proviso is acquired or constructed with capitalborrowed on or after the 1[st] day of April, 1999 andsuch acquisition or construction is completed withinthree years from the end of the financial year in whichcapital was borrowed the amount of deduction underthis clause shall not exceed one lakh fifty thousandrupees. Explanation: Where the property has been acquired orconstructed with borrowed capital, the interest, if anypayable on such capital borrowed for the period priorto the previous year in which the property has beenacquired or constructed, as reduced by any partthereof allowed as deduction under any otherprovision of this Act, shall be deducted under thisclause in equal installments for the said previous year and for each of the four immediately succeedingprevious years. Provided also that no deduction shall be made underthe second proviso unless the assessee furnishes acertificate from the person to whom any interest ispayable on the capital borrowed, specifying theamount of interest payable by the assessee for thepurchase of such acquisition or construction of theproperty or conversion of the whole or any part of thecapital borrowed which remains to be repaid as a newloan. and for each of the four immediately succeedingprevious years. Provided also that no deduction shall be made underthe second proviso unless the assessee furnishes acertificate from the person to whom any interest ispayable on the capital borrowed, specifying theamount of interest payable by the assessee for thepurchase of such acquisition or construction of theproperty or conversion of the whole or any part of thecapital borrowed which remains to be repaid as a newloan. Explanation: For the purposes of this proviso, theexpression “new loan” means the whole or any part ofa loan taken by the assessee subsequent to thecapital borrowed for the purpose of repayment of such capital.” 9.A plain reading of the above provision shows that anassessee is entitled to deduction on the amount of any interest payableon the capital borrowed for the purposes of acquiring, constructing,repairing, renewing or reconstructing the said property. In other words,the property is required to be acquired, constructed, repaired, renewedor reconstructed with the borrowed capital. It is concurrently recorded bythe authorities that the property was purchased by the assessee inNovember, 2005 whereas the loan was taken from ICICI Bank on31.12.2005. Thus, the loan was taken subsequent to the purchase ofthe property and cannot be said that the same was utilized for acquiringthe property. In such circumstances, the Assessing Officer, the CIT(A) ITA No. 71 of 2015-6- and the Tribunal were justified in declining the benefit of Section 24(b) ofthe Act. Equally, once it is held that the assessee had not borrowed anycapital for the purchase of the property, the assessee was not entitled toany deduction under Section 80C(1) read with 80C(2)(xviii) of the Act. 10.In view of the above, we find that it is a question of fact andthe authorities on appreciation of evidence had rightly declined the claimof the assessee for the deduction under Section 24(b) and 80C of theAct. Thus, no question of law as claimed arises. 11.Adverting to the additional claim of the assessee in ITA No.72 of 2015 on account of expenses incurred on birthday party ofgrandson, the Tribunal had partly allowed this claim by reducing theaddition from ` 5 lacs to ` 2.5 lacs. The findings recorded by theTribunal read thus:- “11.We have heard rival parties and have gonethrough the material placed on record. We find thatinvitation as placed in paper book page 82 is fromSaurabh and Nishu Aggarwal who are son anddaughter in law of the assessee. The A.O. has madewhole of the addition in the hands of the assesseewhich is not justified. Therefore, keeping in view allthe facts and circumstances we hold that the additionof Rs.2.50 Lacs will meet the ends of justice and inview of the above, ground No.5 in Assessment year2007-08 is partly allowed.” 12.The Tribunal had granted partial benefit to the assessee byholding that in the facts and circumstances only half of the amountshould be added in the hands of the assessee. This being finding of fact does not involve any question of law. 13.Similarly, in ITA No. 102 of 2015, the additional challengehas been laid to the addition of ` 2,22,500/- on account of 89 liquorbottles. The Tribunal had recorded that since the assessee was stayingin a joint family consisting of his son and daughter-in-law and all thebottles cannot be said to have been purchased in one year and theexistence of so many bottles can only point out to the fact that thesemust have been gathered over a period of time and, therefore, anaddition of ` 1 lac would meet the ends of justice. We do not find anyerror in the approach adopted by the Tribunal and, therefore, nointerference is called for by this Court. No legal principle is involved insuch adjudication. 14.In view of the above, no substantial question of law arises inthese appeals. Accordingly, finding no merit in these appeals, the sameare hereby dismissed. (AJAY KUMAR MITTAL) JUDGE August 27, 2015 gbs (RAMENDRA JAIN) 14.In view of the above, no substantial question of law arises inthese appeals. Accordingly, finding no merit in these appeals, the sameare hereby dismissed. (AJAY KUMAR MITTAL) JUDGE August 27, 2015 gbs (RAMENDRA JAIN) JUDGE ITA No. 71 of 2015 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 72 of 2015 Date of Decision: 27.8.2015 Vijay Aggarwal ....Appellant. Versus Commissioner of Income Tax, Central Gurgaon and another ...Respondents. CORAM:-HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.HON'BLE MR. JUSTICE RAMENDRA JAIN. PRESENT: Mr. Aman Bansal, Advocate for the assessee. Mr. Rajesh Sethi, Senior Standing counsel with Ms. Pridhi Jaswinder Sandhu, Advocate for the revenue. AJAY KUMAR MITTAL, J. For orders, see ITA No. 71 of 2015 (Vijay Aggarwal v. Commissioner of Income Tax, Central Gurgaon and another). (AJAY KUMAR MITTAL) JUDGE August 27, 2015gbs (RAMENDRA JAIN) JUDGE ITA No. 71 of 2015 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 75 of 2015 Date of Decision: 27.8.2015 Vijay Aggarwal ....Appellant. Versus Commissioner of Income Tax, Central Gurgaon and another ...Respondents. CORAM:-HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.HON'BLE MR. JUSTICE RAMENDRA JAIN. PRESENT: Mr. Aman Bansal, Advocate for the assessee. Mr. Rajesh Sethi, Senior Standing counsel with Ms. Pridhi Jaswinder Sandhu, Advocate for the revenue. AJAY KUMAR MITTAL, J. For orders, see ITA No. 71 of 2015 (Vijay Aggarwal v. Commissioner of Income Tax, Central Gurgaon and another). (AJAY KUMAR MITTAL) JUDGE August 27, 2015gbs (RAMENDRA JAIN) JUDGE ITA No. 71 of 2015 -10- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 102 of 2015 Date of Decision: 27.8.2015 Vijay Aggarwal ....Appellant. Versus Commissioner of Income Tax, Central Gurgaon and another ...Respondents. CORAM:-HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.HON'BLE MR. JUSTICE RAMENDRA JAIN. PRESENT: Mr. Aman Bansal, Advocate for the assessee. Mr. Rajesh Sethi, Senior Standing counsel with Ms. Pridhi Jaswinder Sandhu, Advocate for the revenue. AJAY KUMAR MITTAL, J. For orders, see ITA No. 71 of 2015 (Vijay Aggarwal v. Commissioner of Income Tax, Central Gurgaon and another). (AJAY KUMAR MITTAL) JUDGE August 27, 2015 gbs (RAMENDRA JAIN) JUDGE ITA No. 71 of 2015 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 121 of 2015 Date of Decision: 27.8.2015 Vijay Aggarwal ....Appellant. Versus Commissioner of Income Tax, Central Gurgaon and another ...Respondents. CORAM:-HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.HON'BLE MR. JUSTICE RAMENDRA JAIN. PRESENT: Mr. Aman Bansal, Advocate for the assessee. Mr. Rajesh Sethi, Senior Standing counsel with Ms. Pridhi Jaswinder Sandhu, Advocate for the revenue. AJAY KUMAR MITTAL, J. For orders, see ITA No. 71 of 2015 (Vijay Aggarwal v. Commissioner of Income Tax, Central Gurgaon and another). (AJAY KUMAR MITTAL) JUDGE August 27, 2015 gbs (RAMENDRA JAIN) JUDGE