Full News
ITAT held that disallowance cannot be a subject matter u/s 154 (of Income Tax Act, 1961)
ITAT held that disallowance cannot be a subject matter u/s 154 (of Income Tax Act, 1961)
Assessee filed her return of income, and assessment was completed. AO made addition of Rs.4,206 as short term capital gain not offered to tax. AO disallowed claim u/s 80E (of Income Tax Act, 1961) on interest expense incurred on assessee's major son's education, and rectified the assessment order. CIT(A) upheld AO's order. ITAT allowed assessee's appeal, and held that disallowance cannot be a subject matter u/s 154 (of Income Tax Act, 1961), as assessee has filed Form 16, and shown a deduction.-501436
1. The assessee filed her return of income declaring total income at Rs.6,22,660/-. The assessment was finalized under section 143(3) (of Income Tax Act, 1961). The total income of the assessee was assessed at Rs.6,26,860/-. The AO made addition of Rs.4,206/- being short term capital gain not offered to tax. The AO, thereafter, issued a notice under section 154 (of Income Tax Act, 1961). This notice was issued through speed post, which was returned to the department un-served. The AO observed that the assessee has made a claim of Rs.31,959/- under section 80E (of Income Tax Act, 1961), for incurring interest expense on the loan taken for the purpose of education for himself/herself or for their relatives. The ld.AO has observed that the education loan was taken by the married major son of the assessee, and therefore, cannot claim interest under section 80E (of Income Tax Act, 1961). The AO rectified the assessment order under section 143(3) (of Income Tax Act, 1961). He disallowed a sum of Rs.39,959/- and determined taxable income of the assessee at Rs.6,58,820 as against Rs.6,26,861/- determined in the scrutiny assessment.
2. CIT(A) upheld the order of the AO.
3. On appeal, the ITAT held as under:
4. In the present case, before carrying out rectification as suggested by the AO one has to decide the nature of loan, who has taken the loan etc. It will require long drawn process of hearing. It is a debatable question. The assessee annexed form no.16 along with her return and shown the deduction under section 80E (of Income Tax Act, 1961). This step must have been taken by the designated employer or by the assessee after due consideration of section 80E (of Income Tax Act, 1961) and loan documentation. Such stand can be dispelled after perusal of the loan documents and other details. It cannot be a subject matter of proceedings under section 154 (of Income Tax Act, 1961). Therefore, we allow the appeal of the assessee and delete the disallowance.
5. In the result, the appeal of the assessee is allowed.”
Case Reference- Smt.Vandana Manoj Shah Vs. ITO
IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ ITA.No.3100/Ahd/2015 /Asstt. Year: 2011-2012
×
