Tax Benefit not claimed in Return can be claimed during Assessment: ITAT directs AO re-consider Claim [Read Order]

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT), Mumbai bench has recently directed the Assessing Officer to consider a deduction claim which was not claimed by the assessee while filing returns.

Assessing Officer rejected the claim of the assessee for deduction under section 24(b) of the Act for the reason that the assessee claimed such deduction only by way of revised computation in the course of the assessment proceedings.

However, the claim of the assessee was entertained by the first appellate authority and observed that the deduction under section 24(b) of the Act can be disallowed only if the Assessing Officer gives a finding that the conditions mentioned in the Act are not followed or the property has not been acquired with borrowed capital or no interest is payable on such capital. He also held that since no such finding is given by the Assessing Officer, the Officer is not justified in not accepting the claim of the assessee u/s. 24(b) of the Act. Ld.CIT(A) also referred to the certificate issued by SBI in respect of interest paid on housing loan.

The Tribunal observed that the claim made by the assessee in the form of a letter and by way of revised computation of income in the course of the assessment proceedings was never entertained by the Assessing Officer.

“The Assessing Officer has not gone into the claim at all. Since the Assessing Officer has not gone into the claim of the assessee no finding was given on the claims made by the assessee. Therefore, the observations of the Ld.CIT(A) that since there is no adverse finding by the Assessing Officer, there is no justification in accepting the claim of the assessee is wrong. Since the Assessing Officer has not gone into the claim of the assessee, we are of the view that this matter has to go back to the Assessing Officer for proper verification of details of property acquired, rental income shown, loan borrowed for acquisition of property, interest paid on such loan etc., so as to satisfy that the condition u/s. 24(b) of the Act are complied for allowing such deduction. Thus, we restore the issue of deduction u/s. 24(b) of the Act to the file Assessing Officer for denovo consideration. The Assessing Officer shall provide an adequate opportunity of being heard to the assessee and adjudicate the issue in accordance with law,” the Tribunal said.