PER: A.D. JAIN, J.M. These are the assessees appeals filed by the two different assessees for A.Y. 2011-12 against the order dated 09/02/2016 passed by the ld. CIT(A)-I, Jaipur, raising common issues. The facts, for convenience, are being taken from ITA No. 386/JP/2016. The assessee has taken following grounds in appeal: 1. That on the facts and in the circumstances of the case and in law, the ld. CIT(A) grossly erred in sustaining a disallowance of Rs. 1,06,099/- on account of deduction claimed U/s 24(b) of the Income Tax Act, 1961, thereby ignoring all the material evidences on record.

2. That on the facts and in the circumstances of the case and in law, the ld. CIT(A) grossly erred in sustaining disallowance of interest expenditure of Rs. 6,64,585/- claimed as deduction by the appellant from interest income under the head Income from other sources thereby ignoring all the material evidences on record.

3. That on the facts and in the circumstances of the case and in law, the ld. CIT(A) grossly erred in sustaining an addition of Rs. 25,000/- in the annual lettable value (ALV) of the property. Similar grounds have been taken in the other appeal of the other assessee. ITA 386 & 387/JP/2016_ Rajeev & Sons (HUF) Vs ITO 3

2. At the outset, the ld. Counsel for the assessee submits that he does not wish to press ground No. 3 of ITA No. 386/JP/2016, rejected as not pressed.

3. Apropos grounds No. 1 and 2 of the appeal, the facts are that the assessee HUFs, i.e., Rajeev & Sons HUF and Vinod Kumar & Sons HUF are the owners of a house property situated at 372, Nemi Sagar Colony, Vaishali Nagar, Jaipur. During the financial year 2006-07, a loan of Rs. 44 lacs was taken from ICICI bank. During the assessment proceedings for the assessment year under consideration, the Assessing Officer, observing that the loan had been sanctioned not in the name of HUF, but in the name of the Karta, disallowed interest U/s 24(b) of the Act. Interest expenditure claimed as deduction was also disallowed from interest income under the head income from other sources. The ld. CIT(A) confirmed the Assessing Officers action.

4. The ld. Counsel for the assessees has contended that, it had categorically been stated before the ld. CIT(A), that the loan had been taken by both the HUFs from Oriental Bank of Commerce; that installments with regard thereto were also paid by both the HUFs and deductions were claimed in their respective returns of income; that ITA 386 & 387/JP/2016_ Rajeev & Sons (HUF) Vs ITO 4 during the year under consideration, the housing loan was taken over and topped up by ICICI bank; that ICICI bank granted loan in the name of Vinod Kumar Bagla, whereas the existing housing loan from Oriental Bank of Commerce as well as the immovable property, which was mortgaged, was in the name of both the HUFs. The ld. Counsel for the assessee has stated that however, the ld. CIT(A) has passed the impugned orders without taking into consideration these specific submissions supported by documentary evidence, furnished before the ld. CIT(A).

5. The ld. SR.DR, on the other hand, has placed strong reliance on the impugned order.

6. I have heard the rival contentions of both the parties and have perused the material available on the record. The ld. CIT(A) has decided the matter against the assessees by holding as follows:-

(vii) It is held in ground No. 3 that the loan from ICICI Bank and ICICI Home Finance was taken by Sh. Vinod Kumar Bagla in his individual capacity. It is difficult to understand how the benefit of interest payment by Sh. Vinod Kumar Bagla to the ICICI group could be given to the appellant as it has failed to file any certificate from ICICI group regarding payment of ITA 386 & 387/JP/2016_ Rajeev & Sons (HUF) Vs ITO 5 interest by it. It is pertinent to mention that the loan by ICICI group was given directly to Sh. Vinod Kumar Bagla and not to the appellant HUF. The appellant HUF has failed to place on record any material which may even indicate that the interest to ICICI Bank was paid from its bank account No. 00612010059760 appearing at PB-171. (viii) In view of the above discussion, it is held that the AO was justified in disallowing interest of Rs. 6,64,585/-. Hence, the same is sustained.

7. It is seen that the written submissions filed by the assessee stand reproduced by the ld. CIT(A) at pages 6 to 112 of his order, which is as follows:

1. The appellant are HUF. Shri Rajeev Bagla is the karta of Rajeev & Sons HUF and Shri Vinod Bagla is the karta of Vinod Kumar & Sons HUF.

2. Shri Rajeev Bagla and Shri Vinod Kumar Bagla are real brothers. An immovable property at 372, Nemi Sagar Colony, Vaishali Marg, Jaipur was purchased by both the appellant HUFs (half share each) on 18.11.1998. Purchase Deeds in favor of the appellant HUFs have been furnished at paper book page no. 23 to 36. JDAs name transfer letter have been furnished at paper book page no. 37 to 38. Income-tax return along with computation and financial ITA 386 & 387/JP/2016_ Rajeev & Sons (HUF) Vs ITO 6 statements as on 31.03.2005, for the year preceding the year under consideration, depicting the said immovable property along with construction, housing loan and rental income have been furnished at paper book page no. 39 to 46.

3. Housing loan was taken by both the HUFs from Oriental Bank of Commerce (OBC). Installments were also paid by both the HUFs and deductions were claimed in their respective return of income. Loans statements and certificates issued by OBC in the name of both the HUFs have been furnished at paper book page no. 47 to 60.

4. During the year under appeal, the existing housing loan from OBC was taken over and topped up by ICICI Bank. ICICI bank granted the loan in the name of Shri Vinod Kumar Bagla whereas the existing housing loan from OBC as well as the immoveable property which was mortgaged was in the name of both the HUFs. Loan agreement with ICICI Bank is furnished at paper book page no. 61 to 108. Covering letter issued by ICICI to OBC enclosing outstanding loan cheques for takeover of loan have been furnished at paper book page no. 109 to 110. No dues certificate issued by OBC in the name of HUF have been furnished at paper book page no. 111 to 112. Acknowledgement for documents issued by ICICI for ITA 386 & 387/JP/2016_ Rajeev & Sons (HUF) Vs ITO 7 takeover of loan have been furnished at paper book page no. 113.

5. ICICI Loan statement have been furnished at paper book page no. 116 to 122. Copies of Income-tax returns and financial statements of the appellant HUFs for A. Y. 07-08 i.e. the year of takeover of loan by ICICI have been furnished at paper book page no. 123 to 130. The loan taken by ICICI bank was utilized as under :- Particulars Rajeev & Sons HUF Vinod Kumar & Sons HUF (A) For purchase of shares of Vinod Kumar & Brothers Pvt. Ltd. 10,50,000 10,50,000 (B) For repayment of housing loan 7,51,888 7,48,087 (C) For making loans & advances for earning interest income 25,98,112 26,01,913 Total 44,00,000 44,00,000

6. The Id. A. O. disallowed part interest on which interest income was not earned in the assessment orders u/s 143(3) for the A.Y. 2007-08, which have been furnished at paper book page no. 131 to 136. No appeal was preferred as the tax effect was nil. Interest expenditure incurred to earn interest income was allowed by the then Id. A.O. after due verification and was not disputed.

7. In A.Y. 2008-09, in the case of Rajeev & Sons HUF, the Id. A.O. disallowed the claim of housing loan interest to ICICI corresponding to the repayment of existing housing loan repaid to OBC in the assessment order u/s 143(3) which was allowed by the Id. CIT(A). Copy of return of income, ITA 386 & 387/JP/2016_ Rajeev & Sons (HUF) Vs ITO 8 financial statements, assessment order u/s 143(3) and CIT(A) order are furnished at paper book page no. 137 to

148. Interest expenditure incurred to earn interest income was allowed by the then Id. A.O. after due verification and was not disputed.

8. In A.Y. 2009-10, in the case of Rajeev & Sons HUF, the Id. A.O. accepted the entire claim of interest expenditure as well as rental income of the assessee u/s 143(3). Copy of return of income, financial statements and assessment order u/s 143(3) are furnished at paper book page no. 149 to 153.

9. In A.Y. 2012-13, in the case of both the HUFs, the Id. A.O. accepted the entire claim of interest expenditure as well as rental income u/s 143(3). Copy of return of income, financial statements and assessment orders u/s 143(3) are furnished at paper book page no. 154 to 168. A.O.s Findings & Conclusion : The Id. A.O. concluded that the loan from ICICI was taken in the name of Shri Vinod Kumar Bagla and not In the name of appellant HUFs viz. Rajeev & Sons HUF and Vinod Kumar & Sons HUF. He disallow the housing loan interest deduction claimed u/s 24(b) of the Income-tax Act, 1961 (page no. 3 & 4 of the assessment order). ITA 386 & 387/JP/2016_ Rajeev & Sons (HUF) Vs ITO 9 Appellants Humble Submissions: It is humbly submitted that the Id. A. O. grossly erred in appreciating the facts and circumstances of the case. For the sake of brevity, the brief facts stated above are not repeated once again here. It is submitted that from the brief facts stated above, it is amply evident that the loan from ICICI was actually and in substance granted to both the appellant HUFs viz. Rajeev & Sons HUF and Vinod Kumar & Sons HUF notwithstanding the fact that the loan statement contains the name of Shri Vinod Kumar Bagla. It may be due to the reason that banks in general do not grant property loan to HUFs. The loan from ICICI actually pertained to the appellant HUFs Is evident from the following documents:- S. No. Particulars Page Nos. 1 Purchase Deeds of house property in the name of HUFs 23 to 26 2 JDAs name transfer letter in the name of HUFs 37 to 38 3 Income-tax returns and financial statements of HUFs for F.Y. 2005-06 (A.Y. 06-07) 39 to 46 4 Oriental Bank of Commerce housing loan statements/certificates in the name of HUFs 47 to 60 5 ICICI Loan facility agreement signed by Karta and all coparceners of HUFs 61 to 108 6 Covering letter by ICICI to OBC enclosing outstanding loan cheques for takeover of loan 109 to 110 7 No dues certificate issued by OBS in the name of HUF 111 to 112 8 Acknowledgement for documents issued by ICICI for takeover of loan 113 9 Website printout of Allahabad Bank showing restriction on property loan to HUF 114 10 Website printout of Bank of India showing restriction on property loan to HUF 115 11 ICICI loan statements of Rs. 88 lakhs and Rs. 66 lakhs 116 to 122 ITA 386 & 387/JP/2016_ Rajeev & Sons (HUF) Vs ITO 10 12 Income-tax returns and financial statements of HUFs for F.Y. 2006-07 (A.Y. 07-08) 123 to 130 13 Assessment order U/s 143(3) of HUFs for F.Y. 2006-07 (A.Y. 07-08) 131 to 136 14 Income-tax returns and financial statements of Rajeev & Sons HUF (A.Y.08-09) 137 to 140 15 Assessment order U/s 143(3) of Rajeev & Sons HUF (A.Y. 08-09) 141 to 143 16 Ld. CIT(Appeals) order of Rajeev & Sons HUF (A.Y. 08-09) 144 to 148 17 Income-tax returns and financial statements of Rajeev & Sons HUF (A.Y. 09-10) 149 to 152 18 Assessment order U/s 143(3) of Rajeev & Sons HUF (A.Y. 09-10) 153 19 Income-tax returns and financial statements of Vinod Kumar & Sons HUF (A.Y. 12-13) 154 to 158 20 AOs Query letter dated 03/11/2014 U/s 143(2) of Vinod Kumar & Sons HUF (A.Y. 12- 13) 159 to 160 21 Assessment order U/s 143(3) of Vinod Kumar & Sons HUF (A.Y. 09-10) 161 22 Income-tax returns and financial statements of Rajeev & Sons HUF (A.Y. 12-13) 162 to 165 23 AOs Query letter dated 03/11/2014 U/s 143(2) of Rajeev & Sons HUF (A.Y. 12-13) 166 to 167 24 Assessment order U/s 143(3) of Rajeev & Sons HUF (A.Y. 12-13) 168 25 Name correction letter give to ICICI bank by appellants HUF 205 It is humbly submitted that from the above documents it is crystal clear as under:-

1. The immovable property was purchased by the HUFs.

2. In JDA records name of HUFs is appearing as owner.

3. Housing loan from Oriental Bank of Commerce was granted in the name of HUFs. ITA 386 & 387/JP/2016_ Rajeev & Sons (HUF) Vs ITO 11

4. In the balance sheet of HUFs the said property and housing loan is appearing.

5. Rental income and housing loan deduction is being enjoyed by HUFs.

6. ICICI Loan agreement was signed by Karta on behalf of HUFs as well as by all the coparceners of HUF.

7. Covering Letter issued by ICICI to OBC enclosing outstanding loan cheques for takeover of loan contains the name of HUFs.

8. The fresh loan from ICICI taken in the financial year 2006- 07 (A.Y. 07-08) had been incorporated in the financial statements of HUF for that period and consequently thereafter. The then Id. A.O. assessed that year u/s 143(2) and disallowed part of the interest expenditure to ICICI on which interest income was not earned by the appellants HUF. No appeal was preferred as the tax effect after the disallowance worked out to be NIL.

9. During A.Y. 2008-09, in the case of Rajeev & Sons HUF, the Id. A.O. disallowed housing loan interest to ICICI corresponding to the repayment of existing housing loan repaid to OBC in the assessment order u/s 143(3) which was allowed by the Id. CIT(A). ITA 386 & 387/JP/2016_ Rajeev & Sons (HUF) Vs ITO 12

10. In A.Y. 2009-10, in the case of Rajeev & Sons HUF, the Id. A.O. accepted the entire claim of the assessee u/s 143(3).

11. In A.Y. 2012-13, in the case of both the HUFs, the Id. A.O. accepted the entire claim of interest expenditure as well as rental income u/s 143(3). Hence, it is beyond doubt that the loan pertained to the appellant HUF. Merely, because ICICI has mentioned name of karta (Mr. Vinod Kumar Bagla) of one of the HUF in the loan statement, it does not mean that loan does not pertained to the HUFs. This is for the reason that banks find it difficult in granting property loans to HUF which is also evident from the web-site printout taken in case of two banks which is furnished at paper book page no. 114 to 115. Secondly, the appellant HUFs have utilized part of the loan for earning Interest income which have been claimed as deduction under the head income from other sources from the interest income earned from advances given to parties from the loan taken from ICICI which is also evident from the return of income filed and financial statements of the appellants HUF right from A.Y. 07-08 onwards. /As also discussed above, this claim of the appellant had been allowed by the department Itself in earlier years as well as subsequent assessment years under section 143(3) and the entire position was also explained to the Id. A.O. vide letters ITA 386 & 387/JP/2016_ Rajeev & Sons (HUF) Vs ITO 13 submitted which have been furnished at paper book page no. 207 to 216. In the aforesaid circumstances, it is most respectfully requested that the impugned disallowances of interest to ICICI claimed as housing loan interest deduction and deduction from interest income from advances, being illegal and unjustified and already accepted by department in earlier and subsequent years u/s 143(3), may kindly be deleted.

8. However, the ld. CIT(A) has upheld the assessment orders in stark oblivion of the aforesaid written submissions of the assessee, even though, neither the contents thereof, nor the documentary evidence filed in support of the submissions made therein, were dealt with by the ld. CIT(A). In fact, in the relevant portion of the orders, no reference whatsoever, of this written submissions, finds place.

9. The above is the position with regard to the appeals of both the assessees before us.

10. Therefore, the impugned orders are a result of complete misreading and non-reading of the written submissions and documentary evidence filed by the assessee before the ld. CIT(A). as such, grounds No. 1 and 2 in both these appeals are remanded to the file of the ld. ITA 386 & 387/JP/2016_ Rajeev & Sons (HUF) Vs ITO 14 CIT(A) to be decided afresh in accordance with law, on duly taking into consideration of the written submissions and documentary evidences filed by the assessee before him, the assessees, no doubt, shall be afforded due and adequate opportunity of hearing and they shall, no doubt, cooperate in fresh proceedings before the ld. CIT(A). All pleas available to the assessees under the law shall remain available to them.

11. In the result, both the appeals are treated as allowed, for statistical purposes. Order pronounced in the open court on 14/09/2016. Sd/- ,-Mh tSu (A.D. Jain) U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 14 th September, 2016 *Ranjan vknsk dh izfrfyfi vxzsfkr@Copy of the order forwarded to:

1. vihykFkhZ@The Appellant- Rajeev & Sons (HUF)/ Vinod Kumar & Sons (HUF), Jaipur.

2. izR;FkhZ@ The Respondent- The ITO, Ward-3(1), Jaipur

3. vk;dj vk;qDr@ CIT

4. vk;dj vk;qDr@ CIT(A)

5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur

6. xkMZ QkbZy@ Guard File (ITA No. 386 & 387/JP/2016) vknskkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar