Interest on property allotment instalments qualifies as deductible borrowed capital interest under house property tax rules.

Interest paid on instalments for allotment of property was treated as interest on borrowed capital and, on that basis, was allowable as a deduction from income from house property under section 24(1)(vi) of the Income-tax Act, 1961. The Court followed its earlier ruling on the same point, which had accepted that the interest component of instalments paid to the allotting authority satisfied the deduction requirement. The Tribunal's allowance of the deduction was therefore consistent with binding precedent, and the assessee was held entitled to the deduction.

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Issues: Whether interest paid on instalments for allotment of property constituted interest on borrowed capital deductible from income from house property under section 24(1)(vi) of the Income-tax Act, 1961.

Analysis: The issue had already been decided by the Court in a prior case holding that the interest portion on instalments paid to the authority for property allotment was allowable as a deduction under section 24(1)(vi). The Tribunal's view granting the deduction was in conformity with that decision.

Conclusion: The question was answered in the affirmative and against the revenue, holding that the assessee was entitled to the deduction.

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