Joint housing-loan interest deduction must be apportioned equally among co-owners when shares are unspecified.

A jointly purchased property held in the names of four co-owners, with a housing loan also taken jointly, does not justify allowing the entire interest deduction to one co-owner where the deed does not specify separate shares and no evidence shows exclusive investment by that person. In the absence of proof of unequal beneficial interests, the co-owners are presumed to be equally interested in the property. Applying that principle, the interest on the housing loan under section 24(b) had to be apportioned equally among the four co-owners, so the assessee could claim only one-fourth of the total interest and the remaining disallowance was sustained.

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Issues: Whether the assessee was entitled to deduction under section 24(b) of the Income-tax Act, 1961 for the full amount of interest on a jointly taken housing loan, where the property was purchased in the names of four co-owners and the individual shares or separate contributions were not specified.

Analysis: The property was purchased by four persons and the housing loan was also obtained jointly by the same persons. The sale deed did not specify their respective shares, and no evidence was produced to show that the assessee alone had made the investment or that the others had no beneficial share in the property. Applying section 45 of the Transfer of Property Act, 1882, the absence of proof of separate shares or separate advances entitled the co-owners to be presumed equally interested in the property. On that basis, the housing-loan interest could not be allowed in full to the assessee alone and had to be apportioned equally among the four co-owners.

Conclusion: The restriction of the assessee's deduction to 25% of the total interest was upheld and the disallowance of the balance was sustained.

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