Tribunal overturns disallowance of house loan interest, emphasizing income consistency

The Tribunal allowed the appeal filed by the assessee, overturning the decisions of the AO and ld. CIT(A) regarding the disallowance of interest paid on the house loan. The Tribunal emphasized the consistency in the income chargeable under the head 'House Property' in the return and computation, supporting the assessee's position.

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Issues:
1. Validity of the order u/s 154 r.w.s 143(1) and notices
2. Disallowance of interest paid on house loan
3. Charging of interest u/s 234ABC

Issue 1: Validity of the order u/s 154 r.w.s 143(1) and notices:
The assessee, a salaried individual, filed a return of income for the assessment year 2018-19, which was processed u/s 143(1) determining total income at Rs.14,31,270/-. The AO added back Rs.1,56,556/- to the returned income under House Property Income. The assessee filed a rectification application which was rejected. The ld. CIT(A) dismissed the appeal, stating that there was no claim of interest payable on borrowed capital in the return filed. The appellant argued that the interest payable was mistakenly not reflected in the return but was part of the computation of total income. The Tribunal observed that the income chargeable under the head 'House Property' was the same at both places in the return, thus allowing the appeal.

Issue 2: Disallowance of interest paid on house loan:
The assessee argued that the interest paid on the house loan was wrongly disallowed by the AO and confirmed by the ld. CIT(A). The assessee contended that the interest claim was not reflected due to a technical error, but all calculations were present in the computation of total income. The Tribunal noted that the income chargeable under the head 'House Property' was consistent in the return and computation, supporting the assessee's claim. The Tribunal reversed the findings of the ld. CIT(A) and allowed the appeal.

Issue 3: Charging of interest u/s 234ABC:
As the Tribunal allowed the appeal on the disallowance of interest paid on the house loan, the consequential issue of charging interest u/s 234ABC became infructuous.

In conclusion, the Tribunal allowed the appeal filed by the assessee, overturning the decisions of the AO and ld. CIT(A) regarding the disallowance of interest paid on the house loan. The Tribunal emphasized the consistency in the income chargeable under the head 'House Property' in the return and computation, supporting the assessee's position.

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