Tribunal upholds interest claim on house property income, citing valid oral agreement and past practice.

The Tribunal upheld the Commissioner(A)'s decision to allow the claim of interest amounting to Rs. 31,734 from the income from the house property. The Tribunal found that there was a valid oral understanding between the parties to pay interest, supported by the husband showing the interest as income in his assessment. Previous instances of claiming and paying similar interest further strengthened the case. As there was no objection to the adjustment made by the Commissioner(A) in the interest calculation, the Tribunal dismissed the Revenue's appeal.

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Issues:
- Whether the claim of interest amounting to Rs. 31,734 from the income from the house property should be allowed.

Analysis:
The case involves an appeal by the Revenue regarding the allowance of interest claimed by the assessee from her husband on a loan taken for constructing a house. The Income Tax Officer (ITO) disallowed the claim stating that the loan was understood to be interest-free based on the assessee's previous declaration. However, the Commissioner(A) allowed the claim, noting changes in circumstances where the husband claimed interest which the assessee had to pay. The Tribunal found that the oral understanding between the parties to pay interest was valid and intended to be acted upon. The husband showing the interest as income in his assessment supported this. The Tribunal also highlighted that in a previous assessment year, similar interest was claimed and paid. The Tribunal concluded that the Commissioner(A) was justified in allowing the claim, especially as there was no objection to the adjustment made by the Commissioner(A) in the calculation of interest. Therefore, the Tribunal confirmed the Commissioner(A)'s order and dismissed the Revenue's appeal.

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