Form 16 salary exemptions and home loan interest deductions sustained where employer and lender records supported the claims.

Salary exemptions reflected in Form 16 and supported by employer-certified records, including house rent allowance and related allowances, could not be disallowed in the absence of contrary evidence, so the reassessment addition was deleted. Home loan interest supported by the lender's certificate was also allowable as a deduction where the property was held as a house property asset and not the assessee's actual residence, so that disallowance was deleted as well. The reassessment additions relating to both claims were therefore removed in full.

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Issues: (i) Whether the assessee was entitled to exemption from salary income of Rs. 6,07,079 comprising house rent allowance and other salary-related exemptions reflected in Form 16; (ii) Whether the assessee was entitled to deduction of home loan interest of Rs. 1,55,185 in respect of the Goa property.

Issue (i): Whether the assessee was entitled to exemption from salary income of Rs. 6,07,079 comprising house rent allowance and other salary-related exemptions reflected in Form 16.

Analysis: The salary exemptions claimed by the assessee were supported by the employer's Form 16 and its annexure. The amounts towards transport allowance and leave salary formed part of the salary details certified by the employer. The house rent allowance claim was also reflected in Form 16. In the absence of any contrary material, the claimed exemptions could not be disallowed.

Conclusion: The disallowance of Rs. 6,07,079 was unsustainable and the issue was decided in favour of the assessee.

Issue (ii): Whether the assessee was entitled to deduction of home loan interest of Rs. 1,55,185 in respect of the Goa property.

Analysis: The interest payment was supported by the lender's certificate and was not disputed. The property was at Goa, while the assessee's place of employment was elsewhere, and the housing loan related to a property not used as the assessee's actual residence. On that basis, the interest was allowable as deduction under the head income from house property.

Conclusion: The deduction of Rs. 1,55,185 was allowable and the issue was decided in favour of the assessee.

Final Conclusion: The reassessment additions relating to salary exemptions and housing loan interest were deleted, and the appeal succeeded in full.

Ratio Decidendi: Where salary exemptions are duly reflected in Form 16 and supported by employer-certified records, and housing loan interest is substantiated by lender certification, the corresponding claims cannot be disallowed without contrary evidence.

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