TaxTMI 
TaxTMI 
TaxTMI 
2014 (2) TMI 38
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.... ('the Act' hereinafter) for the relevant years vide orders dated 24.06.2011. 2.1 Opening the arguments for and on behalf of the assessee, it was explained by the ld. AR, the assessee's counsel, that the only issue arising in the instant appeals by the assessee is the restriction of the total income by the Assessing officer (A.O.) to that as returned by the assessee for the relevant years on the ground that the same could not be assessed at an amount/s below that returned. Placing the assessment orders for A.Y. 1999-2000 & 2000-01 and that by the Tribunal for A.Y. 2001-02 (in ITA No.7679/Mum/2004 dated 19.01.2009) on record, it was further submitted by him that the difference to the returned income arises on account of allowance of interes....
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....time admitting the assessee's claim for being allowed the same in five equal installments beginning with the year of completion of the construction of the relevant house property, in terms of Explanation to section 24(b) of the Act. This position is undisputed, and toward which the assessee has placed on record the assessment orders for A.Ys. 1999-2000 and 2000-01 in respect of one component of interest, i.e., Rs.2,11,320/-, and the order by the tribunal for A.Y. 2001-02 for the other limb of such interest, i.e., qua a separate construction (at Rs.1,23,625/-). Accordingly, for both the years under reference, while the income stood initially reduced by an amount of Rs.3,34,945/- (Rs.2,11,320 + Rs.1,23,625), the same stood assessed at the ret....
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.... and not sustainable, at least wholly. The law, vide Explanation to section 24(b), reading as under, is plain and unambiguous:- "Deductions from income from house property. 24. Income chargeable under the head "Income from house property" shall be computed after making the following deductions, namely:-- (a) a sum equal to thirty per cent of the annual value; (b) where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital: Provided that ......... Provided further ......... Explanation.--Where the property has been acquired or constructed with borrowed capital, the interest, if any, payable on such capital borrowed for the period prior ....
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....s respect is, therefore, inconsistent with and, accordingly, not maintainable in law. To be fair though; the matter having not been raised during hearing, we confirm the disallowance of this interest subject to the necessary confirmation by the AO while giving effect to this order. Accordingly, the disallowance would not survive only if found to be falling within the parameters of s. 24(b), in which case the AO shall also clarify per his consequential order as to how the assessments for asstt. years 1999-00 & 2000-01 are linked with that for the current years, being apart by over five years, qua interest falling under Explanation to s. 24(b), as admitted to by the assessee. We decide accordingly. Before parting, we may clarify that our rea....