TaxTMI 
TaxTMI 
2014 (4) TMI 428
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....rd and noticed that assessee has claimed interest on the borrowed amount of Rs. 3 crores stated to have been paid to another sister concern which, according to the CIT, is not allowable. 3. Facts leading to the opinion by the CIT are that assessee entered into an agreement on 1st April, 2001 with a developer/associate concern to construct and complete the construction of the proposed complex at premises bearing No.91, situated at Sarojini Road, Secunderabad. Since developer has to put in its own funds, ratio agreed between developer and owner was at 65 : 35. Subsequently, vide revised supplementary agreement dated 19.12.2002, the sharing ratio was changed to 50 : 50 between the developer and owner. Assessee had entered into lease agreement....
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....s has not been examined by the A.O." 3.1. Accordingly, the Ld. CIT set aside the order to further examine the allowability of claim of the assessee under section 24(b) of the Act. 4. Ld. Counsel referring to the paper books filed in this regard submitted that the observations of the CIT are not correct as the A.O. examined the issue of original deed as well as the revised deed and the fact of obtaining loan and paying to sister concern M/s. Salivahana Associates in the assessment proceedings for A.Y. 2005-06. He referred to the order of the same A.O. in A.Y. 2005-06 dated 31.12.2007 wherein A.O. had given a finding that the assessee's source of income was Income from House Property and Income from Long Term Capital Gains by virtue of ....
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....bare structure) by supplementary agreement dated 19th December, 2002. Thereafter, for finishing works, assessee agreed to pay 300 per sq. feet which worked out to Rs. 330 lakhs. This amount was paid to the developer which was accepted as a revenue receipt by M/s. Salivahana Associates. Since the assessee could not sell due to slump in the real estate market, the property was let out to M/s Secunderabad Hotels Pvt. Ltd. (which is part of Minerva Hotels Group) for a period of 10 years. Since the amount of Rs.330 lakhs to the developer was paid by availing loan of Rs.300 lakhs from UCO Bank Ltd. against future rents, the interest in respective years was claimed under section 24(b). These facts were duly furnished before the A.O. by their lette....
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.... given a finding that assessee owns 50% of the constructed area in the building. Not only that assessee also offered on income at 50% of the building, which was leased out, along with M/s. Salivahana Associates. Therefore, since assessee is owning the property of 50% of the share of the building and lease rent was also offered accordingly on the same area, finding by CIT that the supplementary agreement is not a real deed is not based on record. Just because assessee referred the original registered deed while leasing out the property, it does not mean that supplementary deed does not exist. Further for completion of the building, assessee paid an amount of Rs. 330 lahs out of which Rs. 300 lakhs was stated to be by way of loan from UCO Ban....