TaxTMI 
TaxTMI 
2015 (2) TMI 443
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.... which is directed against the order of the learned Commissioner of Income-tax(Appeals) III, Hyderabad dated 20th November, 2012 for the assessment year 2008-09. Since the main issue involved in both these appeals is common, the same have been heard together and are being disposed off by a common consolidated order for the sake of convenience. Revenue's Appeal : ITA No.985/Hyd/2013 : Assessment year 2007-08 2. We shall first take up the appeal of the Revenue, being ITA No.985/Hyd/2013 for the assessment year 2007-08, which involves a solitary issue relating to disallowance of Rs. 69,05,482 made by the Assessing Officer on account of interest claimed by the assessee as deduction u/s. 24(b) of the Act, which is deleted by the CIT(A). 3. T....
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....ture deductible under S.24(b) under the head 'income from house property'. In this regard, the assessee was called upon by the Assessing Officer to prove the nexus between the construction activity and the fixed deposits mobilized. In the absence of any books of account maintained by the assessee or any other evidence produced in support, the Assessing Officer held that the assessee could not establish any direct nexus between the value addition made to the building and the fixed deposits mobilized. He therefore, disallowed the deductions claimed by the assessee under S.24(b) on account of interest paid on the loans taken from Punjab National Bank in the assessment completed under S.143(3) vide order dated 24.12.2009. 4. Against the order ....
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....ded that if the second borrowing has really been used merely to repay the original loan and this fact is proved to the satisfaction of the ITO, the interest paid on the second loan would also be allowed as a deduction under s.24(1)(vi)." Sec.24(1)(vii) (Presently section 24(b) provides that where the property has been acquired, constructed, repaired, renewed or constructed with borrowed capital, the amount of any interest payable on such capital shall be deducted form computation of income from house property. The only condition precedent for allowing deduction under Sec.24(b) is that there must be nexus between the interest paid and the property constructed/acquired. In the present case, as I could see, there is no denial by the Assessing....
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....sence of books of account maintained by the assessee or any other documentary evidence produced in support, the direct nexus between the value additions made to the building and the fixed deposits mobilized could not be established. He has contended that this adverse finding recorded by the Assessing Officer has been completely overlooked/ignored by the learned CIT(A), while allowing the claim of the assessee for deduction on account of interest under S.24(b) of the Act and this position clearly evident from the impugned order of the learned CIT(A) is not disputed by the learned counsel for the assessee. He however, has submitted hat all the fixed deposits were mobilised by the assessee during the respective earlier years when the construct....
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....o the file of the Assessing Officer for deciding the same afresh as per the same direction given for assessment year 2007-08. The relevant grounds of the assessee on this appeal are accordingly treated as allowed for statistical purposes. 9. The remaining issue in appeal of the assessee for assessment year 2008-09 as raised in ground No.4 relates to addition of Rs. 15,60,000 made by the Assessing Officer on account of cash deposit found to be made by the assessee in his bank account treating the same as unexplained, which is sustained by the learned CIT(A) to the extent of Rs. 1,56,000. 10. During the course of assessment proceedings, it was noticed by the Assessing Officer that the assessee has made a deposit of Rs. 15,60,00 in cash in h....