TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 2233
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....while computing 'Income from House Property" without properly appreciating the facts of the case and law applicable thereto. 2. On the facts and in the circumstances, the Ld. CIT(A) failed to appreciate the fact that the interest of Rs. 18,70,675/- has been paid on loan/capital received from the partners which was utilized in acquisition/ construction of property or repayment. of loan utilized for acquisition/ construction of property, hence, should have been allowed. 3. On the facts and in the circumstances, the Ld. CIT(A) failed to appreciate that there is no bar in the law that interest paid on partners' capital which was utilized wholly and exclusively for acquisition! construction of property cannot be allowed as deduction ....
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....ution by the partners could not be taken into consideration for the purpose of computation of interest to be deducted u/s 24(b) of the Act. The assessee challenged the action of the AO before the CIT(A) but could not succeed. 5. Before us, ld. AR of the assessee has submitted that as per the Partnership Deed dated 1/4/2002, partners capital was increased to Rs. 4,50,000/- which was taken as partners fixed capital. He has referred to clauses 7 & 8 of the Partnership Deed and submitted that the Partnership Deed permits payment of interest at the rate of 12% per annum or such other ate as may be mutually agreed upon or at such rate not exceeding the rate as may be prescribed by the IT Act or other statutory provision shall be payable on the a....
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....he current capital balance of the partner is over and above the fixed capital contribution of the capital. There is no dispute that as per Partnership Deed dated 1/4/2002, payment of interest at the rate of 12% per annum on the amount standing to the credit of the capital account, loan account or current accounts of the partners is provided under clause 8 which reads as under: "8. Simple interest at the rate of 12% per annum or at such other rate as may be mutually agreed upon or at such rate not exceeding rate as may be prescribed by the Income Tax Act or such other statutory modifications or re-enactment thereof as may be in force from time to time, shall be payable on the amounts standing to the credit of Capital Account, Loan Accounts ....
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....and circumstances and the said decision of learned CIT(Appeals)d giving relief to the assessee has been upheld by the Tribunal vide its order dated 20111 April, 2010 passed in ITA No. 3216/Mum12009. As held by the Tribunal in the said order, the entire interest paid on the partners' capital was related to the premises which were let out by the assessee and the same, therefore, was allowable as deduction u/s 24(b) while computing income of the assessee under the head "Income from house property". Respectfully following the said decision of the Tribunal in assessee's own case for assessment year 2006-07, we direct the AO to allow the claim of the assessee for deduction on account of interest paid on partners' capital u/s 24(b)." ....
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.... in favour of the assessee in the similar facts and circumstances and the said decision of learned CIT(Appeals) giving relief to the assessee has been upheld by the Tribunal vide its order dated 20th April, 2010 passed in ITA No.3216/Murn/2009. As held by the Tribunal in the said order, the entire interest paid on the partners' capital was related to the premises which were let out by the assessee and the same, therefore, was allowable as deduction u/s 24(b) while computing income of the assessee under the head Income from house property". Respectfully following the said decision of the Tribunal in assessee's own case for assessment year 2006-07, we direct the AO to allow the claim of the assessee for deduction on account of interes....