1992 (9) TMI 33

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....ance of the Revenue, the Income-tax Appellate Tribunal has referred the following question relating to the assessment years 1973-74 and 1974-75 to this court for its opinion : . "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally correct in allowing the interest paid on the loan of Rs. 1,50,000 as a deduction under section 24(1)(iv) of the ....

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....see, no involuntary charge could have been created within the meaning of section 24(1)(iv) of the Act. Since the charge was voluntarily created in the opinion of the Income-tax Officer, he rejected the claim of the assessee for deduction of interest. The Appellate Assistant Commissioner affirmed the view taken by the Income-tax Officer. On further appeal by the assessee, the Appellate Tribunal ....

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....within the meaning of section 24(1)(iv) of the Act. On the other hand, the submission of learned counsel for the assessee is that interest had to be paid by the assessee under the contract of loan and he has no option but to pay the interest as the loan had been taken by the assessee. The question for consideration is whether, on the facts as found by the authorities below, it can be said that the....

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....simple reason that the mortgage was not involuntary. This court further said that so long as the mortgage is voluntary, the interest paid thereon is not deductible under clause (iv). This court also pointed out that no one mortgaged his property except when he is in need of whatever kind, and on that account, it cannot be said to be an involuntary transaction. For these reasons, this court decided....