TaxTMI 
TaxTMI 
2022 (5) TMI 42
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....nsidering the fact that new loan was taken from DCB with an intention to have lower rate of interest than the higher rate of interest charged by IBHFL. Therefore addition made is unjustified, unwarranted and excessive. 3. The learned Commissioner of Income Tax (Appeals)- 1, Nagpur erred in confirming addition of Rs. 1,12,37,579/- without considering the fact that nexus of housing loan were clearly established within the meaning of Section 24 of the Income Tax Act. Therefore addition made is unjustified, unwarranted and excessive. 4. The learned Commissioner of Income Tax (Appeals)- 1, Nagpur erred in not accepting loan taken from bank as housing loan and not accepting interest paid to DCB bank amounting to Rs. 1,12,37,579/-; Therefore addition made is unjustified, unwarranted and excessive. 5. The appellant seeks permission to add any other ground of appeal or amend or alter the aforesaid ground of appeal at the time of hearing of appeal." 3. The only issue that arose out of the aforesaid grounds of appeal by the assessee is, whether or not the learned CIT(A) was justified in in confirming addition of Rs. 1,12,37,579/- on account of disallowance made b....
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....s not found correct from perusal thereof. Further on 1.12.2007, the appellant has been sanctioned loan of Rs. 9.80 crore from the India Bulls Housing Finance Ltd. against the residential property being Flat no.3502, 3603 (A,B,C) / 3601, 36049 (A&B), 35th Floor, Hiranandani Gardens, Mumbai. As per the appellant, loan from development Credit Bank (DCB) have been taken for repayment of this housing loan, however, from the separate loan certificates dt. 2.12.2013 of DCB, it is specifically mentioned that the borrower namely the appellant and Mrs. Subra Subir Kumar Banerjee have jointly being granted business loan of Rs. 3,08,98,763, and Rs. 3,56,84,749. The certificates have also been issued as "Business Loan Interest Certificate". It is further seen that loan application no.029789 has been made by following, as mentioned in the letter dated 20.02.2010, of DCB:- i) Mr. S.K. Banerjee ii) Mrs. Surva Banerjee iii) M/s. SAS Developers and Engineers iv) M/s. SKB Constructions Pvt. Ltd. 4.1 The loan application has been made by the appellant along with his business concerns, the loan sanctioned is stated to be business loan by DCB and certificate ....
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.... interest. Section 24(b) of the Act is reproduced below:- "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)....... ^79(b) where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital:" 7. The learned Counsel further submitted that that the nomenclature of the loan does not effect the allowability of interest under section 24(b) of the Act. The learned Counsel further argued that on the basis of nomenclature of loans, the Assessing Officer as well as the learned CIT(A) has disallowed the interest without any justification and without any reason thereof. The learned Counsel further argued that the assessee had shown income under the head "Income From House Property". The assessee is also having business income had it been interest on business loan the assessee has right to claim it from business income and computed total income (loss) would have been the same. The learned Counsel further argued that there was a written ....
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....ents of the learned Counsel for the assessee, following case laws were relied upon:- i) M/s. Indraprastha Shelters Pvt. Ltd -Vs- DCIT [2021] 187 ITD 0306 (Bang-Trib); ii) CIT -Vs.- Devendra Bros. & Co. [1993] 200 ITR 0146 (All. HC); iii) DLF Emporio Limited -Vs- Deputy Commissioner of Income Tax ITA No. 5654/Del/2014 dated 30/08/2017; iv) ITO -Vs.- Makrupa Chemicals (P) Ltd. [2007] 108 ITD 0095 (ITAT Mum.); v) Shri Akulu Nagaraj Gupta Subbaraju -Vs- ITO vide ITA No. 2282 To 2286/Bang/2016 dated 31/08/2017; vi) Circular of CBDT dated 20/08/1969 vide Circular No. 028 instruction regarding Section-24(1); vii) DCIT, Cricle-8, Kolkata vs. M/s. Patton Developers Pvt. Ltd. Kolkata ITA No. 1043/Kol/2014 dated 01/03/2017; viii) M/s. Mfar Developers Pvt. Ltd. & Others vs. ACIT vide ITA No. 1649/Bang/2017 dated 24/04/2019. 8. Accordingly, the learned Counsel prayed that keeping in view the arguments made by him, appropriate relief be granted by allowing the grounds of appeal raised by him. 9. On the other hand, the learned Departmental Representative relied on the order of the authorities. 10. We have heard the r....
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.... on such capital" and in our view the Assessing Officer and the learned CIT(A) ought to have considered the claim of interest in lieu thereof. We further find that the ass has shown income under the head "Income From House Property" and the assessee is also deriving income from business and we agree with the argument of the learned Counsel that had it been interest on business loan the assessee has right to claim it from business income and computed total income (loss) would have been the same. There was a returned loss of Rs. 1,45,73,922 and the return of income was filed by the assessee after the due date and the loss was not allowed to carry forward to the subsequent year and the interest was claimed only because it was a housing loan interest which was duly paid by the assesse during the previous year relevant to the assessment year 2011-12. The aforesaid issue is also discussed and covered by the decision of the Co-ordinate Bench of the Tribunal, Bangalore Bench, in M/s. Indraprashta Shelters Pvt. Ltd. v/s DCIT, [2021] 187 ITD 306 (Bang.) cited by the learned Counsel, wherein it has been held as under:- "On perusal of the provision of section 24(b) it is clear that th....