TaxTMI 
TaxTMI 
2022 (8) TMI 27
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.... On facts and circumstances of the case and in law, 1] The learned CIT(A) failed to appreciate the fact that - a. In order to arrive at actual rent as defined U/sec.23(1)(d) in case of let out property, expenditure incurred for earning such rent shall be deducted at threshold level itself. b. Principles of real income are ignored while denying deduction of interest paid by appellant for acquiring possession of property (i.e. Flat No.11, Breach Candy Garden, Mumbai) from statutory tenant. 2] The learned CIT(A) failed to appreciate that payment of consideration (with aid of borrowed funds) has direct nexus with acquisition of possession of impaired property from the statutory tenant. 3] The learne....
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....ontrol Act. The assessee entered into Agreement for relinquishing / surrendering tenancy rights with Mr.Homi Erani and Mrs.Aban Erani on 5/4/2011. The assessee claimed to have paid Rs.9,99,00,000/- to the tenant Mr.HomiErani & Mrs.Aban Erani as per the said Agreement for relinquishing/ surrendering Statutory tenancy and took possession of the impugned Flat No.11, Breach Candy Garden. It is important to mention here that the said agreement for relinquishing /surrendering statutory tenancy is unregistered and on a stamp paper of Rs.100/- only. The assessee claimed that she borrowed Rs.8,68,50,000/- from Reliance Home Finance to make the payment of Rs.9,99,00,000/-. However, as per the Loan Agreement which is reproduced in the assessment order....
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....ies. Studied the records. It is an admitted fact that the assessee had borrowed funds from Reliance Home Finance. In the said loan agreement in the, "property column", property mentioned is Flat No.12 and Garage No.12 G, Breach Candy Garden House, Mumbai. The same Flat No.12 and Garage No.12G has been mortgaged to Reliance Home Finance. However, the assessee has claimed deduction under section 24(b) for the property Flat No.11, Breach Candy Garden House Mumbai. Thus, the property appearing in the Loan Document and the property for which deduction u/s 24(b) is claimed are different. It is also observed that said Loan is classified as "TOP UP" Loan. The loan amount is Rs.9.1 crores but assessee had claimed that assessee had paid Rs.8,68,50,00....
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....e deducted under this clause in equal instalments for the said previous year and for each of the four immediately succeeding previous years:] ^27[Provided also that no deduction shall be made under the second proviso unless the assessee furnishes a certificate, from the person to whom any interest is payable on the capital borrowed, specifying the amount of interest payable by the assessee for the purpose of such acquisition or construction of the property, or, conversion of the whole or any part of the capital borrowed which remains to be repaid as a new loan. Explanation.-For the purposes of this proviso, the expression "new loan" means the whole or any part of a loan taken by the assessee subsequent to the capital borro....
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....refore, on this ground also the assessee is not eligible for deduction u/s.24(b) of the Act. Therefore, it is held that the assessee is not eligible for deduction u/s 24(b) of the Act. 8. The Hon'ble Punjab and Haryana High Court has held in the case of Vijay Agrawal Vs. CIT [2016] 65 taxmann.com 16 (Punjab & Haryana)/[2016]as under : Quote, " 9. A plain reading of the above provision shows that an assessee is entitled to deduction on the amount of any interest payable on the capital borrowed for the purposes of acquiring, constructing, repairing, renewing or reconstructing the said property. In other words, the property is required to be acquired, constructed, repaired, renewed or reconstructed with the borrowed capital. It is ....