2024 (11) TMI 691
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....,942 Rs. 24,25,426) (Lc. after allowing the interest expenditure) and that too by recording incorrect facts and findings & without observing the principles of natural justice. 2. This in any case and in any view of the matter, action of the Ld CIT(A) is not deleting the entire addition of Rs. 59,47,942/- made by Ld. AO under the head "Income from other sources", is bad in law and against the facts and circumstances of the case, 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld A.O. in charging interest u/s 234B and 234C of the Income Tax Act. 4. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. 2. The brief facts of the case are that the assessee is an advocate by profession, in addition to carrying on business in his own name the assessee in also partner in M/s. Link Legal, carrying on the profession of advocate & solicitors. The return of income for A.Y. 2014-15 was filed by the assessee on 30.11.2024 declaring income at Rs 6501934/-. The case of assess....
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....mount received from Jaiprakash Associates Ltd. of Rs. 59,47,982/- and allowable u/s 57(iii) of the Act has been considered on the basis of the documents produced by the appellant regarding the repayment of interest to ICICI Bank on housing loan for the investment made in this property. The details of this are as under: - S.No. Period Amount (Rs. 1 01/04/2007 to 31/03/2008 1,66,048/- 2 01/04/2008 to 31/03/2009 7,05,400/- 3 01/04/2009 to 31/03/2010 6,44,707/- 4 01/04/2010 to 31/03/2011 6,32,813/- 5 01/04/2011 to 31/03/2012 2,76,458/- Total 24,25,426/- 6.6 In this light, the plea of the appellant has been considered in the light of the provisions of section 57 (ill) of the Act which is reproduced as under: - "57. The income chargeable under the head "Income from other sources" shall be computed after making the following deductions, namely (iii) any other expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose of making or earning such income;" In the light of the above, as the interest paid to ICICI Bank has a direct nexus with earning of this Interest income, the Assessi....
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....ttee within a particular time frame then the assessee-Board was liable to pay Interest to the allottees on the money received by it. It appears that there was delay in construction of the houses and thereafter the Housing Board paid interest at the agreed rate to the allottees in terms of the letter of allotment. The ITO (TDS) carried out a survey and found that the assessee had not deducted tax at source and he held that the amount paid by the assessee to the allottees was in the nature of Interest within the meaning of s. 2(28A) of the IT Act and in terms of s. 194A of the IT Act, tax had to be deducted at source. He decided the case accordingly. same to the allottees. It came to the conclusion that the interest was merely a convenient method to calculate the amount of compensation in order to standardize it. The Revenue filed an appeal against the said judgement, which was dismissed. Hence, this appeal. 4. To appreciate the rival contention of the parties, it would be appropriate to refer to the relevant portion of ss. 2(281) and 1948 of the IT Act, which read as follows: "Sec. 2(28A).-Interest means Interest payable in any manner in respect of any moneys borrowed or debt ....
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.... 194A of the Act tax at source had to be deducted by the Board. 7. In our view this judgement is not applicable to the facts of the present case. In the case before the High Court the assessee was a company engaged in retail finance services. It had assured the investors that if they invest money with the assessee company they would be refunded guaranteed repayment of amount Invested within 36 months at a minimum return of 1.5 percent. The return could be more than 1.5 percent but the company had promised that under no circumstance the return would be less than the guaranteed return of 1.5 percent. It was in this context that the Madras High Court held that what was paid by the company was interest and nothing else. There can be no dispute with the law laid down by the Madras High Court but the question which arises in the present case is whether the amount paid by the assessee is by way of interest or otherwise. 8. In the case in hand it stands proved that in case the houses were ready within the stipulated period the Board would not be liable to pay Interest. When construction of a house is delayed there can be escalation in the cost of construction. The allottee loses the ri....
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....ithin 39 months and the assessee has applied for cancellation of the allotment and the allotment was cancelled by the builders and the compensation was calculated by considering interest @12% per annum. The assessee has received the capital receipt of Rs 5947980/- from the Jaypee Greens Greater Noida. Perusal of the order of the Ld CIT(A) it reveals that the assessee has made the repayment of interest to ICICI Bank on housing loan for investment of property. In the ITA No. 5803/Del/2013 the coordinate bench has held that as under :- "9. In view of the above, the ratio laid down by the Hon'ble Himachal Pradesh High Court in the decision referred (supra) would squarely apply to the case of the assessee herein. Further, we find that the Hon'ble Calcutta High Court in the case of Principal Commissioner of Income Tax Vs. M/s. West Bengal Housing Infrastructure development Corporation Limited reported in 413 ITR 82 also had an occasion to look into the similar issue from the context of applicability of TDS provision on compensation paid by builder to the flat allottees for delayed. delivery of the flats in terms of section 194A of the Act. In this case also, the compensation wa....