TaxTMI 
TaxTMI 
2026 (7) TMI 875
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....red to as 'ld. CIT(A)', in short] dated 20.06.2025 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') dated 22.12.2017 by the Assessing Officer, ACIT, Circle-15(1), New Delhi (hereinafter referred to as 'ld. AO'). 3. The appeal in ITA No.5383/Mum/2025 for AY 2015-16, arises out of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as 'ld. CIT(A)', in short] dated 20.06.2025 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') dated 22.12.2017 by the Assessing Officer, DCIT, Circle-13(1), New Delhi (hereinafter referred to as 'ld. AO'). 4. The appeal in ITA No.5414/Mum/2025 for AY 2016-17, arises out of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as 'ld. CIT(A)', in short] dated 20.06.2025 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') dated 21.12.2018 by the Assessing Officer, ACIT, Circle-15(1), New Delhi (hereinafter referred to as 'ld. AO'). Identical issues are involved in all these appeals and as these are cross appeals,....
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....ew of huge loss existing for the assessee and that it would not make any difference for the assessee by shifting the head of income. The ld AR also submitted that in AY 2023-24, the ld AO himself had accepted the split between the rental income and maintenance charges income and had accepted to the treatment of the assessee in the scrutiny assessment proceedings. The ld AR also placed on record the copy of the coordinate bench decision of Delhi Tribunal in the case of LPR Company Pvt Ltd Vs. ACIT in ITA No. 2375/Del/2017 for AY 2012-13 dated 29.05.2023 wherein, the similar issue was adjudicated in favour of the assessee. Per contra, the ld DR vehemently relied on the orders of the lower authorities by taking the consistent stand of the revenue. 8. At the outset, we find that assessee had entered into 2 different agreements with the tenants i.e. one for letting out of property and other for providing maintenance services. We find that the assessee is in the business of leasing of property and also providing the maintenance, amenities, car parking and other incidental and ancillary services. Bifurcation of rental income and maintenance charges is clearly and fairly determinable pu....
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....., (1974) 95 ITR 419 (Cal). 6. Learned departmental representative strongly relied upon the observations of the Assessing Officer and learned Commissioner (Appeals). 7. We have considered rival submissions and perused the materials on record. It is observed, the assessee owns a property/building at 1-2 Aram Bagh, Community Centre, Panchkuian Road, New Delhi. It is observed, the first and second floor of the said building having super area of 2676 sq. ft. each have been leased out to M/s. Oriental Carbon & Chemicals Limited vide agreement executed on 17 December, 2007. On the very same day, the assessee has executed two separate agreements for the first and second floor of the same building towards maintenance and certain common facilities provided to the tenants such as lift from the main lobby to the leased out portion, uninterrupted power supply, provision for clean drinking water from water tank, access to staircase/landing, sufficient lighting arrangement, upkeeping the common area and common drainage, a generator set in running condition etc. For providing such facilities, the assessee received monthly service charges of Rs. 26,760/- for each floor. Thus, as ....
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....- u/s 24(b) of the Act on account of interest in the facts and circumstances of the instant case. 16. We have heard the rival submissions and perused the material available on record. The ld AO in page 5 of the assessment order mentioned that assessee had acquired building in question entirely from borrowed funds. In AY 2011-12, the assessee had repaid these funds by taking fresh loans. Thereafter, the ld AO noted that the rate of interest of in fresh loans are more than that prevailing in earlier loans. Accordingly, the ld AO allowed interest u/s 24(b) of the Act only at the rate at which the original loans were taken. We find that this issue is no longer res integra in view of the decision of this Tribunal in assessee's own case for AYs 2012-13 and 2013-14. We find that this Tribunal in AY 2013-14 in ITA No. 6155/Del/2017 dated 10.11.2023 had adjudicated the very same issue as under:- "2. The brief facts of the case as mentioned in the order of the Ld. CIT(A) are that the Assessee company is engaged in the business of renting of immovable property and rendering of amenities and maintenance services. During the year, the Assessee earned rental income and maintenance ch....
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.... Act, 1961. The background of the case is that the assessee had acquired the building under question entirely from the borrowed funds. The funds were borrowed at the rate of 10% p.a. However, in the AY 2011-12, the assessee company repaid these funds by taking fresh loans ranging from @10% to 16% rate of interest. It is not clearly established as to which money is attributable for acquisition of the property and which money to the other activities. The opening value of the property is 112,64,39,775/- and the assessee has claimed interest expenses of Rs. 13,93,95,296/- which comes to 12.37%. the original loan taken for the property, was at the rate of 10% which was repaid by taking loan at a higher rate. It is not out of place to mention here that in the assessment for the A.Y. 2011-2012 and 2012-13, the Assessing Officer has restricted the deduction u/s 24(b) to 10 % of the value of the property, primarily for the reason that the assessee could not establish the nexus of the funds borrowed for the second time to the property in question. The matter is sub-judiced with the CIT (A). Keeping all the above facts in view the assessee is allowed deduction u/ 24(b) to th....
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.... and on sanction of the loan of Rs. 139 crores from the Standard Chartered Bank in May, 2011, the loan account of ANR Securities has been repaid. It is understood that following foreclosure of the loan account of Standard Chartered Bank the outstanding loan of Rs. 55 crores of SCB was replaced by a loan from Today Holding on 13.05.2011 and replaced by the sanction and drawal of loan of Rs. 139 crores from the Standard Chartered Bank on 18.05.2011. It is further understood that the SCB loan totaling Rs. 74.70 crores was downsold to IDFC on 29.07.2011 and continued in the balance sheet till the end of the subsequent FY ending 31.03.2013. Undoubtedly, there have been many loan transactions, by way of replacement of loans taken with new loans, but nowhere it is seen that total Interest cost allocated or the loan amount utilized is more than the gross value of asset standing in the balance sheet. The loan amounts have been received and repaid to the appellant's bank accounts In Standard Chartered Bank and HDFC Bank and are entirely relatable. The cost of borrowing that has been claimed has been restricted to Rs. 114.34 crores that has been actually utilized in the building as well a....