TaxTMI 
TaxTMI 
2026 (9) TMI 326
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....as 'ld. CIT(A)') under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'), arising out of the assessment order dated 28.09.2022 passed by the Assessment Unit, Income Tax Department, New Delhi for Assessment Year 2020-21. 2. The grounds of appeal raised by the assessee are as under: A. "The order passed by the Ld CIT(A) vis-à-vis substance of part disallowance made by the AO u/s 24(b) is bad in law and on facts. B. The Ld CIT(A) while sustaining the disallowance of Rs 44,77,708 has erred in ignoring the provisions of law relevant for the allowance of "interest" as defined under section 2(28A) of the Act. C. On the facts and under the circumstances of the case, the Ld.CIT(A) has....
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....Act-1961 and disallowance of Rs. 44,77,708/- claimed by assessee as interest expenses incurred by assessee on loan taken for acquiring commercial property at Noida. Against the additions made by AO, assessee filed an appeal before the CIT(A) who deleted the additions of 14A and sustained the disallowance of Rs. 44,77,708/- claimed by assessee under section 24(b), of the Act. 4. Now aggrieved assessee is in appeal before us. 5. Before us, ld. Counsel for the assessee submitted as under : "It is submitted that during the year under consideration the assessee has acquired a property at Noida from M/s Tech Info Private Limited for an amount 58,30,47,960/- and let out the same property to Kotak Mahindra bank. It is submitted that ....
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....ce fee or other charges also in respect of the money borrowed or debt incurred. 6. It is submitted that other charges paid by assessee are covered in definition of section 2(28A). And in the similar set of facts the Mumbai Bench of the ITAT in the case of Peepul Tree Properties (P.) Ltd.. V/s Assistant Commissioner of Income-tax reported in 160 ITD 138(Mum) decided in favour of assessee. The ld AR further relied on Pentagram Properties (P) Ltd. vs. Dy. CIT (ITA No. 3713/Mum/2010, dt. 12th Aug., 2011), Windermere Properties (P) Ltd. vs. Dy. CIT (2013) 155 TTJ (Mumbai) 1. (2013) 88 DTR (Mumbai) (Trb) 150 and CIT vs. Gujarat Guardian Ltd. (2009) 222 CTR (Del) 526: (2009) 19 DTR (Del) 75. 7. In view of the above it is submitte....
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....finition of "interest". We find that the provisions of section 24(b) provide for deduction of "interest" on borrowed capital, utilised for the purposes of acquiring, constructing, repairing, renewing or reconstructing the property. Interest has been defined in section 2(28A) as under: "interest" means interest payable in any manner in respect of any moneys borrowed or debt incurred. (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised." "Interest" thus, is defined in section 2(28A) in a wider manner to include any service fees or other charges. Only caveat i....
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....to the assessee It is not in dispute that interest paid on impugned loans was allowable under s. 24(b). Thus, the only issue to be decided is whether 'prepayment charges' and 'processing fee' shall form part of, the word 'interest' as used in s. 24(b). Perusal of definition of interest under s. 2(28A) shows that the term 'interest' has been defined in a manner giving it a wider scope. It clearly shows that the term 'interest' shall include any service fee or other charges in respect of moneys borrowed and it goes to the extent of saying that any charges in respect of any credit facilities which has not been utilized. The 'processing fee' charged by Axis Bank is nothing but service fee....