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2013 (8) TMI 103 - AT - Income TaxDeduction of Interest from income from house property - deduction u/s 24(b) - assessee contended that he has paid interest on borrowed capital for construction of house to City Bank of Rs.52,964/- which was related to pre-construction period. The assessee has claimed this interest as part of cost of construction and accordingly claimed in the return of income. It is further submitted that the interest expense related to pre-construction period either can be added to cost of construction or can be claimed 1/5th every year. - Held that:- the assessee is entitled for deduction u/s.24(b) of the Act. The AO directed to delete the addition - decided in favor of assessee. Exemption u/s 10(13A) - house rent allowance (HRA) - As per AO assessee and his wife are living together as a family. Therefore, it can be inferred that the house owned by wife of the assessee is occupied by the assessee also - Held that:- the requirement of the section is that any allowance (by whatever name called) granted to an assessee by his employer to meet expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the assessee, to such extent as may be prescribed. However, the exemption is not available in case the residential accommodation occupied by the assessee is owned by him or the assessee has not actually incurred expenditure on payment of rent (by whatever name called) in respect of the residential accommodation occupied by him. Assessee paid the rent - The assessee has fulfilled twin requirements of the provision, i.e. occupation of the house and the payment of rent. Under these circumstances, the assessee is entitled for exemption u/s.10(13A) of the Act. - Additions made by the AO deleted - decided in favor of assessee.
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