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2014 (2) TMI 38 - AT - Income TaxInterest for the preconstruction period claimed – Claim of deduction u/s 24 of the Act – Held that:- For both the years under reference, while the income stood initially reduced by an amount, the same stood assessed at the returned income, on the ground that the assessed income could not fall below the returned income - the income as assessed is in terms of and in accordance with the law and, therefore, there is no basis for restricting the income to that returned; the assessee having claimed the entire interest for the preconstruction period in the year of completion of the relevant construction - Doing so would be in effect denying it the deduction u/s. 24(b) for the relevant years, to which it is entitled in law. The interest on the borrowed capital utilized for, construction for the preconstruction period is to be allowed in five equal installments beginning the year of the completion of construction – thus, the interest is allowable @ 1/5th as per the clear mandate of law - The assessee's claim for A.Y. 2006-07 in its respect is thus not maintainable in law – the matter has not been properly discussed - the disallowance of this interest is subject to the necessary confirmation by the AO while giving effect to this order – Decided partly in favour of Assessee.
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