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2020 (7) TMI 565 - AT - Income TaxAddition on account of deduction of interest expenditure u/s 24 (b) - whether interest was paid on loan which was meant for investment in shares and bonds and not for the purpose of purchasing the property - grievance of the assessing officer is that that above interest expenditure cannot be granted as deduction from income from house property - HELD THAT:- In the previous year has reached at a finding that until the amount has been utilized in the investment of bonds et cetera, no interest can be claimed by the assessee as deduction under the income from house property. However when such bonds have been redeemed and utilized for the purpose of purchase of the property, then the borrowed fund from HSBC bank amounts to utilization of same for the purpose of purchase of the property. As held that since the amount was purchased from the borrowed funds of the HSBC bank, interest paid by the assessee should be allowed as a deduction. The above facts are not disputed by the revenue. Even it was not shown to us that the order of the learned CIT – A for assessment year 2011 – 12 has not been accepted by the revenue and is agitated before the higher forum. In view of this, we do not find any infirmity in the order of the learned CIT – A in directing the learned assessing officer to ascertain the interest on funds utilized for acquisition of the property on which rental income has been earned by it during the year and to grant deduction of such interest under section 24 (b) - Decided against revenue. Disallowance u/s 14A read with Rule 8D - CIT- A directed the learned AO to restrict the disallowance to the extent of the exempt income earned - HELD THAT:- CIT-A's direction are in view of the decision of JOINT INVESTMENTS PRIVATE LIMITED VERSUS CIT [2015 (3) TMI 155 - DELHI HIGH COURT]. Also further directed AO to recompute the disallowance to exclude the interest expenditure, which pertains to the income from house property and in respect of the interest expenditure related to the income from other sources - Consider the remaining interest expenditure for the purpose of computation of the disallowance. With respect to the disallowance of 0.5% of the average value of the investment, he directed the learned assessing officer to consider only those bonds, which yielded tax-free income. After hearing the parties on this issues, we do not find any infirmity in the order of the learned CIT – A in directing the AO so. As CIT – A has followed the order of his predecessor and honourable Delhi High Court. The revenue has not challenged the order of the learned CIT – A for assessment year 2011 – 12, at least as no evidences produced before us. In view of this, we do not find any infirmity in the order of the learned CIT – A. Accordingly ground number two and three of the appeal of the AO is dismissed. Addition on account of various business expenses claimed - HELD THAT:- On careful analysis of the order of the learned CIT – A, we found that he relied on the order of his predecessor for assessment year 2011 – 12 wherein all the facets of the allowability of those expenditure have been considered and disallowance has been deleted. We also do not find any infirmity in the order of the learned CIT – A in following the order of his predecessor, when revenue could not produce any evidence before us that the order of the CIT – A for assessment year 2011 – 12 has not been accepted by the revenue. - Decided against revenue.
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