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Mrs. Priya Mahajan, New Delhi Versus The ACIT, Circle 2 (1) , Chandigarh

2015 (12) TMI 685 - ITAT CHANDIGARH

Deduction on interest of housing loan u/s 24(b) - Assessing Officer restricted it to 25% and 75% of the property is belongs to other co-owners - Held that:- In the instant case, the plot was purchased by four persons and their shares are not specified in the sale deed. Even the housing loan had also been taken jointly by the same four persons, therefore, the authorities below were justified in holding that since the individual shares were not specified in the sale deed, the logical conclusion is .....

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- Decided against assessee. - ITA No. 1221/Chd/2012 - Dated:- 16-6-2015 - SHRI H.L.KARWA, HON'BLE VICE PRESIDENT For the Appellant : Shri Mohit Dhiman For the Respondent : Shri Manjit Singh ORDER PER H.L.KARWA, VP This appeal filed by the assessee is directed against the order of CIT(A),Chandigarh dated 22.08.2012 relating to assessment year 2008-09. 2. In this appeal the assessee has raised the following grounds:- 1. The Ld. CIT(A) has erred in disallowing the 75% of the deduction claimed .....

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the proportion of investment. 4 The Ld. CIT(A) has failed to appreciate that any provision for deduction / relief / incentive has to be construed liberally. 5. The Ld. CIT(A) has failed to quash the initiation of penalty proceedings u/s 271 (1)(c) without any cogent reason. 3. Briefly stated, the facts of the case are that the assessee was employed with HFCL Infotel Limited, Mohali from 1.4.2007 to 1.1.2008 and with Verizone India Pvt Ltd, New Delhi for the remaining period relevant to assessmen .....

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43(2) of the Act on 13.9.2009. Thereafter questionnaire alongwith notice u/s 143(2) / 142(2) was issued to the assessee. On perusal of the documents, the Assessing Officer noticed that the assessee has claimed deduction on interest payment of Housing Loan amounting to ₹ 6,86,971/- u/s 24(b) of the Act for the property 3557, Sector 69, Mohali (Punjab). The Assessing Officer required the assessee to produce Title Deed / ownership detail of the above property. In response to the above query, .....

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a Arora / Priya Mahajan - assessee and (iv) Shri Rajiv Arora - brother-in-law of the assessee. 4. The relevant contents of the sale deed are reproduced herein below:- Whereas I am the owner in possession of Plot No. 3557, Sector-69, at Urban Estate S.A.S. Nagar (Mohali), Distt. Ropar, the area of which is 500 Sq. yds. and from construction point of view this Plot is vacant. The above Plot is free from all sorts of encumbrance and no litigation is going on about the same. Now I in my full senses .....

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) Sh. Rajiv Arora son of Sh. Harbans Lal Arora all residents of House No. 394, Phase- 2, S.A.S. Nagar (Mohali), Distt. Ropar for a consideration price of ₹ 19,00,000/- (Rupees Nineteen Lacs only) and the actual possession of ownership has been got made of the purchasers at the spot from today and all the original documents concerning the Plot have also been handed over to the purchasers. The total consideration price of ₹ 19,00,000/- has been received vide Draft No. 007787, dated 8.1 .....

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by the purchasers. Permission to sell the Plot has been received from the Estate Officer, PUDA, Mohali vide Letter No. 27346, dated 16.12.2003, and this document is attached with the office copy of the sale deed. The purchasers shall have to abide by the terms of the Estate Officer, PUDA, Mohali. I and my other property shall be responsible in all situations for any legal defect. Therefore the sale deed of the Plot has been executed so that proof may remains. The contents have been read over and .....

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the individual shares were not mentioned in the sale deed, the logical conclusion was that everyone had equal share in the property. The Assessing Officer required the assessee to explain as to why deduction of home loan should not be allowed in proportion to the assessee s share in property. In this regard, the assessee contended that although the property in question is in the joint name but the entire investment except loan amount for the purchase / construction towards the same was made by t .....

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d out of common fund, belonging to a number of persons; they are entitled to interest in the property identical to the interest to which they were respectively entitled in the fund. According to Assessing Officer the assessee has claimed that she had invested for purchase / construction of the impugned house property, but no evidence in this regard was produced. The Assessing Officer also observed that the housing loan has been taken jointly by all the four co-owners in whose names house propert .....

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under:- 2.3 I have considered the submission of the Ld. Counsel. For the sake of ready reference, provisions of section 45 of the Transfer of Property Act are reproduced below: Whereas immovable property is transferred for consideration to two or more persons, and such consideration is paid out of a fund belonging to them in common, they are, in the absence of contract to the contrary, respectively entitled to interest in such property identical, as nearly as may be, with the interests to which .....

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consideration is paid out of a common fund, belonging to a number of persons, they are entitled to interest in the property identical to the interest to which they were respectively entitled in the fund. The appellant has claimed that she has invested for purchase/construction of the impugned house property, but no evidence in this regard has been produced. Further, the house loan has been taken jointly by the all the four co-owners in whose names the house property was jointly purchased. Hence .....

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specified and so the house property as well as the housing loan is to be taken as jointly held by all the co-owners and interest claimed u/s24(b) is also to be equally divided. The allowable interest to the appellant u/s 24(b) will accordingly be 25% of the entire interest and the Assessing Officer has rightly restricted it to 25%. The action of the Assessing Officer is upheld and the grounds of appeal Nos. 1 to 5 are dismissed. 7. Shri Mohit Dhiman, Ld. counsel of the assessee vehemently argued .....

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perty and had been paying EMI of the housing loan out of her income which was duly submitted before him. Shri Mohit Dhiman, Ld. Counsel for the assessee further submitted that the name of the co-owners (all being members of the assessee s family) were included in the sale deed for obtaining loan from the financial institution as his individual source of income at that time was insufficient to meet the criteria of the loan set out by the said financial institution. Shri Mohit Dhiman Ld. Counsel f .....

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ed the rival submissions and have also perused the materials available on record. There is no doubt that so far as the facts of the present case are concerned, the assessee had claimed deduction on interest of housing loan of ₹ 6,86,971/- u/s 24(b)of the Act. There is no dispute that plot in question was purchased by four persons and the housing loan was also taken by same four persons. It is true that in the sale deed the share of individual is not specified. The language of section 45 of .....

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