TMI Blog2016 (5) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... cquire the property. In the present case, the assessee raised loan of ₹ 22.50 lakhs from the Indian Overseas Bank and acquired the property, income of which was assessed under the head "Income from house property". Therefore, the interest paid amounting to ₹ 1,42,123 was deductible under section 24(b) of the Act. In that view of the matter we set aside the impugned order and direct the Assessing Officer to allow the claim of the assessee. Deduction under section 80C - Held that:- In the present case, the assessee borrowed the amount for acquiring the property whose income was assessed under the head "Income from house property" and made the repayment of the said loan. Therefore, the said repayment was eligible for claiming the deduction under section 80C of the Act. In that view of the matter, we set aside the impugned order and direct the Assessing Officer to include the amount claimed by the assessee while working out the deduction under section 80C of the Act. - Decided in favour of assessee - I. T. A. No. 3117/Del/2015, I. T. A. No. 3118/Del/2015 - - - Dated:- 5-2-2016 - N. K. Saini (Accountant Member) And A. T. Varkey (Judicial Member) For the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved that the assessee was the co-owner of the farm land with Smt. Anita Rani Mahajan, both having the equal share and entered into an agreement with M/s. Nimitya Properties Ltd. who will construct the farm house on the land, bearing all the expenditure incurred on the development and construction of the said farm house and that on the completion of the project, the developer, i.e., M/s. Nimitya Properties Ltd. will be entitled to 50 per cent. share out of the total consideration to be received after selling the said farm house and in case the property is rented out, the developer will receive 70 per cent. of the rent, the remaining 30 per cent. will go to the owners of the land. Thus, the assessee along with Smt. Anita Rani Mahajan was entitled to receive 30 per cent. of the rent. The individual share of the assessee being 15 per cent. of the total rent which came to ₹ 11,79,375 whereas the assessee had declared rent of ₹ 10,22,171. According to the Assessing Officer, the assessee had declared the rent short by ₹ 1,10,043 which was added to the income of the assessee. 6. During the course of assessment proceedings, the Assessing Officer also noticed that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly, upheld the disallowance made by the Assessing Officer. As regards to the disallowance of ₹ 49,000 under section 80C of the Act, the learned Commissioner of Income-tax (Appeals) held that the assessee had not incurred any amount for construction of the farm house as construction cost was made by M/s. Nimitya Properties Ltd. Accordingly, the said disallowance was also upheld. 9. Now, the assessee is in appeal. The learned counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the assessee raised a housing loan for purchasing the property in question and acquired the right in the property. It was stated that the income from the said property was assessed under the head Income from house property and even the addition was made by the Assessing Officer in the income under the head Income from house property . It was further stated that the learned Commissioner of Income-tax (Appeals) cited the wrong decision, facts of which were not applicable to the facts of the assessee's case because in the said case the loan was taken for eviction and the money was utilised for paying the tenant for handing over the pos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital : Provided that in respect of property referred to in sub-section (2) of section 23, the amount of deduction shall not exceed thirty thou sand rupees : Provided further that where the property referred to in the first proviso is acquired or constructed with capital borrowed on or after the 1st day of April, 1999, and such acquisition or construction is completed within three years from the end of the financial year in which capital was borrowed, the amount of deduction under this clause shall not exceed two lakh rupees. Explanation.-Where the property has been acquired or constructed with borrowed capital, the interest, if any, payable on such capital borrowed for the period prior to the previous year in which the property has been acquired or constructed, as reduced by any part thereof allowed as deduction under any other provision of this Act, shall be deducted under this clause in equal instalments for the said previous year and for each of the four immediately succeeding previous years : Provided also that no deduction shall be made under the second ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herself did not construct the property but only acquired the land. As we have already noted in the former part of this order that the assessee purchased the land along with Smt. Anita Rani Mahajan on which the construction was done by M/s. Nimitya Properties Ltd. and both the parties, i.e., the assessee along with Smt. Anita Rani Mahajan and the developer company became the co-owner of the constructed property. Therefore, it is clear that the assessee made the repayment of the home loan taken for acquiring the property whose income was assessed under the head Income from house property . To resolve the present controversy, it is relevant to discuss the provision contained under section 80C(1), 80C(2)(xviii) and 80C(7)(d) of the Act applicable for the relevant assessment year under consideration which read as under : 80C.(1) In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, in accordance with and subject to the provisions of this section, the whole of the amount paid or deposited in the previous year, being the aggregate of the sums referred to in sub-section (2), as does not exceed one hundred and fifty th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eholder of a company or a member of a co-operative society has to pay for becoming such shareholder or member ; or (B) the cost of any addition or alteration to, or renovation or repair of, the house property which is carried out after the issue of the completion certificate in respect of the house property by the authority competent to issue such certificate or after the house property or any part thereof has either been occupied by the assessee or any other person on his behalf or been let out ; or (C) any expenditure in respect of which deduction is allowable under the provisions of section 24 ; . . . (7) For the purposes of this section,- (a) the insurance, deferred annuity, provident fund and superan nuation fund referred to in clauses (i) to (vii) ; (b) unit-linked insurance plan and annuity plan referred to in clauses (xii) to (xiiia) ; (c) pension fund and subscription to deposit scheme referred to in clauses (xiiic) to (xiva) ; (d) amount borrowed for purchase or construction of a residential house referred to in clause (xv), of sub-section (2) of section 88 shall be eligible for deduction under the corresponding provisions of this s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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