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2016 (7) TMI 1015 - ITAT AHMEDABAD

2016 (7) TMI 1015 - ITAT AHMEDABAD - TMI - Deduction of interest expenditure - income from house property - annual value determination - Held that:- Section 23 contemplates the manner as to how annual value will be determined. Section 24 provides certain deductions against house property income. Now in the present case, the assessee has no income from Bungalow No.2 at Deep Mangal Society. His income under the head “Income from house property” has also not been shown. If we look to the scheme of .....

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n nor the assessee has given a choice. Thus, under this head also the assessee is not entitled for deduction of an interest expenditure. In view of the above discussion it is concluded that under both the fold of propositions, the assessee is not entitled for the deduction of interest expenditure. - Decided against assessee - Adhoc disallowance - Held that:- The assessee failed to establish that the expenditure was exclusively incurred for the purpose of business or profession. Possibility o .....

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ound of appeal, the assessee has pleaded that the ld.CIT(A) has erred in confirming the addition of ₹ 1,24,952/-. 3. Brief facts of the case are that the assessee has field his return of income on 19.1.2009 declaring total income at ₹ 2,87,580/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) of the Act was issued on 31.8.2009 which was duly served upon the assessee. On scrutiny of the accounts, it revealed that the assessee has taken lo .....

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uments of the said property as well as loan statement from ICICI Bank have already been submitted. Since it is an old bunglow with completed construction, interest of ₹ 124952/- on capital borrowed for the said purpose, is allowable u/s.24(b). No rent or any other benefits have been derived from the said property as it has been for the p[art of the previous year only. It is, therefore, requested to take the net annual value at NIL and kindly allow the interest by considering the facts of t .....

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record carefully. Before embarking upon an inquiry on the facts of the present case, I deem it appropriate to take note of sections 22, 23 and 24 of the Income Tax Act. They read as under: Section 22. The annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him the profits of which are chargeable to income-tax, s .....

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vable; or (c) where the property or any part of the property is let and was vacant during the whole or any part of the previous year and owing to such vacancy the actual rent received or receivable by the owner in respect thereof is less than the sum referred to in clause (a), the amount so received or receivable : Provided that the taxes levied by any local authority in respect of the property shall be deducted (irrespective of the previous year in which the liability to pay such taxes was incu .....

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house or part of a house which- (a) is in the occupation of the owner for the purposes of his own residence; or (b) cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him, the annual value of such house or part of the house shall be taken to be nil. (3) The provisions of sub-section (2) shall not apply if- (a) the house or part of the .....

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er clause (a), shall be determined under sub-section (1) as if such house or houses had been let. Section 24. Income chargeable under the head "Income from house property" shall be computed after making the following deductions, namely:- (a) a sum equal to thirty per cent of the annual value; (b) where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital: Provided that in respect of pro .....

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nation.-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 ded .....

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ny part of a loan taken by the assessee subsequent to the capital borrowed, for the purpose of repayment of such capital. 7. The assessee has placed on record computation of income on page no.14 of the paper book. The relevant part of the computation reads as under: STATEMENT OF TOTAL INCME INCOME FROM HOUSE PROPERTY: Rental Income from Shop of Shivalik Heights 45000 Less: Standard deduction 13500 31500 Net Annual Value of Deep Mangal Bungalow NIL Less: Interest on capital borrowed from ICICI Ba .....

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ands appurtenant thereto, excluding any part being used for the purpose of business or profession carried out by the assessee whose profits are chargeable to income tax, under the head Income from house property . In other words, if an assessee is an owner of building or land which was not occupied for the purpose of any business or profession, then, income tax will be chargeable under the head Income from house property on the annual value. Section 23 contemplates the manner as to how annual va .....

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