TMI Blog2016 (7) TMI 1015X X X X Extracts X X X X X X X X Extracts X X X X ..... iso he could claim deduction to the extent of ₹ 30,000/-, and if it establishes fulfillment of conditions provided in second proviso, then to the extent of ₹ 2.00 lakhs. The assessee has to prove that this bungalow was purchased with borrowed funds. But neither the bungalow was ready for self-occupation 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 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No2- Deep Mangal Society, Athwaline, Surat has been purchased by the assesses as a co-owner. The documents 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 the case. 4. The ld.AO has observed that the assessee has shown rental income from Shivali Heights. As per computation of income, the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 incurred by the owner according to the method of accounting regularly employed by him) in determining the annual value of the property of that previous year in which such taxes are actually paid by him. Explanation.-For the purposes of clause (b) or clause (c) of this sub-section, the amount of actual rent received or receivable by the owner shall not incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue; (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 property referred to in sub-section (2) of section 23, the amount of deduction shall not exceed thirty thousand 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 proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction 13500 31500 Net Annual Value of Deep Mangal Bungalow NIL Less: Interest on capital borrowed from ICICI Bank 124952 -124952 -93452 8. At this stage, it is pertinent to observe that the bungalow has been purchased on 18.12.2007 for the purpose of assessee s own residence. No rent or other benefit of this property has been derived by any of the co-owners as necessary renovation was being carried out in the property. In the light of the above factual situation, let us examine provision of the Act. A bare per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction of an interest expenditure. In view of the above discussion, I am of the view that under both the fold of propositions, the assessee is not entitled for the deduction of interest expenditure. 9. In the next ground of appeal, the grievance of the assessee is that the ld.CIT(A) has erred in confirming the adhoc disallowance of ₹ 60,370/-. 10. Brief facts of the case are that the assessee had claimed expenditure of ₹ 3,01,843/- against commission income of ₹ 4.00 lakhs. The AO has disallowed a sum of ₹ 1.00 lakh out of the total claim made by the assessee. The ld.AO has observed that the expenditure incurred by the assessee relates to car and he was not maintaining any log book. The ld.CIT(A) concurred w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
