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2017 (3) TMI 144 - ITAT KOLKATA

2017 (3) TMI 144 - ITAT KOLKATA - TMI - Interest claimed as deduction u/s 24(b) - Held that:- It is clear from the facts available on record that the sum of ₹ 11.63 crores was utilized for repayment of the original borrowing from M/s. Patton International Ltd is erroneous, which was admitted a loan borrowed for the purpose of acquisition of the property. In the light of the such admitted factual position, we are of the view that the deduction claimed by the Assessee has to be allowed as la .....

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₹ 1,00,12,365/- on account of interest claimed as deduction u/s 24(b) of the Income Tax Act, 1961 (Act). 3. It is not in dispute that the assessee declared income under the head income from house property . While computing income from house property the assesee claimed deduction of interest paid on loan borrowed for the purpose of construction of the house property u/s 24(b) of the Act of a sum of ₹ 2,28,31,800/-. There is no dispute that the property in respect of which interest exp .....

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8377; 17,50,00,000/- was availed form State Bank of Mysore. The loan from State Bank of Mysore was availed on 04.01.2006. This loan stood reduced as on 19.08.2008 to ₹ 8.37 crores after repayment. During the previous year the assessee borrowed a sum of ₹ 20 crores and utilized the same to repay the outstanding loan of ₹ 8.37 crores to State Bank of Mysore and the remaining ₹ 11.63 crores for repaying loan to M/s. Patton International Ltd. On the borrowing of ₹ 20 cr .....

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s of the view that this cannot be considered as loan that was utilized for acquiring the property and therefore interest paid on ₹ 11.63 crores was not an eligible deduction u/s 24(b) of the Act. According to the AO the borrowing to the extent of ₹ 11.63 crores was only to repay the amount borrowed for acquiring the property and not for acquiring the property and therefore the requirement of Sec.24(b) of the Act was not satisfied. 5. The AO accordingly disallowed the proportionate in .....

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repay a loan that was borrowed for the purpose of acquisition of the property. Following the aforesaid order the CIT(A) deleted the addition made by AO. Aggrieved by the order of CIT(A) the revenue has preferred the present appeal before the Tribunal. 7. At the time of hearing it was brought to our notice that order of CIT(A) for A.Y.2009-10 which was followed by CIT(A) in the impugned order was the subject matter of the appeal before the Hon ble ITAT and in ITA No.90/Kol/2013 by order dated 24 .....

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n u/s. 24(b) of the Act and in support of his contention, Ld. AR cited following case laws:- a) Saltee Infotex (India) Pvt. Ltd. vs. DCIT in IT(SS) A No. 05/Kol/2012 dated 11.06.2013. b) ITO v. M.s Faith Real Estates P. Ltd. and others in ITA No. 5070 & 5181/Del/2011 dated 11.06.2011 c) ACIT v. Sunil Kr. Agarwal in ITA No.641/Luck/2010 (2011) 139 TTJ (Luck)(UO) 49 d) Realty Finance & Leasing (P) Ltd. v. ITO (2006) 5 SO 348 (Mumbai) From the aforesaid discussion, we find that the dispute .....

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ot entitled to claim deduction in respect of interest payable for fresh money borrowed to repay the earlier loan and accordingly, he disallowed. Before Ld. CIT(A) Ld. AR of assessee submitted that the fresh loan taken to repay the original loan was within the ambit of law and accordingly Ld. CIT(A) has deleted the addition which made by AO. It is also observed that no material has been brought on record by Ld. DR to controvert the above finding of Ld. CIT(A). A plain understanding of section 24( .....

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ection (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 propert .....

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