TMI Blog2018 (3) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... thereupon - Deductions from income from house property - Held that:- The interest on housing loan has not been mandated to be allowed as deduction otherwise than the prescription of law prescribed as above. Furthermore, we find that the CIT(Appeals) in his appellate order has referred to certain decisions of Hon’ble Apex Court and Hon’ble High Courts which are on this issue and are against the proposition being canvassed by the assessee. It is trite law that the decision from the higher judicial forums take precedence over the decisions of the tribunal. Accordingly, in our considered opinion, the CIT(Appeals) has properly appreciated the issue in light of the relevant law and appropriate case laws from higher forums. Accordingly, we do not find any infirmity in the order of the ld. Commissioner of Income Tax (Appeals). - Assessee appeal dismissed. - I.T.A. No. 3392/Mum/2016 - - - Dated:- 13-3-2018 - SHRI SHAMIM YAHYA, AM AND SHRI RAM LAL NEGI, JM For The Appellant : Shri Kapil R. Jain For The Respondent : Shri Ram Tiwari ORDER Per Shamim Yahya, A. M.: This appeal by the assessee is directed against order of the ld. Commissioner of Income Tax (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dice to each other. 3. From the grounds of appeal above it is clear that that effectively the assessee is making two effective issues which are as under: 1. Issue of deposit of ₹ 50 lakh with Andhra bank to be treated as qualifying for deposit under capital gains scheme. 2. Treatment of interest under housing loan as cost of improvement and application of cost inflation index thereupon. 4. Brief facts of the case are as under: The assessee had sold a flat on 25.11.2010 for an amount of ₹ 2,57,00,000/- and had computed long term capital gain as under: Amount(Rs.) Amount(Rs.) Sale Prize of flat 2,57,00,000/- Cost of Flat 67,32,850/- Stamp Duty 3,19,310/- Registration 31,660/- Cost of improvement in account of Membership fee, Society Charges and Podium/ open parking 6,03,650/- Expenses incurred on Air Conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 497 00 2006-07 Parking Charges Paid-75000 Podium parking Hiranandani-175000 Loan Interest to 1C1CI Bank-299345 752571 75000 175000 519 102745 239740 2007-08 Infrastructure deposit-74550 Society Charges-30000 Maintenance Charges-149100 Loan Interest to IC1C1 Bank291738 Stamp Duty-319300 Registration fee-31600 1156553 74550 30000 149100 319300 31600 551 96198 38711 192395 00 412019 40776 2008-9 Loan Interest to ICICI Bank-283521 /furniture cost paid to wood Plaza- 679500 1176474 _________ 679500 582 00 830110 2009-10 Loan Interest to ICICI Bank-274644 Air conditioning cost + Labour-195387 528784 195387 632 00 219810 2010-11 Loan Interest to ICICI Bank-188772 188772 -- 711 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2005-06 51670 774741 00 51670 480 76536 2006-07 306387 1014659 00 306387 497 438312 2007-08 299345 376080 00 299345 519 410085 2008-09 291738 105570 150000(SOP)* 141738 551 182896 2009-10 283521 149280 150000(SOP) 133521 582 163116 2010-11 274644 163587 274644 (Rental inc.) 00 632 00 2011-12 188772 172990 188772 (Rental Incl.) 00 711 00 Total 1696077 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. 8. Thereafter, the ld. Commissioner of Income Tax (Appeals) elaborately considered the provisions of law and the case laws on the subject. The ld. Commissioner of Income Tax (Appeals) concluded as under: 6.6 The judgments discussed above lay down following principles: a). In view of judgements of Honble SC, in case of RM, Arunachalam's case [1997] 227 ITR 222 and V. S. M. R. Jaga-dishchandran's case [1997] 227 ITR 240 as the appellant had created the motgage and paid the interest, therefore as per law laid down by SC the appellant is not entitled to claim deduction of interest while computing capital gains. b). The interest paid to bank and claimed as deduction u/s 24 does not form part of cost of acquisition or cost of Improvement as held by Smt. S. Valliammai v. CIT [1981] 127 ITR 713, which is further followed in Mrs. Umayal Ramanathan by ITAT Chennai and Karnatka High Court in the case of CIT v Maithreyi Pai (1985) 152 ITR 247 (Kar) c. In view of Joginder Singh Chawla, Appellant Vs Asst. Commissioner of Income Tax -19(3), Mumbai. I.T.A No.349/Mum/2010, the interest which was not claimed as deduction u/s 24(b) and was capitalised is neith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cost of the new asset : Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,- ( i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and ( ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid. On going through the facts of the case, it is seen that the appellant did not purchase new asset till date of filing of the return. He has deposited only ₹ 50 lacs in Capital Gain Account with SBI for which he is entitled to deduction under section 54 during the year. As the amount deposited with Andhra Bank was not with Capital Gains Account Scheme, the AO has rightly denied exemption on this account. The plea of appellant to allow deduction for normal fixed deposit with Andhra Bank is not acceptable and rejected. 10. Against the above order, the assessee is in appeal before us. 11. We have heard the learned departmental re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty value of deposits with these banks increased from ₹ 1,00,00,000 to ₹ 1,22,06,157 by June/ Oct 2013 as under- State Bank of India- 2 receipts maturity amt in Oct 2013 62,30,698.Ann-A Andhra Bank - 3 receipts maturity amt in Jun 2013 59.7,5.459-Ann-B Total 1,22,06,157 - Assessing officer in his order dated 24/03/2014 computed net taxable LT capital gain at ₹ 85,54,462 after allowing deduction of ₹ 50 lacs only as against our claim of ₹ 100 lacs as original deposits of ₹ 100 lacs continued for over 3 years and calculated LT Taxable gain as under- A.Y.2011-12 1,35,54,462 Less- (50,00,000) = 85.54,462. A.Y.2014-15........... 50.00.000 1,35,54,462 Relief sought as under- A.Y.2011-12 1,35.54,462 Less- (1,00,00,000 = 35,54,462 A.Y.2014-15 Balance taxab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t relief only within the four corners of law. The assessee having not complied with the provisions of law by making the requisite investment in residential accommodation or investment in designated capital gain account cannot claim relief from capital gain to the extent of ₹ 50 lacs deposited in Andhra Bank account which is not qualifying for capital gain exemption. Hence, in our considered opinion, the order of ld. Commissioner of Income Tax (Appeals) is reasonable one and does not need any inference on our part. 13. The assessee has made a further claim of seeking the interest on housing loan as cost of improvement and it also claims benefit of indexation thereon. In this regard, we note that the assessee has also claimed some part of the interest as deduction from interest from house property. The provision for treatment of interest on borrowed capital is provided in section 24(b) of the I. T. Act which reads as under: Deductions from income from house property. 24. Income chargeable under the head Income from house property shall be computed after making the following deductions, namely:- ( b) where the property has been acquired, constructed, repai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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