TMI Blog2022 (8) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... he loan was not borrowed for the impugned Flat No.11. Assessee had claimed that the loan was used for making payment to the Tenants of Flat No.11, but mere oral recital does not hold good against the written document of loan which mentions Flat No.12 and garage 12G. - loan was not for the impugned Flat No.11, hence the assessee is not eligible for deduction u/s.24(b) of the Act for the interest paid on the amount borrowed from Reliance Home Finance. Also, the Flat No.11 was acquired in September 2001 by the assessee. The impugned loan was availed in 2011. Therefore, on this ground also the assessee is not eligible for deduction u/s.24(b) of the Act. Therefore, it is held that the assessee is not eligible for deduction u/s 24(b) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty (i.e. Flat No.11, Breach Candy Garden, Mumbai) from statutory tenant. 2] The learned CIT(A) failed to appreciate that payment of consideration (with aid of borrowed funds) has direct nexus with acquisition of possession of impaired property from the statutory tenant. 3] The learned CIT(A) failed to appreciate the fact that - a. Appellant purchased a tenanted flat and by paying compensation to the statutory tenant appellant acquired possession of said flat after eleven years from the date of acquiring its title hence, interest on money borrowed for paying compensation to the statutory tenant was allowable U/sec. 24 of the Income Tax Act. b. Acquisition of property for the purposes of section 24 means not only the ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dering statutory tenancy is unregistered and on a stamp paper of Rs.100/- only. The assessee claimed that she borrowed Rs.8,68,50,000/- from Reliance Home Finance to make the payment of Rs.9,99,00,000/-. However, as per the Loan Agreement which is reproduced in the assessment order, the assessee has borrowed the amount of Rs. 9.01 Crores as TOP UP loan and the said loan is borrowed in joint name by assessee with Intervalve India Ltd. In the loan Agreement the property mentioned is Flat No.12 and Garage No.12G, Breach Candy Garden House, Mumbai. This fact has been accepted by the assessee in her submission which is reproduced in the ld.CIT(A) s order, the assessee has stated that initially the appellant had borrowed funds for purchase of F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, the property appearing in the Loan Document and the property for which deduction u/s 24(b) is claimed are different. It is also observed that said Loan is classified as TOP UP Loan. The loan amount is Rs.9.1 crores but assessee had claimed that assessee had paid Rs.8,68,50,000/-to the statutory tenant of Flat No.11. Before discussing further the section 24 as applicable for the A.Y. 2014-15 is reproduced here as under: Section 24 of the Act is reproduced here as under : 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, repaire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le or any part of the capital borrowed which remains to be repaid as a new loan. Explanation.-For the purposes of this proviso, the expression new loan means the whole or any part of a loan taken by the assessee subsequent to the capital borrowed, for the purpose of repayment of such capital.] 6. Thus the Section 24(b) have two components, one the property should have been acquired/constructed with borrowed capital and the Assessee has to submit a certificate from the lender specifying the interest payable on the capital borrowed for the purpose of such acquisition. 7. In this case it is a fact that as per the Loan document (sanction letter dated 07/03/2011) the loan has been borrowed for Flat No.12 and garage 12G which are di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rowed for the purposes of acquiring, constructing, repairing, renewing or reconstructing the said property. In other words, the property is required to be acquired, constructed, repaired, renewed or reconstructed with the borrowed capital. It is concurrently recorded by the authorities that the property was purchased by the assessee in November, 2005 whereas the loan was taken from ICICI Bank on 31.12.2005. Thus, the loan was taken subsequent to the purchase of the property and cannot be said that the same was utilized for acquiring the property. In such circumstances, the Assessing Officer, the CIT(A) and the Tribunal were justified in declining the benefit of Section 24(b) of the Act. Equally, once it is held that the assessee had not bor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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