TMI Blog1985 (1) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... n loans taken for the construction of the property. 2. The assessee is an individual. He is a member of a co-operative housing society. The society itself had arranged for loan for the construction of the apartment. The construction of the apartment was completed and sometime in September 1982 the society wrote to the assessee that the interest payable on advances covering the period from 30-4- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall, subject to the provisions of sub-section (2), be computed after making the following deductions, namely :--- (i) to (v) (vi) where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital." It will be seen that where a property is being acquired with borrowed capital, the amount of interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng previous years. In other words, according to Shri Joy, up to the assessment year 1983-84 there is no provision for the deduction of interest of the earlier years. It is only from this year that the claim would be allowable. 5. I am unable to accept the submission of the department. A plain reading of the section shows that the interest payable during the accounting year would be allowed as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n possession. Therefore, the claim made by the assessee has to be accepted. 6. The Explanation, which comes into force from 1-4-1984, would be applicable to different set of facts. Where an assessee takes a loan for construction of a property and as per contract with the financing agents interest accrues annually even before the construction is completed, then the assessee cannot claim any deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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