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Issues involved: Appeal against order u/s 154 of the IT Act for assessment year 2008-09 regarding deduction of housing loan interest and exempt income on account of interest.
Deduction of Housing Loan Interest: The assessee did not claim deduction of housing loan interest in the return of income processed u/s 143(1)(a). The AO rejected the claim u/s 154 as it was not originally made in the return. The CIT(A) upheld the AO's decision stating that no mistake was apparent as the claim was not in the original return. The assessee argued that the exempt income claimed should have led to the deduction. However, as per Section 143(1)(a), the AO must process the return as filed, and no arithmetical error or incorrect claim was found. The claim for deduction was made for the first time in the application u/s 154, not in the original return. The AO is not required to investigate claims not made in the return. The failure to file a revised return further weakened the assessee's case. The Tribunal found no grounds to interfere with the CIT(A)'s decision and dismissed the appeal. Exempt Income on Account of Interest: The assessee claimed exempt income of &8377; 1,50,000 in Schedule-E, which was not considered for deduction during processing u/s 143(1)(a). The assessee argued that this was a mistake on record and should have led to the deduction. However, the Tribunal held that as the claim was not made in the return of income, the AO was not obligated to consider it during processing. The failure to clarify the claim in the return itself meant there was no apparent mistake for rectification u/s 154. The Tribunal upheld the CIT(A)'s decision to dismiss the appeal, emphasizing the importance of making claims in the original return to avoid such issues.
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