2019 (9) TMI 1558 - AT - Income Tax

Income from house property - Enhancing the ALV of the let out property - CIT(A) computing the ALV of the School Building @ the rate of 8% of investment and in enhancing the ALV of the let out property and thereby enhancing the income - interest paid on secured loan, utilized for construction of school building in respect of which full rental income as included the computation of taxable income - Whether CIT(A) erred in invoking the provision of section 251(2) and adding to the taxable income being 50% of interest claimed and allowed by the Assessing Officer - HELD THAT - Both the above issues have been decided in favour of the assessee by in the case of same assessee for the A.Y. 2010-2011 2018 (6) TMI 1280 - ITAT DELHI - Decided in favour of assessee.

Summary

Issues:
1. Computation of ALV of school building and enhancement of income
2. Addition to taxable income under section 251(2) for interest claimed

Analysis:

Issue 1: Computation of ALV of school building and enhancement of income
The appeal by the Assessee was directed against the Order of the Ld. CIT(A)-9 for the A.Y. 2012-2013. The Assessee argued that the CIT(A) erred in computing the ALV of the School Building and enhancing the ALV of the let-out property, resulting in an increase in income. The Assessee contended that the issues were previously decided in their favor by the ITAT in a previous case for the A.Y. 2010-2011. The ITAT, following its previous decision, set aside the Orders of the authorities below and deleted the additions, thereby allowing the appeal of the Assessee.

Issue 2: Addition to taxable income under section 251(2) for interest claimed
The second issue involved the addition to taxable income under section 251(2) for interest claimed on a secured loan utilized for the construction of the school building. The Assessee argued that the interest paid was duly considered and allowed by the Assessing Officer in the computation of taxable income. The CIT(A) invoked the provision of section 251(2) and added an amount to the taxable income. However, following the precedent set in the previous case for the A.Y. 2010-2011, the ITAT set aside the CIT(A)'s decision and deleted the addition, thereby allowing the appeal of the Assessee.

In conclusion, the ITAT Delhi, comprising SHRI BHAVNESH SAINI, JUDICIAL MEMBER, and SHRI O.P. KANT, ACCOUNTANT MEMBER, allowed the appeal of the Assessee, setting aside the Orders of the authorities below and deleting the additions made to the income. The decision was based on the precedent set in a previous case for the A.Y. 2010-2011, where similar issues were decided in favor of the Assessee.