1993 (5) TMI 75 - AT - Income Tax

Summary

Issues:
Appeal against order under section 154 of the Income-tax Act, 1961 disallowing claim under section 80C(2)(h) of the Act.

Detailed Analysis:

1. The appeal was filed by the assessee against the order of the Dy. CIT (A) confirming the order of the ITO passed under section 154 of the Income-tax Act, 1961. The specific ground of appeal was that the disallowance of the claim under section 80C(2)(h) of the Act was erroneous.

2. The assessee, a salaried employee, had purchased a flat and claimed a deduction under section 80C(2)(h)(ii) of the Act. The assessee borrowed money from HDFC and provided a completion certificate for the property. The original assessment disallowed the claim as no proof of completion after 1-4-1987 was attached. The assessee later submitted a completion certificate, but the claim was rejected by the Assessing Officer under section 154.

3. The Dy. CIT (A) upheld the order of the ITO under section 154, leading to the appeal before the Tribunal by the assessee.

4. During the hearing, arguments from both the assessee's representative and the departmental representative were considered.

5. The Tribunal analyzed the legal provisions under section 24 and section 80C(2)(h)(ii) of the Act. It was noted that the assessee had paid interest and principal amount to HDFC, with a deduction of Rs. 5,000 allowable under section 24. The Tribunal found that the assessee was entitled to claim the deduction for the principal and interest amount paid.

6. The assessee's representative relied on a judgment of the House of Lords and a Supreme Court judgment to support the claim for deduction. The departmental representative referred to a Board Circular during the hearing.

7. After considering the legal aspects and precedents cited, the Tribunal concluded that the Dy. CIT (A) erred in confirming the order disallowing the claim. The Tribunal held that the assessee was entitled to claim the deduction under section 80C(2)(h) for the amount paid.

8. As a result, the appeal by the assessee was allowed, and the assessee succeeded in the matter.