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TMI Blog2012 (7) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... aised construction it or renovated it and then earned income, then expenses in the shape of interest etc. would be allowed as a deduction out of the rental income - assessee has filed a bank certificate to provide the transaction details and the accounts of the assessee for earlier years i.e. balance sheet, ledger account etc has alleged that it has raised unsecured loan from individual for construction, these loans were repaid by taking a term loan from the bank - remit the case back for verification and re adjudicate - in favour of assessee for statistical purposes. - ITA No. 5723/Del/2010 - - - Dated:- 22-6-2012 - SHRI RAJPAL YADAV AND SHRI B.C. MEENA JJ. Appellant by: Shri Parikshit Aggarwal, FCA Respondent by: Shri Daven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... papers to the tax consultant who could not prepare the appeal and submit before the ITAT. Taking into consideration all these aspects, we allow the application for condonation of delay and condone the delay of twenty days in filing the appeal. We proceed to decide the appeal on merit. 4. In the first ground of appeal, grievance of the assessee is that Learned CIT(Appeals) has erred in confirming the disallowance of ₹ 1,51,446. The brief facts of the case are that the assessee has filed debited following expenses in its books of account.: Loan processing fee Rs.1,19,307 Sales-tax ₹ 11,350 Insurance Expenses ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses . According to the Assessing Officer, assessee failed to submit any explanation in support of its claim. His finding on this issue reads as under: Further vide order letter dated 08.12.2008 and notice dated same, the assessee company was asked to show cause why the financial expenses of ₹ 15,48,278 be not disallowed as the borrowed capital has not been utilized for business purpose and the case was fixed for 15.12.2008. ON the said date none attended nor any adjournment was filed. Out of the total expenses under the head financial expenses, amount of ₹ 1,19,307 being loan processing fees and ₹ 5,174 being bank charges has already been disallowed. In view of the non compliance of the above show cause, amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Chanderkanta Aggarwal, Ritu Aggarwal and Pawan Gupta. This loan was used for the construction as well as for purchase of land. Out of this loan, a substantial amount was repaid. The assessee thereafter took a term loan from UCO Bank amounting to ₹ 1.95 crores. This loan was used to repay the unsecured loan taken from various individuals. Thus, the loan from the bank was used by the assessee for repayment of unsecured loan taken from various persons during the construction period. All these details were submitted to the Assessing Officer. The Assessing Officer has accepted the contentions of the assessee in assessment year 2005-06 when an assessment order was passed under sec. 143(3) of the Act. Thus, all these details were on the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the whole 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] 11. A bare perusal of the above provisions would indicate that income chargeable to tax under the head income from house property shall be computed after allowing deduction, namely, interest on an amount which was used for acquisition, construction, repair, renovation of a property. Thus, if an assessee has borrowed funds, purchased a property/land, raised construction it or renovated it and then earned income, then expe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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