2015 (4) TMI 707

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..... of assessee’s claim for deduction u/s 24(b). A similar issue involved in the immediately preceding year i.e. assessment year 2006-07 was decided by the learned CIT(Appeals) in favour of the assessee in the similar facts and circumstances and the said decision of learned CIT(Appeals)d giving relief to the assessee has been upheld by the Tribunal vide its order dated 20th April, 2010 [2010 (4) TMI 1027 - ITAT MUMBAI]. As held by the Tribunal in the said order, the entire interest paid on the partners’ capital was related to the premises which were let out by the assessee and the same, therefore, was allowable as deduction u/s 24(b) while computing income of the assessee under the head “Income from house property”. Respectfully following t .....

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..... deduction u/s 24(b) was claimed on account of interest paid on the partners capital. It was claimed by the assessee that the said interest was paid to the partners on the amount lying in their capital which was deployed for the purpose of construction of building given on rent. This claim of the assessee was not found acceptable by the AO. According to him, the capital contributed by the partners could never be treated as borrowed capital and interest paid thereon, therefore, could not be allowed as deduction u/s 24(b). He also held that the said capital actually represented accumulated profits earned by the assessee firm over the years which could not be treated as borrowed funds. Accordingly, the deduction claimed by the assessee on acc .....

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..... el for the assessee has filed a written submission to meet satisfactorily each and every point raised by the learned CIT(Appeals) while confirming the disallowance made by the AO on account of assessee s claim for deduction u/s 24(b). Moreover, as rightly submitted by the learned counsel for the assessee, a similar issue involved in the immediately preceding year i.e. assessment year 2006-07 was decided by the learned CIT(Appeals) in favour of the assessee in the similar facts and circumstances and the said decision of learned CIT(Appeals)d giving relief to the assessee has been upheld by the Tribunal vide its order dated 20th April, 2010 passed in ITA No. 3216/Mum/2009. As held by the Tribunal in the said order, the entire interest paid on .....

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