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TMI Blog2017 (1) TMI 1331X X X X Extracts X X X X X X X X Extracts X X X X ..... n for interest on loan for purchase of house property and it was the assessee who claimed the deduction in full in respect of Gurgaon property as mentioned above and also the assessee declared the income from house property in full in his return of income. 4. That it is a general social practice to have wife as co-owner to provide social security and deal with inheritance related issues on demise spouse and also, the bank prefer to have spouse as co-borrower for the purpose of additional security to the loans extended and that was the purpose behind making Mrs. Jaya Verma as co-owner and co-borrower in the property and loan respectively. The banks prefer have spouses as co-borrower also from the point of view that in case of demise of borrower, the liability continues to remain on surviving spouse. 5. That in terms of section 24(b) of the Income Tax Act, the person who makes payment of EMIs is entitled to deduction in respect of interest on housing loan. 6. That the learned CIT(A) confirmed additions of Rs. 103,310/- out of the total interest of Rs. 3,78,927/- allowing the assessee interest to the extent of 73% only on the grounds that assessee declared rent income from Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 14,66,110/-). Addition to the income is made accordingly. ........................ In respect of the property at A-1210, Tris Springfields, Sarojpur Main Road, Bangalore, it is seen that the property is jointly owned by the assessee and his wife. As per the rent agreement the rent is shared in the ratio of 73% and 27% between the assessee and his wife, while Smt. Jaya Verma is showing income from this property, no interest has been claimed by her. While on the other hand, the assessee has claimed the entire interest of Rs. 3,78,927/-. The claim of the assessee for interest is, therefore, allowed at Rs. 2,76,617/- and the balance of Rs. 1,02,310/- is added to the income of the assessee." 4. Aggrieved by this, the assessee came in appeal before the First Appellate Authority. The submissions advanced on behalf of the assessee are found recorded in Paras 3.2 and 3.5 of the impugned order, considering which the claim of the assessee was rejected holding as under:- (i) C-440, Gurgaon:- "In this regard, it is seen from the facts recorded in the assessment order as well as in the submissions given by the appellant that the property is jointly owned by the appellant and hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts available on record, I am of the view that the impugned order cannot be upheld as the submissions of the assessee supported by evidence have neither been examined nor addressed by the Ld. CIT(A) while deciding the issues raised in the appeal. It is further seen that the assessee in support of its claim, has filed fresh evidences before the CIT(A) stating that the respective properties have been purchased by the assessee entirely through his own funds. The said claim is supported by the bank account maintained with HDFC Bank Ltd. A/c No.05721140000124 wherein the salary payment of the assessee as well as the rental income from the house property is stated to be received. The loan for the specific property, it has been stated, is taken from ICICI Bank and the EMI of the loan has been paid through the bank A/c No.000201544546 from ICICI Bank Ltd. 5.1. I am of the view that the mere fact that the assessee has shown the properties as jointly owned alongwith his wife and the HDFC bank account also is in the joint name of the assessee and his wife, by itself, cannot lead to the conclusion that the investment in the property is also made by the wife where even the interest by w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal factors cannot be ignored and discarded. The spouse who though shown as a co-owner may appear to be entitled to claim deduction simply on the basis of the said fact but in the facts of the present case has to be excluded from availing the benefits due to the tax-payer when there is substantial evidence to the contrary that the property was neither purchased nor sourced through a loan applied by the wife. Hence, in the absence of any actual financial contribution for acquiring the asset the mere addition of the name of the spouse as a coowner by itself can not be the determinative criteria denying the deduction claimed by the husband and on verification of facts, it has to be allowed. The fact that no rental income has been received by the assessee's wife is also a consistent claim on record which needs to be verified. 5.2. Apart from the above, there is also a submission on record that 100% of rent from the Bangalore property has been declared by the assessee as his rent income. The Rent Agreement clearly sets out that rent received for furniture and appliances is receivable and therefore received by his spouse. In view of the documentary evidence on record and nothing shown t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st on loan taken for purchase of house property to the person taking the loan for acquiring, constructing, repairing, renewing or reconstructing with borrowed capital, it is such a person who has himself made the initial down payment and paid EMIs from his own resources for purchase of the property belonging to him (or acquired through that loan) and has received the rent income if any from the property who alone is entitled to tax relief. Accordingly on a consideration of the material available on record and the views of the tax authorities as expressed in the orders and the argument of the assessee before the CIT(A), I am of the view that the impugned order deserves to be set aside. The assessee on facts has placed fresh evidences before the CIT(A) which as per record have been remanded to the AO who has failed to file any Remand Report. In the circumstances, while remanding the issue to the CIT(A) it is directed that another reasonable attempt may be made to obtain a Remand Report from the AO and in case the AO still fails to respond, the CIT(A), may consider and verify the evidences at his level and pass a speaking order in accordance with law after giving the assessee a reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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