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TMI Blog2017 (3) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... A.K.Sinha, JCIT For The Respondent : Shri Vinod Kr. Jain, FCA ORDER Per N.V.Vasudevan, JM This is an appeal by the Revenue against the order dated 27.02.2014 of CIT(A)-VIII, Kolkata relating to A.Y.2010-11. 2. The only issue raised by the revenue in this appeal is as to whether the CIT(A) was justified in deleting the addition of ₹ 1,00,12,365/- on account of interest claimed as deduction u/s 24(b) of the Income Tax Act, 1961 (Act). 3. It is not in dispute that the assessee declared income under the head income from house property . While computing income from house property the assesee claimed deduction of interest paid on loan borrowed for the purpose of construction of the house property u/s 24(b) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s eligible for deduction u/s 24(b) of the Act. With regard to the remaining loan of ₹ 11.63 crores the AO was of the view that this cannot be considered as loan that was utilized for acquiring the property and therefore interest paid on ₹ 11.63 crores was not an eligible deduction u/s 24(b) of the Act. According to the AO the borrowing to the extent of ₹ 11.63 crores was only to repay the amount borrowed for acquiring the property and not for acquiring the property and therefore the requirement of Sec.24(b) of the Act was not satisfied. 5. The AO accordingly disallowed the proportionate interest as follows :- Accordingly, interest of ₹ 1,00,12,365/- [ ₹ 1,72,18,169 x (Rs.11.63 crore)/(Rs.20 crore) ] is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (India) Pvt. Ltd. vs. DCIT in IT(SS) A No. 05/Kol/2012 dated 11.06.2013. b) ITO v. M.s Faith Real Estates P. Ltd. and others in ITA No. 5070 5181/Del/2011 dated 11.06.2011 c) ACIT v. Sunil Kr. Agarwal in ITA No.641/Luck/2010 (2011) 139 TTJ (Luck)(UO) 49 d) Realty Finance Leasing (P) Ltd. v. ITO (2006) 5 SO 348 (Mumbai) From the aforesaid discussion, we find that the dispute is as to whether the assesseecompany is entitled deduction for interest expenditure of ₹ 2,11,44,914/- from the income earned under the head house property u/s 24(b) of the Act. The AO found that assessee has taken loan from SBM during the month of August, 2008 and repaid the loan of the holding company. The AO claimed that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e years from the end of the financial year in which capital was borrowed], the amount of deduction under this clause shall not exceed [two lakh rupees]. Explanation. - Where the property has been acquired or constructed with borrowed capital, the interest, if any, payable on such capital borrowed for the period prior to the previous year in which the property has been acquired or constructed, as reduced by any part thereof allowed as deduction under any other provision of this Act, shall be deducted under this clause in equal installments for the said previous year and for each of the four immediately succeeding previous years] [Provided also that no deduction shall be made under the second Proviso unless the assessee furnishes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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