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TMI Blog2017 (11) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Reducing the addition of Rs. 40,80,835/- on account of interest on borrowed for acquiring immovable property and issuing directions to adjust the same against the income from other sources; (ix) Holding that the loan taken from Reliance capital Ltd. was for the purposed of earning income from other sources; (x) Holding that the intention of the assessee was to earn assurance return given by the Omaxe Ltd and to purchase multiplex in the commercial space in Omaxe NRI City; (xi) Directing to allow the interest on loan u/s 57(3) of the I.T Act though the same is specifically allowable u/s 24(b) of the I.T. Act. (xii) Holding that the interest on loan was a revenue expenditure and not a capital expenditure; (xiii) Holding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertilizers Ltd Vs. CIT(1997) 227 ITR 172(Hon'ble Supreme Court) which is fully applicable in this case. 4. The return of income was e-filed on 29/7/2009 declaring taxable income of Rs. 98,25,260/-. The assessee derived income from salary and other sources. The case was selected or scrutiny and notice u/s 143(2) was issued on 23/8/2010 and notice u/s 142(1) was issued on 12/1/2011. The case was assigned for scrutiny to JCIT, Range-48 by the CIT, Delhi-XVI, New Delhi. Taking into account the nature and quantum of income, the issue involved and AIR Information details we have heard both the parties and perused the material available on record called for. 5. On perusal of the computation of income filed, it is seen that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has been examined and considered in detail. Section 57 of the Income Tax Act, 1961 (under the provisions of which, the assessee has claimed the aforesaid deduction) clearly states the deductions which can be claimed by the assessee for arriving at his income chargeable und the head income from Other Sources. The assessee in his return of income has claimed the deduction u/s 57(iii). 10. The Assessing Officer by relying on the judgment of the Hon'ble Apex Court in case of Tuticorin Alkali Chemicals & Fertilizers Ltd. Vs. CIT 227 ITR 172 (SC) held that the deduction claimed by the assessee setting of his interest income earned against the Reliance Capital cannot be accepted. Therefore, the same was disallowed and added back to the income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der dated 22/9/2017. Thus, the ITAT held as under:- "7. Undisputedly, the assessee has availed off the loan from M/s. Reliance Capital Limited for the purpose of earning interest income on advance made to M/s. Omaxe Limited; that assessee has invested in commercial property as investment for appreciation; that the assessee has not been given possession of the property in question; that M/s. Omaxe Limited with whom the assessee has invested in commercial property has stopped paying assured return to the assessee and the assessee has stopped making payment of EMI to the developer. 8. In the backdrop of the aforesaid facts and circumstances of the case, grounds of appeal and arguments addressed by ld. Authorized Representatives of the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee are into litigation before Hon'ble Delhi High Court qua the property in question and the property has also not been transferred in the name of assessee, the assessee will certainly get benefit of interest payment on the loan of Rs. 6,00,00,000/- u/s 57 (iii) of the Act as it is not a house property income as has been held by the AO. Rather it was invested in the commercial property made by the assessee to get assured return / interest from his investment of Rs. 6,00,00,000/-. 12. In these circumstances, the ld. CIT (A) has rightly held that this income is to be treated as income from other sources and the interest paid by assessee to M/s. Reliance Capital Limited is to be allowed as expenditure incurred for earning the income u/s 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 57(iii) of the Income-tax Act, 1961, in computing its income from dividend under the head "Income from other sources"." 12. So, in view of what has been discussed above, we find no illegality or perversity in the findings returned by ld. CIT (A) who has given the complete computation of total income in the impugned order, consequently both the appeals filed by the Revenue for AYs 2009-10 & 2010-11 are hereby dismissed." 14. The facts are identical which were not distinguished by the Ld. DR. So respectively, following the above said order, we are of the view that the CIT(A) has rightly held that this is not house property income as contemplated by the Assessing Officer and there is investment in land in the commercial property on wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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