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TMI Blog2003 (11) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... s capital borrowed by the assessee for construction of the flat and, therefore, the interest paid thereon is liable to be deducted u/s 24(1)(vi) - Held the amount so paid by the assessee to the purchaser was not interest payable on any borrowed capital with which the construction of the said flat was made - payment made by the assessee to the purchaser on his failure to deliver the flat within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Surendra Overseas Ltd., with which M/s. Sagar Shipping Co. Ltd. had since been amalgamated. It is contended by the appellant that income out of the business transaction should be assessed as business income and the interest amount of Rs. 6,74,602 should be deducted from the business income. This deduction has been claimed under section 24(1)(vi) of the Income-tax Act, 1961. The two assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is that the amount paid to the assessee for purchase of the flat was utilised for construction of the flat and has to be treated as capital borrowed by the assessee for construction of the flat and, therefore, the interest paid thereon is liable to be deducted under section 24(1)(vi). Learned counsel relied on the judgment in the case of CIT v. Parekh Kothi Ltd. [1986] 160 ITR 864 (Cal). On b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouse property.-(1) Income chargeable under the head 'Income from house property' shall, subject to the provisions of sub-section (2), be computed after making the following deductions, namely:-... (vi) where the property has been acquired, constructed, repaired, renewed, or reconstructed with borrowed capital, the amount of any interest payable on such capital." Therefore, it appears that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are of the opinion, that the amount so paid by the assessee to the purchaser was not interest payable on any borrowed capital with which the construction of the said flat was made. The Tribunal has come to a finding that there is no material on which a contrary finding could be arrived at. The payment made by the assessee to the purchaser on his failure to deliver the flat within the stipulated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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