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TMI Blog2023 (1) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... IT office as per the IT Park Policy of the Government of Maharashtra. Thus, it is evident that the property in respect of which the assessee claimed interest under section 24(b) of the Act is only a commercial property, and therefore the restriction on deduction as provided in 2nd proviso to section 24(b) of the Act shall not be applicable. Therefore, we are of the considered view that the AO has erred in restricting the deduction of interest paid on the loan to Rs.2 lakh vide intimation issued under section 143(1) of the Act. AO while computing the annual letting value of the aforesaid property had granted deduction of interest paid on loan under section 24(b) of the Act. Accordingly, we direct that the interest of Rs.1,31,39,560, paid on the loan for acquiring the above property be allowed as a deduction under section 24(b) of the Act. Since the assessee is entitled to claim the entire interest paid during the year on loan for acquiring the above property, therefore, the amount of loss under the head income from house property , which is not set off against the income under the other head of income be allowed to be carried forward as per provisions of section 71B - Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed let out property and allow deduction for interest paid Rs.1,31,39,560/-. B. CHANGING CHARACTER OF PROPERTY FROM DEEMED LET OUT TO SELF- OCCUPIED PROPERTY, WITHOUT AUTHORITY 6. On the facts and in the circumstances of the case and in law, the learned CIT (A) has erred in confirming action of the Deputy Commissioner of Income Tax, CPC (the DCIT) in altering the nature of the said premises from Deemed Let out to Self-occupied, which is beyond the scope of adjustment permitted by Section 143(1)(a) of the Act. 7. In view of the above, the Order of the CIT(A) be quashed, by holding it to be bad in law. C. CONFIRMING ADJUSTMENT MADE IN THE ORDER U/S.143(1) WITHOUT EXAMINING WHETHER THE PRESCRIBED PROCEDURE SET OUT IN THE INCOME TAX ACT 1961 WAS FOLLOWED OR NOT 8. On the facts and in the circumstances of the case and in law, the learned CIT (A) has erred in confirming the adjustment made by the Deputy Commissioner of Income Tax, CPC (the DCIT ) without examining whether the procedure set out in first and second proviso to Section 143(1Xa) of the Act was followed in the case of the Appellant. 9. In view of the above, the Order u/s 143(1) and Order u/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Thereafter, the assessee filed a revised return of income on 23/02/2017, declaring a total loss of Rs. 1,08,81,242, after setting off and carrying forward of loss from house property. The revised return of income filed by the assessee was processed under section 143(1) of the Act vide intimation dated 28/05/2017, whereby the total income of the assessee was computed at Rs. 20,58,230 and set off of current year loss was restricted to Rs.2 lakh and carry forward of balance loss under the head income from house property amounting to Rs.1,08,81,242, was denied. 5. Separately, vide application dated 28/11/2017, filed under section 154 of the Act, the assessee sought rectification of intimation issued under section 143(1) of the Act on the basis that interest under section 24(b) of the Act was allowed only to the extent of Rs.2 lakh, however, the assessee does not have any self-occupied property for the year under consideration. The Assessing Officer, CPC, vide order dated 17/04/2019, passed under section 154 of the Act dismissed the rectification application filed by the assessee. 6. In the appeal against the intimation issued under section 143(1) of the Act, the learned CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nent to note the provisions of the Act, which are relevant for the determination of the issue raised in the present appeal. Section 24 of the Act, during the relevant year, read as under: 24. Income chargeable under the head Income from house property shall be computed after making the following deductions, namely:- (a) a sum equal to thirty per cent of the annual value; (b) where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital: Provided that in respect of property referred to in sub-section (2) of section 23, the amount of deduction shall not exceed thirty thousand rupees : Provided further that where the property referred to in the first proviso is acquired or constructed with capital borrowed on or after the 1st day of April, 1999 and such acquisition or construction is completed within three 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause no. (mm) that the said property can only be used for the purpose of setting up the IT office as per the IT Park Policy of the Government of Maharashtra. Thus, it is evident that the property in respect of which the assessee claimed interest under section 24(b) of the Act is only a commercial property, and therefore the restriction on deduction as provided in 2nd proviso to section 24(b) of the Act shall not be applicable. Therefore, we are of the considered view that the AO has erred in restricting the deduction of interest paid on the loan to Rs.2 lakh vide intimation issued under section 143(1) of the Act. We further find from the assessment orders for assessment years 2015 16 and 2017 18, forming part of the paper book from pages No. 77 91, that the AO while computing the annual letting value of the aforesaid property had granted deduction of interest paid on loan under section 24(b) of the Act. Accordingly, we direct that the interest of Rs.1,31,39,560, paid on the loan for acquiring the above property be allowed as a deduction under section 24(b) of the Act. Since the assessee is entitled to claim the entire interest paid during the year on loan for acquiring the above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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