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TMI Blog2023 (11) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... o remand the issue arising in ground No. 2, raised in assessee s appeal, to the file of AO for de novo adjudication after examining the aforesaid aspect and thereafter in light of CBDT Circular No. 28 dated 20/08/1969. Ground No. 2 raised in assessee s appeal is allowed for statistical purposes. Disallowing the interest expense - As argued property can be owned and enjoyed only by virtue of owning the shares and debentures as envisaged in the agreement as well as memorandum of association / article of association - whether cost of shares and debentures was part and parcel of the entire cost of property? - HELD THAT:- Shops no. 1 2 and 4 open car parking spaces along with B-class equity shares and fully convertible debentures of Ahura Chemical Products Pvt. Ltd. were sold to the assessee and consideration of Rs. 3,63,72,600 was paid by the assessee. However, before deciding on the validity of proportionate disallowance of the deduction of interest under section 24(b) of the Act, it is pertinent to analyse whether the term 'property u/s 24 also includes equity shares and fully convertible debentures, which were purchased by the assessee along with shops and open car parki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the above grounds of Appeal at the time or before the date of hearing. 3. The brief facts of the case as emanating from the record are: The assessee filed its return of income on 28/09/2008 declaring a total loss of Rs. 15,55,849. The return filed by the assessee was processed under section 143(1) of the Act and a refund of Rs. 4,61,390 was determined and issued to the assessee. Subsequently, the assessee filed a rectification application on the basis that the assessee has been allowed a lesser tax credit. Upon verification of the claim of the assessee, it was noticed as per computation of income, the gross annual value of the property let out was Rs. 43,48,917, whereas as per the TDS certificate issued by AXIS Bank Ltd, the rent received by the assessee was Rs. 47,78,312. Since income to the tune of Rs. 4,29,395 has escaped assessment, proceedings under section 147 of the Act were initiated and notice under section 148 of the Act was issued on 26/07/2010. In response to the aforesaid notice, the assessee filed a revised return of income declaring a loss from house property to the tune of Rs. 11,17,529. On verification of the return filed by the assessee, in response to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to claim a deduction of interest in respect of the second loan under section 24(b) of the Act. In respect of ground no.3, the learned AR submitted that the enjoyment, use, and occupation of the property are inextricably linked to the ownership of the shares and fully convertible debentures, therefore the bifurcation of the purchase consideration into the purchase of shops along with car parking and purchase of shares and debentures is incorrect and contrary to the facts on record. 6. On the contrary, the learned Departmental Representative vehemently relied upon the orders passed by the lower authorities. 7. We have considered the submissions of both sides and perused the material available on record. Since, at the outset, ground no.1 raised in assessee s appeal was not pressed. Therefore the same is dismissed as not pressed. 8. In the present case, the assessee purchased 2 shops admeasuring 1922 square feet each along with 4 open car parking spaces on the ground level of the building known as Ahura Centre Mahakali Caves Road, Andheri (East), Mumbai together with 4805 B-Class fully paid-up equity shares of Rs. 10 each and 1,50,072 unsecured fully convertible debent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the aforesaid aspect is necessary before determining whether the assessee is entitled to claim a deduction of interest paid on a loan taken for repayment of the earlier loan. Therefore, we deem it appropriate to remand the issue arising in ground No. 2, raised in assessee s appeal, to the file of AO for de novo adjudication after examining the aforesaid aspect and thereafter in light of CBDT Circular No. 28 dated 20/08/1969. Accordingly, ground No. 2 raised in assessee s appeal is allowed for statistical purposes. 9. Insofar as ground No. 3, raised in assessee s appeal, is concerned, we find that M/s Nishkalp Investment Trading Company Ltd. entered into an agreement dated 30/12/1998 with Ahura Chemicals Products Pvt. Ltd. for the purchase of 4816 B-class equity shares. From the perusal of the separate agreement dated 30/12/1998 amongst the aforesaid entities, forming part of the paper book from pages 94-125, we find that it was also agreed that the purchaser shall have the right to exclusively use and occupy the shops no.1 and 2 admeasuring 3844 sq.ft. on the ground floor together with 11 garages on the above basement level and 4 open car parking on the ground level of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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