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TMI Blog2025 (4) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... issued and served on the assessee. In response, ld. AR of the assessee attended and filed the requisite informations and documents. 4. During assessment proceedings, Assessing Officer observed that assessee has claimed loss of house property u/s 24(b) of the Act to Rs. 1,50,000/- being interest paid on loan taken for self occupied house property situated at D-107, Anand Niketan, New Delhi. The AO asked the assessee to give the complete details of loan taken for the aforesaid property along with necessary documents pledged with the bank at the time of sanction of the loan. The assessee furnished a copy of home loan sanctioned letter. AO observed from the sanctioned letter that the loan of Rs. 4,00,00,000/- was sanctioned by the bank on 28.09.2011 at interest 10.75% with floating rate for 185 months EMI. He further observed that during the year under consideration, the assessee paid interest totaling to Rs. 40,93,5l6/-. He further observed that out of total interest paid Rs. 1,50,000/- has been claimed u/s 24(b) of the Act and the balance amount of Rs. 39,43,516/- was claimed as deduction u/s 57 of the Act. 5. AO further noted that as per provision of section 24, the assessee can c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing. Besides the above statement, AO observed that no supporting documents in support of commission paid to any of the aforesaid parties have been furnished. On 28.01.2016, ld. AR of the assessee showed his inability to produce the aforesaid persons for examination. Accordingly, summons u/s 131 was issued to the aforesaid two persons. In response to the summons, Shri Sumit Hooda appeared on 08.02.2016 and recorded his statement. AO further issued summons u/s 131 on 29.01.2016 on the other person, Shri Dushyant but he did not appear and the assessee also showed his inability to produce him. In view of the above, AO observed that it is established that the transaction shown to have made by the assessee in respect of payment of commission with the aforesaid parties are not genuine, hence he disallowed and added the same to the total income of assessee. Accordingly, he assessed the income at Rs. 1,03,67,702/- by making additions of Rs. 39,43,516/- u/s 57 of the Act and disallowance of payment of commission amounting to Rs. 11,59,536/-claimed as expenditure u/s 57 of the Act. 8. Aggrieved with the above order, assessee preferred an appeal before the ld. CIT (A)-8, New Delhi. Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be empowered to utilize the loan amount as per its own convenience or in its Own business. Had there been such a scenario, then the Axis Bank, in all probabilities would have a loan which was either Loan Against Property' 'Commercial Loan', 'Business Loan', or any other loan (by whatever name called). 4.2 What all the appellant had not submitted: The appellant had not submitted the following information: * The copy of the board resolution as passed / recorded in the minutes book of the company, as fund raising has to be considered within the permissible borrowing limits as per the relevant provisions of the Companies Act, 1956 and / or Companies Act, 2013 and their relevant rules made thereunder. * The appellant had not submitted the copy of the loan application form as submitted to the Axis Bank. It is a common practice of the bankers, to include additional names as co-applicants, So that the chances of recoveries in the event of any default / NPA are better. In the absence of the loan applicant form, it is presumed that the co-applicant (.e. the company in which the appellant is a director) is merely for name sake and has no say in taking a call with re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he loan received was to advance it to the company / sister concern. More importantly, the appellant had claimed a deduction u/s 24(b) of the Act amounting to Rs. 1,50,000/- on account interest payment. If the submission of the appellant is accepted then, the appellant would not have claimed such deduction in his ITR filed. The action of the appellant itself shows that the appellant has availed a home loan facility, and that cannot be used for any other commercial of business purposes. To sum up, it is stated that the appellant had availed a home loan against the security of the property situated at Anand Hiketan, New Delhi. The said money though has been advanced further to the group company, however, the corresponding interest claimed u/s 67 could not be allowed in the light of the submissions made above It is for the appellant / in the hands of the appellant to utillze the loan money either for the purpose of home loan or for onward funding to a group company Therefore, I hold that the action of the AO is correct in disallowing the interest u/s 57 of the Act, as claimed by the appellant in the ITR. .................. 4.5 The next Issue is regarding disallowance of commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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