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Facts
The assessee sold an immovable property and declared a capital loss. The assessee claimed the indexed cost of acquisition and the indexed cost of improvement, which included home loan interest. The Assessing Officer disallowed the indexed cost of improvement claimed under section 48, considering it a double deduction along with the deduction claimed under section 24(b) for home loan interest.
Held
The Tribunal held that the claim of deduction for home loan interest under section 24(b) and its inclusion as part of the indexed cost of improvement under section 48 do not constitute a double deduction of the same amount. The assessee is entitled to claim the remaining housing loan interest paid as an indexed cost of improvement after accounting for the deduction already claimed under section 24(b).
Key Issues
Whether claiming home loan interest as a deduction under section 24(b) and also as part of the indexed cost of improvement under section 48 amounts to double deduction.
Sections Cited
48, 24(b), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: Shri Sanjay Garg & Shri Bijayananda Pruseth
Year : 2017-18 Bipinbhai Chhaganbhai The ITO बनाम/ Jodhani Ward-3(3)(1) 21, Swetrajhans Society Surat – 395 001 v/s. Khodiyar Nagar Road Varachha Road Surat – 395 006 �थायी लेखा सं./PAN: ADDPJ 9297 Q (अपीलाथ�/ Appellant) (�� यथ�/ Respondent) Assessee by : Shri Mehul Patel, AR Revenue by : Shri Mukesh Jain, Sr.DR सुनवाई की तारीख/Date of Hearing : 07/04/2025 घोषणा की तारीख /Date of Pronouncement: 03/07/2025 आदेश/O R D E R
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] dated 28/06/2024 passed u/s.250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year (AY) 2017-2018.
2 2. The assessee has raised the following grounds of appeal:
(1) That on facts, in law, and on evidence on record, the learned National Faceless Appeal Centre (NEAC) has grievously erred in confirming the disallowance of claim of Indexed cost of Improvement of Rs.30,01,463/- made u/s 48 of the Act, while computing the Long Term Capital Gains. (2) That on facts, in law, and on evidence on record, it ought to have been held that the appellant has not claimed any double deduction of Interest and the claims made u/s 24 and 48 of the Act are independent and mutually exclusive. (3) The appellant craves leave to add, alter, amend any ground of appeal.”
The brief facts of the case are that the assessee had filed his e-return of income on 15/03/2018 declaring total income of Rs.1,41,100/- for the year under consideration. The case was selected for scrutiny assessment through CASS under limited category.
3.1. During the course assessment proceedings, the AO noticed that the assessee had sold an immovable property for Rs.1,60,00,000/- and shown capital loss of Rs.8,22,012/-. In the computation of capital gain/loss the assessee had claimed Indexed cost of acquisition of Rs.1,38,20,549/- and Indexed cost of improvement of Rs.30,01,463/-. The details of property and computation was as under:- Particular of Sale Indexed Indexed cost Capital gain Property Price/year Cost/year of improvement Flat No.604, 1,60,00,000/- 1,38,20,549/- 30,01,463/- (-)8,22,012/- Mota Nagar, 01/10/2016 22/12/2010 CHS Ltd. D Building, Andheri Kurla Road Andheri
3 Mumbai – 400 099
The AO observed that the assessee had also claimed deduction of interest paid on home loan u/s.24(b) of the Act over the years. He observed that the assessee has also claimed deduction of interest paid on home loan as cost of improvement u/s.48 of the Act. The AO noted that it was a case of claim of double deduction, firstly, u/s.24(b) of the Act and then u/s.48 of the Act, of the same amount. He accordingly disallowed the claim of the assessee u/s.48 of the Act of Rs.30,01,463/- claimed by the assessee as cost of improvement on account of interest paid on home loan and made the impugned additions.
In appeal, the Ld.CIT(A) confirmed the additions made by the AO.
We have heard the rival contentions and gone through the record. The Ld. Counsel for the assessee has submitted that, it was not a case of claim of double deduction. He, in this respect, relied upon the following chart:
Appellant has claimed secured loan interest expense year-wise in following manner A.Y. Total Housing Claim u/s.24b Claim u/s.48 Loan Interest Indexed Cost of improvement A.Y.2012-13 6,33,092/- 1,50,000/- 4,83,092/- A.Y.2013-14 7,60,042/- 1,50,000/- 6,10,042/- A.Y.2014-15 6,80,996/- 1,50,000/- 5,30,996/- A.Y.2015-16 6,45,820/- 1,50,000/- 4,45,539/- A.Y.2016-17 5,63,178/- 1,50,000/- 3,63,178/-
4 The Ld.Counsel for the assessee has submitted that out of the total housing loan interest paid by the assessee has claimed deduction u/s.24(b) of the Act to the extent admissible, which was Rs.1,50,000/- per year. That, the assessee has claimed deduction u/s.48 of the Act, in respect of the remaining of amount of interest paid on home loan. He, therefore, has submitted that the deduction claimed u/s.24(b) of the Act has been deducted, while claiming Indexed cost of improvement u/s.48 of the Act, out of the total home loan paid. He, therefore, has submitted that it was not a case of claim of double deduction of the same amount.
The Ld. Departmental Representative, however, has relied upon the orders of the lower authorities.
It is not disputed that the assessee is entitled to claim of interest paid on housing loan as Indexed cost of improvement. The only objection raised by the lower authorities is that the assessee having claimed deduction u/s.24(b) of the Act was not permitted to claim deduction u/s.48 of the Act, at all even in respect of one remaining amount which was not part of deduction claimed u/s.24(b) of the Act. We do not agree with the aforesaid contention of the Ld. Departmental Representative. It is not a case of double deduction of the same amount. The assessee, in this case, has claimed deduction over the years u/s.24(b) of the Act, upto the extent of admissible amount, i.e. Rs.1,50,000/- out of total housing loan interest paid ranging from Rs.5 lakhs to 8 lakhs approximately. No doubt, the assessee is not entitled to double deduction on the same amount, however, there is no provision under the Act, barring the claim of deduction of the remaining of housing loan interest paid after deducting the amount for which deduction has already been claimed u/s.24(b) of the Act. We, therefore, restore the issue to the file
5 of the AO to verify the claim of the assessee and allow the Indexed cost of improvement to the assessee of the balance amount, after subtracting the amount of deduction already claimed u/s.24(b) of the Act over the years.
In the result, the appeal of the assessee is treated as allowed for statistical purposes.
Order pronounced in the Open Court on 03/07/2025.