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Income Tax Appellate Tribunal, DELHI ‘G’ BENCH,
Before: SHRI H.S. SIDHU, & SHRI N.K. BILLAIYA
PER N.K. BILLAIYA, ACCOUNTANT MEMBER,
This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals) - 8, New Delhi dated 14.01.2015 pertaining to assessment year 2011-12.
The sum and substance of the grievance of the assessee is that the CIT(A) erred in confirming the disallowance of interest claimed as deduction u/s 24 of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short].
Briefly stated, the facts of the case are that the assessee filed her return of income on 23.12.2009 declaring total income of Rs. 30,46,417/-. The return was selected for scrutiny assessment through CASS and accordingly, statutory notices were issued and served upon the assessee. While scrutinising the return of income, the AO noticed that the main source of income is income from house property. The AO found that the assessee has claimed interest of Rs. 20,82,640/- as deduction u/s 24 of the Act.
The AO was of the opinion that since the assessee has not taken loan for the property against which the interest is claimed, she is not eligible for deduction u/s 24 of the Act. Accordingly, Rs. 20,82,640/- was disallowed. The assessee carried the matter before the CIT(A) but without any success.
Before us, the ld. AR vehemently stated that no fresh loans were taken during the year under consideration. The loans on which the interest payment has been claimed pertains to earlier years and in earlier years claim of deduction of interest has been allowed by the AO. Therefore, the same should be allowed for the year under consideration also.
Per contra, the ld. DR strongly supported the findings of the AO.
We have carefully considered the orders of the authorities below. We find force in the contention of the ld. Counsel. No fresh loans have been taken during the year under consideration. We find that a similar issue arose in A.Y 2007-08 and when the matter was agitated before the CIT(A), the CIT(A) found that the interest was paid on the loan taken from the banks only for commercial property. Therefore, proviso to section 24 of the Act is not applicable. Disallowance made by the AO was deleted.
8. Similar view was taken in A.Y 2008-09. We find that when a similar payment of interest in earlier years has been allowed by the Revenue, a different view taken during the year under consideration is not justified. We, accordingly, direct the AO to delete the impugned disallowance.
In the result, the appeal of the assessee in is allowed.
The order is pronounced in the open court on 27.06.2018.