CHANDRASHEKHAR J. THAKKAR,MUMBAI vs. ASST CIT 16(2), MUMBAI

This is an appeal filed by the assessee and is directed against the order of the Ld. CIT(A)-5, Mumbai dated 1.9.2015 pertaining to A.Y.2010-11.

Only issue raised in the grounds of appeal is against the confirmation of disallowance of interest of Rs.2,87,562/- by the ld.CIT(A) as made by the AO on account of interest paid on term loan on the ground that the said loan was sanctioned under home loan category.

Facts of the case are that the assessee filed his return of income on 14.10.2010 declaring total income at Rs.1,00,46,860/-. Thereafter, scrutiny proceedings were initiated against the assessee and statutory notices under section 143(2) and 142(1) were issued and served upon the assessee. During the course of assessment proceedings, the AO found that the assessee has charged a sum of Rs.2,87,562/- to the Income and Expenditure Account which related to the housing loan raised by the assessee and was not disallowed at the time of filing of return of income by the assessee suo motto and accordingly disallowed and added the same to the income of the assessee by framing the assessment order u/s 143(3) dated 5.3.2013 assessing the total income at Rs.1,01,73,826/- by making various other disallowances. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A) and argued that the assessee had two loans from Standard Chartered Bank ,one of Rs.1,28,52,038/- which was housing loan and second of Rs.17,91,782/- which was term loan. The ld. AR before the first appellate authority submitted that the AO has wrongly considered second term loan of Rs. 17,91,781/- as housing loan also on the basis of a letter which mentioned that the loan as home loan product and consequently disallowed the interest of Rs.2,87,562/- on the said term loan. The ld. CIT(A) also dismissed the appeal of the assessee by observing and holding as under: “6. I have considered the appellant submissions appellant had two loans in Standard Chartered Bank one is Housing loan and other one Term loan. According to appellant Term loan is for Rs.17,91,782/- and which A.O. had disallowed. Interest claim of the appellant for Rs.2,87,562/- considering it as Housing loan. However, appellant had submitted the performance during the appellant proceedings and on the papers of the sanctioned letter of the Housing loan and Term loan, it is mentioned as Housing Product Loan so it is clear from the submissions of the appellant that these loans are in the nature of Housing loan. Hence A.O.'s addition is confirmed. Ground of appeal is dismissed.”