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Before: SHRI INTURI RAMA RAO & SMT SUCHITRA KAMBLE
ORDER PER SUCHITRA KAMBLE, JM
This appeal is filed by the Revenue against the order dated 11/1/2012 passed by Ld. CIT(A) XXV, New Delhi. 2. The grounds of appeal are as under:-
1. On the facts and in circumstances of the case, Ld. CIT(A) XXV, New Delhi has erred in allowing deduction of Rs.20,05,072/- u/s 24 of IT Act on the amount which was not utilized for construction/re-payment of earlier loan.
3. The assessee constructed a building at A-44, Mohan Co-operative Industrial Estate Mathura Road, New Delhi with the borrowed funds. During the year, the assessee offered the rental income of Rs.2,99,47,317/- and claimed the interest payment of Rs.20,05,072/-. The Assessing Officer disallowed the payment of interest relying on some earlier year orders on the ground that the interest has been paid on the loans which were taken to repay the old loans.
The assessee filed appeal against the said assessment order and it was submitted before the CIT(A) that the Assessing Officer was not justified to make the disallowance of the interest which were basically paid for the loans which were utilized for the construction of the building from which rental income is received. It was further submitted before the CIT(A) that earlier the loan of Rs.4.33 crores was taken from Canara Bank for the construction of the building and later on another loan of Rs.4 crores was taken from ING Vysya Bank for the construction of the building and also for the repayment of the old loans. Subsequently, another loan of Rs.5.5 crores was taken from SBI for the purpose of construction of the building and also for the repayment of the old loans. Later on another loan of Rs.3.25 crores was received from the Axis Bank during the A. Y 2008-09 to repay the SBI loan of Rs.2,26,67,234/- and the assessee claimed the proportionate interest of Rs.16,35,065/- as a deduction u/s 24 (b). The assessee also submitted that the assessee paid the interest payment of Rs.3,70,000/- to SBI and as such the total deduction of Rs.20,05,065/- was claimed which is allowable as per law. The assessee submitted that similar issue was also raised by the A.O in the earlier years and deduction was allowed to the assessee for all the years by the ITAT, Delhi vide order dated 31/10/2011 in & 1465, 1534 & 1535/Del/2010 as per Para-23 of the order and as such the appeal of the assessee was covered by the order of the ITAT in assessee’s own case.
Based on the order of the ITAT, the CIT(A) held that the A.O was not justified to deny the deduction of the interest payment on the loans as the loans were taken for the construction of the building and also for the re- payment of the old loans which were taken for the construction of the building and as such the deduction of interest is allowable u/s 24B. The said ITAT’s order was confirmed by the Hon’ble Delhi High Court vide order dated 29/11/2012.
The DR relied upon the order of the Assessing Officer and submitted that the appeal be allowed.
The AR submitted that the said Tribunal’s order in case of 1465, 1534 & 1535/Delhi/2010 dated 31/10/2011 for the A. Y 2005-06 was upheld by the Hon’ble High Court in assessee’s own case and the present appeal is also governed by the said orders.
We have perused all the records and proceedings and heard both the parties. We have gone through the orders passed by the ITAT Delhi Benches in assessee’s own case for A. Y 2005-06 as well as the Hon’ble Delhi High Court’s order dated 29/11/2012 and found that the issue contested herein is decided in favour of the assessee by the ITAT, New Delhi as well as Hon’ble Delhi High Court.
In result, the appeal is dismissed.
The order is pronounced in the open court on 4th of November, 2015.