USHA GIRISH DESHPANDE,MUMBAI vs. DCIT 23(3), MUMBAI
What did the Tribunal hold?
The Tribunal directed the AO to examine the assessee's claim for deduction of interest expenditure against house property income under Section 24. The disallowance under Section 40(a)(ia) was confirmed, but the deduction under Section 24 was to be considered.
What were the facts?
The assessee, an interior decorator, inadvertently claimed housing loan interest under the business head instead of against house property income. The AO disallowed this under Section 40(a)(ia) for non-deduction of TDS, and the CIT(A) confirmed it.
What were the issues?
Whether housing loan interest, inadvertently claimed under business income, can be allowed as a deduction against house property income. The applicability of Section 40(a)(ia) when TDS was not deductible.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(1)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- Goetze (India) Ltd. v. CIT1,842 citing283 ITR 323 · 2006 · SC
Income Tax Appellate Tribunal, “ F” BENCH, MUMBAI
सुनवधई की तधयीख / Date of Hearing :4.11.2015 घोषणध की तधयीख /Date of Pronouncement:4.11.2015 आदेश / O R D E R
Per B R Baskaran, AM:
The appeal filed by the assessee is directed against the order dated 26-03-2013 passed by Ld CIT(A)-34, Mumbai and it relates to the assessment year 2007-08.
At the time of hearing, the Ld A.R did not press ground no.2 relating to disallowance of consulting fee of Rs.15,000/-. Accordingly, the same is dismissed as Not Pressed. The remaining ground relates to the disallowance of Rs.1,48,345/- u/s 40(a)(ia) of the Act.
The Ld A.R submitted that the assessee is an interior decorator and undertakes contract works also. The assessee had availed housing loan and paid interest of Rs.1,48,345/-. He submitted that the said interest should have been claimed against House property income, but the same was inadvertently claimed under the business head. Since the assessee did not deduct tax at source u/s 194A of the Act, the assessing officer disallowed the same by invoking the provisions of sec. 40(a)(ia) of the Act and the Ld CIT(A) also confirmed the same. The claim of the assessee for allowing interest expenditure against the property income was not allowed by the tax authorities by following the decision rendered by Hon’ble Apex Court in the case of Goetze India Ltd (283 ITR 323). The Ld A.R submitted that the decision rendered by the Hon’ble Apex Court does not impinge the power of the Tribunal and accordingly prayed that the assessing officer may be directed to examine the claim of the assessee u/s 24 of the Act against the house property income.
The Ld D.R, on the contrary, placed strong reliance on the order of Ld CIT(A).
Having heard rival contentions, we are of the view that the claim of the assessee for deduction of interest expenditure against the house property income needs to be examined by the assessing officer, in the interest of natural justice. As submitted by Ld A.R, the decision rendered by the Hon’ble Supreme Court in the case of Goetze India Ltd (supra), as observed by the Hon’ble Apex in the same judgement, does not impinge the power of the Tribunal. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the assessing officer with the direction to examine the claim of the assessee u/s 24 of the Act. Since the interest expenditure has been admitted as personal expenses, the question of making TDS u/s 194A of the Act does not arise, but the same is required to be disallowed u/s 37(1) of the Act. Accordingly, we confirm the disallowance made by the assessing officer/Ld CIT(A) by invoking the provisions of sec. 37(1) and direct the assessing officer to examine the claim for deduction of the same u/s 24 of the Act.
In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.
Pronounced accordingly on 4th November, 2015. घोषणध खुरे न्मधमधरम भें ददनधंकः 4th Nov, 2015 को की गई । Sd sd
More judgments on Section 40(a)(ia)
- Rekha Agarwal, Jaipur vs ITO WD 4(1), JaipurITA 844/JPR/2025[2021-22]Status: Disposed21 Oct 2026AY 2021-22
- Cdg Petchem Limited, Hyderabad vs ITO, Ward - 1(1), HyderabadITA 1900/HYD/2025[2018-2019]Status: Disposed16 Oct 2026AY 2018-2019
- M/S. Shree Laminators Ltd., Kolkata vs DCIT, Circle 4(4), KolkataITA 1534/KOL/2026[2011-2012]Status: Disposed15 Oct 2026AY 2011-2012
- J.D. Marketing, Kolkata vs ITO, Ward 37(1), KolkataITA 1493/KOL/2026[2015-2016]Status: Disposed15 Oct 2026AY 2015-2016
- J.D. Marketing, Kolkata vs ITO, Ward 37(1), KolkataITA 1492/KOL/2026[2013-2014]Status: Disposed15 Oct 2026AY 2013-2014
Recent GST High Court judgments
Search GST case law →- Imtiyaz Shaikh Z Chorlekar vs. Salman ShaikhBombay · 21 Oct 2026
- Dr Babasaheb Ambedkar Marathwada University Thr Its Registrar Prashant S Amrutkar vs. Union Of INDIA Thr The Secretary And OthersBombay · 19 Oct 2026
- Babasaheb Ambedkar Marathwada University Thr Registrar Prashant S Amrutkar vs. Union Of INDIA Thr Secretary And OthersBombay · 19 Oct 2026
- Vinishma Technologies Private Limited vs. State Of KarnatakaKarnataka · 17 Oct 2026
- Vinishma Technologies Private Limited vs. State Of KarnatakaKarnataka · 17 Oct 2026