DCIT, New Delhi V. M/s. Delhi Industries and Enterprises, New Delhi

ITA 1610/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97838 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 04-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAN KANT GARG
• Keywords: Proportionate interest

Judgement Text

1 ITA NO. 1610/DEL/2012 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI INTURI RAMA RAO A CCOUNTANT MEMBER AND SMT SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.- 1610/DEL/2012 (ASSESSMENT YEA R-2008-09) DCIT CIRCLE-30 (1), SRUM SHAPE BUILDING NEW DELHI (APPELLANT) VS DELHI INDUSTRIES AND ENTERPRISES 81, DARYA GANJ NEW DELHI AADFD2136P (RESPONDENT) APPELLANT BY SH. RAMAN KANT GARG, SR. DR. RESPONDENT BY SH. SALIL AGGARWAL, SANJEEV JAIN,SH. SHAILESH GUPTA, ADV. ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER 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-P AYMENT OF EARLIER LOAN. DATE OF HEARING 02 .11.2015 DATE OF PRONOUNCEMENT 04.11.2015 2 ITA NO. 1610/DEL/2012 3. THE ASSESSEE CONSTRUCTED A BUILDING AT A-44, MOH AN 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/-. TH E 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. 4. THE ASSESSEE FILED APPEAL AGAINST THE SAID ASSES SMENT ORDER AND IT WAS SUBMITTED BEFORE THE CIT(A) THAT THE ASSESSING OFFI CER WAS NOT JUSTIFIED TO MAKE THE DISALLOWANCE OF THE INTEREST WHICH WERE BASICAL LY 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 C ONSTRUCTION OF THE BUILDING AND LATER ON ANOTHER LOAN OF RS.4 CRORES W AS 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 FO R 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.1 6,35,065/- AS A DEDUCTION U/S 24 (B). THE ASSESSEE ALSO SUBMITTED THAT THE A SSESSEE PAID THE INTEREST PAYMENT OF RS.3,70,000/- TO SBI AND AS SUCH THE TOT AL DEDUCTION OF RS.20,05,065/- WAS CLAIMED WHICH IS ALLOWABLE AS PE R 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 Y EARS BY THE ITAT, DELHI VIDE ORDER DATED 31/10/2011 IN ITA NOS. 1464 & 1465, 153 4 & 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 ASSESSEES OWN CASE. 3 ITA NO. 1610/DEL/2012 5. 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 PAY MENT ON THE LOANS AS THE LOANS WERE TAKEN FOR THE CONSTRUCTION OF THE BUILDI NG AND ALSO FOR THE RE- PAYMENT OF THE OLD LOANS WHICH WERE TAKEN FOR THE C ONSTRUCTION OF THE BUILDING AND AS SUCH THE DEDUCTION OF INTEREST IS ALLOWABLE U/S 24B. THE SAID ITATS ORDER WAS CONFIRMED BY THE HONBLE DELHI HIGH COURT VIDE ORDER DATED 29/11/2012. 6. THE DR RELIED UPON THE ORDER OF THE ASSESSING OF FICER AND SUBMITTED THAT THE APPEAL BE ALLOWED. 7. THE AR SUBMITTED THAT THE SAID TRIBUNALS ORDER IN CASE OF ITA NOS. 1464, 1465, 1534 & 1535/DELHI/2010 DATED 31/10/2011 FOR T HE A. Y 2005-06 WAS UPHELD BY THE HONBLE HIGH COURT IN ASSESSEES OWN CASE AND THE PRESENT APPEAL IS ALSO GOVERNED BY THE SAID ORDERS. 8. 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 ASSESSEES OWN CASE FOR A. Y 2005-06 AS WELL AS THE HONBLE DELHI HIGH COURTS ORDER DATED 29/11/2012 AND FOUND THAT THE ISSUE CON TESTED HEREIN IS DECIDED IN FAVOUR OF THE ASSESSEE BY THE ITAT, NEW DELHI AS WELL AS HONBLE DELHI HIGH COURT. 9. IN RESULT, THE APPEAL IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 4 TH OF NOVEMBER, 2015. SD/- SD/- (INTURI RAMA RAO) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 04 /11/2015 R. NAHEED* 4 ITA NO. 1610/DEL/2012 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT R EGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 02.11.2015 PS 2. DRAFT PLACED BEFORE AUTHOR 02.11.2015 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .11.2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 28.10.2015 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 04.11.2015 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 5 ITA NO. 1610/DEL/2012