Interest on delayed payment in connection of acquisition of property is allowed u/s 24 (b)

Brief of the Case

ITAT Delhi held In the case of Wel Intertrade Pvt. Ltd. vs. ITO that there is no dispute that for purchasing the property at Munirka for a consideration of Rs.9,37,33,600, the assessee had taken loan from HDFC Bank for Rs.6.50 crores on which the authorities below have allowed the interest paid by the assessee. The property was acquired w.e.f. 22-09-2005 from Lal Bhai Reality Finance Pvt. Ltd. and Rs.2,21,879 as interest was paid on the delayed payment. The said delayed payment out of the consideration was made on 10.2.2006. Thus, in our view, the interest paid at Rs.2,21,879 cannot be treated differently in comparison to the interest paid to the HDFC Bank as the very purpose for both the interest was to facilitate the payment of amount in consideration for acquisition of the property.

Facts of the Case

ITA No.2538/Del/2010

Disallowance of late payment of interest

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