Case Law Details
Bhaveshkumar Vinodbhai Patel Vs ACIT (ITAT Ahmedabad)
In the case of Bhaveshkumar Vinodbhai Patel vs. ACIT, the Income Tax Appellate Tribunal (ITAT) Ahmedabad addressed an appeal filed by the assessee challenging the order of the Commissioner of Income Tax (Appeals)-11 [CIT(A)] for the assessment year 2017-18. The primary issue involved the disallowance of Rs. 7,58,826 as excess interest on a loan taken from Kotak Bank, claimed under Section 24 of the Income Tax Act. The assessee argued that the CIT(A) upheld the Assessing Officer’s (AO) decision without providing sufficient opportunity to present evidence supporting the claim.
The Tribunal reviewed the facts, including the loan structure involving five borrowers and the 50% interest deduction claimed by the appellant. It noted that in similar cases for assessment years 2016-17 and subsequent years, the Revenue Authorities had allowed the interest deduction after proper scrutiny. The Tribunal found consistency in the repayment records and observed no basis for disallowing the interest deduction for the current year. Consequently, the appeal was allowed, emphasizing the importance of consistency and proper examination in tax assessments.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This is an appeal filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad [CIT(A)] vide order dated 19/04/2023 passed for the Assessment Year (AY) 2017-18.
2. The grounds of appeal taken by the assessee are as under:-
1. In law and on the facts and in the circumstances of the case, the order u/s 250 of the Act passed by the Ld. CIT (A) is without providing sufficient opportunity of being heard to the appellant.
2. In law and in the facts and circumstances in the case of the appellant, the Ld. CIT(A) has grossly erred in upholding addition of Rs. 7,58,826/ made in order passed u/s 143(3) on account of disallowance of excess interest on loan taken from Kotak Bank, claimed by the appellant while computing income from house property.
3. The appellant craves leave to add to alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal.
3. Brief facts of the case are that the assessee has filed his e-return of income on 12/03/2018 for the year under consideration. Declaring total income of Rs.19,36,140/-. The assessee is having in respect of income for rented property against which the assessee has claimed 50% of the loan interest u/s.24 of the Income Tax, Act, 1961 (“the Act”). The Assessing Officer recomputed the income from house property restricting the deduction of interest to 20% on the ground that the housing loan was sanctioned to 5 persons.
4. We have heard both the parties and perused the material available on We find that the CIT(A) upheld the order of the AO as the assessee has not submitted any details to substantiate the claim of 50%. The similar matter has come up before the AO in the AY 2016-17 and during the course of proceedings u/s.148 of the Act, after due examination ,the interest claimed by the assessee has been allowed. It was also brought to our notice that the similar allowance has been made by the Revenue Authorities in the subsequent year. It is also a fact on record that the repayments have been made by the assessee. Hence, keeping in view, the orders of the Revenue Authorities for the earlier years as well as the succeeding years, we hold that no disallowance during the instant year is called for.
5. In the result, the appeal of the assessee is allowed.
Order pronounced in the Court on 22nd November, 2024 at Ahmedabad.
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