Loan repayment allowable as Application of Income If Cost of Assets purchased out of Loan was not allowed

Dr. Chandrashekar Foundation Vs CIT (ITAT Bangalore) With regard to issue relating to repayment of loan, we modify the direction of the CIT (Exemptions) and direct the A.O. to examine this claim afresh i.e. if the cost of assets acquired out of loan funds have already been allowed as application of income, then the repayment of loan should not be allowed as application. On the contrary, if the cost of assets purchased out of loan was not allowed as application of income, then the repayment of loan should be allowed as application of income. FULL TEXT OF THE ORDER OF ITAT BANGALORE The assessee...