Devinder Ajmani Vs Assessing Officer (ITAT Delhi)
ITAT Delhi Restores Section 57(iii) Interest Claim: Rule of Consistency to Be Examined
The Delhi SMC Bench of the ITAT set aside the order of the NFAC/CIT(A) and restored the issue relating to deduction under section 57(iii) in the case of Devinder Ajmani (AY 2020-21). The assessee, a Director in a private company, had borrowed funds (including a home loan) at a lower interest rate and advanced the same to the company, claiming deduction of interest as expenditure incurred for earning income from other sources.
While the Assessing Officer allowed deduction in respect of Loan Against Property (LAP) accounts, the claim relating to the home loan account was disallowed solely on the ground that it was categorized as a housing loan. The Tribunal noted that on identical facts, deduction under section 57(iii) on interest paid on the home loan had been allowed in earlier assessment years.
Holding that the matter required verification from past records, the ITAT remanded the issue back to the AO with a clear direction that if deduction under section 57(iii) was allowed in earlier years, the same should be allowed in the impugned year as well, following the rule of consistency. Accordingly, the assessee’s appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT DELHI
