ITA No. 691/DEL/2014
This appeal by the assessee is directed against the order passed by the CIT(A) on 18.11.2013 in relation to the Assessment Year 2008-09.
2. The only issue raised in this appeal is against the confirmation of disallowance of foreclosure charges amounting to Rs.4,30,008/- paid by the assessee to ICICI Bank housing loan as interest u/s 2(28A) of the Income-tax Act, 1961 (hereinafter also called ‘the Act’)
3. Briefly stated, the facts of the case are that the assessee earned rental income from certain properties and claimed deduction for interest on loan amounting to Rs.29,89,223/-. On perusal of the interest certificate given by the bank, it was noticed by the AO that out of such total interest, the assessee paid Rs.4,30,008/- as foreclosure charges on prepayment of loan to ICICI Bank. The AO did not allow deduction for this sum in the computation of income under the head ‘Income from house property.’ The ld. CIT(A) affirmed the view taken by the AO.
4. I have heard the rival submissions and perused the relevant material available on record. I find that the issue raised in this appeal is directly covered by an order passed by the Mumbai Bench of the Tribunal in Windermere Properties (P) Ltd. Vs. DCIT (2013) 155 TTJ (Mum) 1. In this case, the Tribunal has held that prepayment charges made for early disposal of loan are deductible as interest u/s 24(b) in ITA No.691/Del/2014 3 the computation of income under the head ‘Income from house property.’ As the facts and circumstances of the instant case are, mutatis mutandis, similar to those considered and decided by the Mumbai Bench of the Tribunal, respectfully following the precedent, I overturn the impugned order and order for the grant of deduction of foreclosure charges amounting to Rs.4,30,008/- u/s 24(b) in the computation of income under the head ‘Income from house property.’
5. In the result, the appeal is allowed.
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