Assessee is entitled to deduction of interest payable by him on capital charge only and not additional interest
Shew Kissen Bhatter [1973] 89 ITR 61 (SC)
Interest paid on interest levied by bank, because of non-payment of instalments of borrowed capital to bank, does not qualify for an admissible deduction Of interest on housing loan
Naman Kumar [2014] 41 taxmann.com 10 (Punjab & Haryana) 21-12-2013
INTEREST ON MONEY BORROWED FOR HOUSE PROPERTY IS TO BE ALLOWED ONLY IN RESPECT OF FIRST OR SECOND LOAN AND NOT FOR ANY SUBSEQUENT LOAN
SATYA CO. LTD [1986] 19 ITD 596 (CAL.)
The words ‘such capital’ used in section 24( 1)(vi) definitely refers to the borrowed capital and as such the section confines the benefit to the borrowed capital, i.e., original loan only. The language is not capable of being extended to any second or subsequent loan. No doubt, that the aforesaid Board’s circular refers to the second loan to which the provision of the section was extended by this Board’s circular. But it could not be extended to subsequent loans as contended by the assessees. Therefore, the Commissioner (Appeals) was incorrect in holding that the test laid down in section 24(1)(vi) was that the loan should have been taken to acquire the property and it did not say whether it was the first loan or second loan or subsequent loans.
Deduction of Interest u/s 24(b) has to be allowed for loan utilized to repay the earlier raised housing loan
Circular : No. 28 [F. No. 8/8/69-IT(A-I)], dated 20-8-1969.
Akulu Nagaraj Gupta Subbaraju [2017] 86 taxmann.com 38 (Bangalore – Trib.)(SMC)
Sunil Kumar Agarwal [2012] 20 taxmann.com 330 (Lucknow)
Explanation 5 to Section 32 was specifically made applicable w.e.f. April 1, 2002 and was, therefore, prospective in nature.
| (i) | Commissioner of Income-Tax v. Kerala Electric Lamp Works Ltd. & Anr. [2003] 261 ITR 721, | |
| (ii) | Commissioner of Income Tax v. Sree Senhavalli Textiles P. Ltd. [2003] 259 ITR 77 and | |
| (iii) | Shri Ram Nath Jindal and Shri Jaghjiwan Ram v. The Commissioner of Income-Tax, Haryana, Rohtak [2001] 252 ITR 590 |
Declaratory amendments like “explanation “ inserted to a section are retrospective in nature
(i) CIT, Bombay v. M/s Gwalior Rayon Silk Manufacturing Co. Ltd. [1992] 3 SCC 326
(ii) Commissioner of Income Tax v. M/s Alps Theatre AIR 1967 SC 1437 = [1967] 3 SCR 181
(iii) Commissioner of Income Tax-I, Ahmedabad v. Gold Coin Health Food Private Limited [2008] 9 SCC 622
For Computation of profit linked deductions under Chapter VI-A, depreciation has to be mandatorily reduced even for assessment years prior to Finance Act 2001 inserting Explanation 5 to Section 32
Supreme Court’s own judgment in Mahindra Mills 243 ITR 56 which was sought to be nullified by above amendment can not help assesse in escalating profits because
(Para 18)”………….. Mahendra Mills was rendered while construing the provisions of Section 32 of the Act, as it existed at the relevant time, whereas we are concerned with the provisions of Chapter VI-A of the Act. Marked distinction between the two Chapters, as already held by this Court in the judgments noted above, is that not only Section 80-IA is a code by itself, it contains the provision for special deduction which is linked to profits. In contrast, Chapter IV of the Act, which allows depreciation under Section 32 of the Act is linked to investment. This Court has also made it clear that Section 80-IA of the Act not only contains substantive but procedural provisions for computation of special deduction. Thus, any device adopted to reduce or inflate the profits of eligible business has to be rejected. The assessees/appellants want 100% deduction, without taking into consideration depreciation which they want to utilise in the subsequent years. This would be anathema to the scheme under Section 80-IA of the Act which is linked to profits and if the contention of the assessees is accepted, it would allow them to inflate the profits linked incentives provided under Section 80-IA of the Act which cannot be permitted………………”
Plastiblends India Ltd. [2017] 86 taxmann.com 137 (SC) 09-10-2017
In order to entitle the assessee to earn exemption, it is not enough to allege or show that the land was once an agricultural land at the time of its acquisition and that the assessee should further prove that it was agricultural land at the time of transfer.
Kalpetta Estates Ltd. v. Commissioner of Income Tax [1990] 185 ITR 318
Having obtained Permission to sell the land not cultivated for 4 years and agreements with housing societies the Apex Court accepted the contention of the Revenue that the land was not an agricultural land when it was sold.
Smt. Sarifabibi Mohmed Ibrahim and others v. Commissioner of Income Tax, Gujarat [1993] 204 ITR 631 (SC)]