|
II. Direct Taxes Case Laws:
1. Priya Mahajan Vs. CIT, I.T.A. No. 384 of 2015, Date of Decision: 26.11.2015, Punjab & Haryana High Court
Whether
a person is entitled for the 100% deduction of the interest u/s 24(b)
of the Act of house loan when there are four co-owners in whose names
the house property has been purchased and assessee had solely re-paid
the entire interest and principal since the date of borrowing?
Held: No
Brief Fact
The assessee is an individual who filed her return at Income of Rs.
7,44,834/- and revised return of income at Rs. 3,08,663/-. The case was
taken up for scrutiny. The assessee claimed deduction of interest on
housing loan u/s 24(b) of the Act for the property. The AO made an
addition of 75% of the entire interest after allowing only 25% of the
total interest as deduction since there are four co-owners. Aggrieved by
the order, the assessee filed an appeal before the CIT (A) who
dismissed the appeal. Still dissatisfied, the assessee filed an appeal
before the Tribunal. The Tribunal dismissed the appeal affirming the
findings of the CIT(A) by observing that the plot in question was
purchased and the housing loan upon it had been taken jointly by four
persons, therefore, the allowable interest to the assessee was 25% of
the entire interest.
Further,
it was held that the AO as well as the CIT(A) were justified in holding
that since the individual shares were not specified in the sale deed,
the logical conclusion was that everyone had equal share in the
property. It was also recorded that, even, the assessee had failed to
produce any evidence on record regarding her claim that she alone had
invested for purchase of the house property.
Held:
The authorities below on appreciation of material on record have
concurrently recorded that the assessee was entitled to 1/4th deduction,
i.e. 25% of the entire interest. Learned counsel for the assessee was
not able to demonstrate that the approach of the authorities below was
erroneous or perverse or that the findings of fact recorded were based
on misreading or misappreciation of evidence on record. The view of the
Assessing Officer, the CIT(A) and the Tribunal is a plausible view based
on material on record which warrant no interference by this Court.
(Please click here for judgment)
2. Banihal Holdings Pvt. Ltd. Vs. ACIT, I.T.A. No. 256/2006, Date of Order: 22.02.2016, High Court of Gujarat
“Whether,
expenses incurred by the assessee on salary and other expenses for
maintaining its very corporate existence have to be apportioned between
the taxable and exempted income of the assessee?”
Held_Yes
Brief Facts
The assessee company had declared the loss of Rs.2.67 lacs during the
A.Y 2001-2002 and had shown a total income of Rs.73.75 lacs, out of
which only sum of Rs. 39,900/- was liable to income tax. Out of taxable
income of Rs. 39,900/- the assessee had claimed expenditure of Rs. 3.07
lacs comprising salary paid to the Company Secretary of Rs.2.91 lacs and
other miscellaneous expenses of Rs.16, 000 and remaining income was
exempt u/s 10 being either dividend income or agricultural income. The
Assessing Officer therefore, totally disallowed the expenditure and the
corresponding loss since the expenses incurred by the company had
primarily resulted in income which was exempt under section 10 of the
Act and, therefore, would not be allowable in terms of section 14A of
the Act.
Held
In our opinion, the CIT(Appeals) and the Tribunal committed no error.
The fact that virtually entire income of the assessee was exempt is not
in dispute. The fact that the assessee paid salary of Rs. 2.91 lacs to
the Company Secretary so engaged by the company is also not in dispute.
Merely because under the relevant provision of the Companies Act, it was
compulsory for the company to engage a Company Secretary, would not in
any manner change the fundamental facts. The salary paid to the Company
Secretary was for running the business of the company which principally
comprised of investment in shares and agricultural operations. The act
of engagement of Company Secretary was clearly for the purpose of
carrying on activities of the company, in absence of which, the company
would be breaching the legal requirement. That being the position, the
expenditure had to be apportioned between the taxable income and the
exempt income.
(Please click here for judgment)
|
New User? 
Subscribe Now