Subha Singhvi, Faridabad vs Assessee

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. ITA No.691/Del/2014 2

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.

The decision was pronounced in the open court on 19th June,

2015.

Sd/-

(R.S. SYAL) ACCOUNTANT MEMBER Dated: 19th June, 2015.

dk

Copy forwarded to

1. Appellant

2. Respondent

3. CIT

4. CIT(A)

5. DR Dy. Registrar, ITAT, New Delhi