SUMIT AGGARWAL Vs. DEPUTY COMMISSIONER OF INCOME TAX
LAWS(IT)-2014-5-56
INCOME TAX APPELLATE TRIBUNAL
Decided on May 20,2014

Appellant
VERSUS
Respondents

JUDGEMENT

T.R.SOOD,AM. - (1.) THIS appeal has been filed by the assessee against the order dated 3.1.2014 of CIT(A) -II, Ludhiana.
(2.) IN this appeal assessee has raised the following grounds: 1. That on the facts and circumstances and in law, the Hon'ble Commissioner of Income Tax - Appeals II, Ludhiana [CIT(A)] erred in concluding that the appellant , a resident individual assessee, is not liable to offer the overseas rental income of Rs. 7,32,731/ - to tax in India, thereby disallowing (Rs. 5,52,490) computed under the head Income from House Proper ty in accordance with the relevant provisions of the Income Tax Act , 1961 (or "Act ) . 2. That on the facts and circumstances and in law, the Hon'ble CIT(A) erred in placing reliance on the decision of the Hon'ble Supreme Court in the case of CIT v. P.V.A.L. Kulandagan Chettiar to hold that the income / (loss) arising to the appellant from property situated in Australia is taxable / (allowable) only in Australia without appreciating the provisions of sections 4 and 5 of the Act as applicable to a resident assessee. 3. That on the facts and circumstances, the Hon'ble CIT(A) erred in not appreciating that the rental income of Rs. 7,32,731/ - is the gross amount of rent received and thus erroneously directing the Assessing Officer to determine the correct gross rent received.
(3.) AFTER hearing both the parties we find that in this case the assessee has filed a return declaring income of Rs. 24250550/. This included loss from house property was computed. The loss in house property was computed because the payment of interest to ANZ Bank, Australia amounting to Rs. 1043207/ -. The assessee has purchased the property in Australia which was already on rent and obtained a loan from ANZ Bank Australia. The Assessing officer observed that in view of Sec 25 which prescribed that interest will not be allowed if interest is payable outside India which is chargeable to tax in India and tax has not been deducted. Since the assessee had not deducted the tax, therefore possible income from the property was assessed to tax after ignoring claim of the interest. On appeal it was mainly submitted that property purchased in India was already on residential tenancy agreement vide agreement dated 13.1.2004. A loan was sanctioned by ANZ Bank Australia as home loan. It was further pointed out that reference to Sec 5 & 9 (I)(v)(b), the interest would not accrue or arise in India.;


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