INCOME TAX OFFICER Vs. DEVMANI ATHA

JUDGEMENT

(1.) IT Appeal Nos. 74 to 76 (Ctk.) of 1984 have been filed by the department and relate to the assessment years 1974-75 to 1976-77. IT Appeal Nos. 102 to 105 (Ctk.) of 1984 are by the assessee and relate to the assessment years 1977-78 to 1980-81.

(2.) the house property to which the dispute relates originally belonged to the assessees father-in-law Shivaji Nathubhai and devolved on the assessee under a will. Shivaji Nathubhai carried on business in tendu leaves. For the purpose of carrying on this business he created an equitable mortgage in respect of the house property in favour of the United Commercial Bank, Sambalpur on 4-8-1955 for taking a loan of Rs. 2,82,500 for payment of bills and hundis. Shivaji Nathubhai expired on 2-3-1964 and the will executed by him was duly probated. For the assessment years 1974-75 to 1976-77, the assessing ITO allowed deduction of the interest payable under this mortgage against the house rent receivable from the house property with the following observation :

(3.) On appeal, the AAC accepted the contention of the assessee that the mistake, if any, was not a mistake apparent from record and as such could not be rectified under section 154 and she set aside the orders of the ITO for the assessment years 1974-75 to 1976-77. However, in respect of the assessments for the other assessment years she agreed with the ITO that the interest claimed by the assessee as annual charge is not allowable under section 24(1) (iv) and dismissed the assessees appeals.