COMMISSIONER OF INCOME TAX Vs. HARYANA TELEVISION LTD.

JUDGEMENT

(1.) This appeal has been filed by the revenue under Section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 28.9.2007 (Annexure A-III) passed by the Income Tax Appellate Tribunal, Delhi Bench "C", New Delhi (hereinafter referred to as "the Tribunal") in ITA No. 2212/DEL/2004 for the assessment year 1997-98.

(2.) A few facts necessary for disposal of the present appeal as narrated therein are that the assessee filed its return of income on 28.11.1997 for the assessment year 1997-98 declaring the income at Rs. 3,81,405/-. The assessee was having rental income of Rs. 15,12,000/- and claimed deduction of Rs. 10,00,000/- from the said income under Section 24(1)(vi) of the Act. The Assessing Officer vide assessment order dated 26.11.1999 (Annexure A-I) disallowed the said deduction as the assessee had not purchased/constructed any building from the funds on which the interest was paid. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), Faridabad [hereinafter referred to as "the CIT(A)"]. The CIT(A), Faridabad vide order dated 5.3.2004 (Annexure A-II) while partly accepting the appeal of the assessee upheld the disallowance of Rs. 10,00,000/- under Section 24 (1)(vi) of the Act. Being dissatisfied with the order, Annexure A-II, the assessee filed the appeal before the Tribunal, who vide order dated 28.9.2007 (Annexure A-III) allowed the appeal and set aside the finding of the CIT(A) by holding that the assessee was entitled to deduction under Section 24(1)(vi) of the Act. Hence, the present appeal by the revenue.

(3.) Learned counsel for the revenue submitted that the claim of the assessee that interest on loan was deductible under Section 24(1) (vi) of the Act was erroneous. The loan was not taken for the purposes of purchase of land and construction and in such a situation, Section 24 (1)(vi) of the Act was not attracted as the amount was not utilized for acquisition, renewal, repair, construction or reconstruction of the property.