S. 24(b)

M/s WINDERMERE PROPERTIES PVT LTD v DCIT ITA No.7192/Mum/2010 (Mum ITAT) Background: The assessee claimed deduction of Rs. 11.05 crore towards interest u/s 24(b) of the Income-tax Act, 1961 in the computation of income under the head “Income from house property”. On perusal of its details, the Assessing Officer noticed that it comprised of the interest of Rs. 9.48 crore and prepayment charges of Rs. 1.56 crore. The Assessing Officer held that the prepayment charges of Rs. 1.56 crore would not fall u/s 24(b) of the Act. Resultantly, the deduction was denied for such amount. No relief was allowed in the first appeal.

Prepayment charges on foreclosure is akin to interest – Mum ITAT