Scenario: I paid a sum of Rs. 1000000 as advance to purchase a house property in 2014. Meanwhile, I availed a housing loan to pay the same.Due to dispute, the agreement was revoked and the advance along with the interest was received in 2017. Also, I had been paying interest on Housing loan for these years. Now, I have two queries:
1. Should I offer the Interest on such returned advance as Income? 2. If I should offer the Income, can I set off the interest paid to housing loan against it? (Net can be offered?)
12 December 2017
Thank you sir. But, I assume that the interest earned can be set off with interest set off since if there was no housing loan availed, the whole event would not have happened. Is my opinion justified?
CAclubindia
