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2014 (4) TMI 428 - AT - Income TaxClaim of interest on borrowed amount – Amount paid to another sister concern - Revision of order by CIT u/s 263 – Held that:- Assessee did borrow funds to pay M/s. Salivahana Associates for completion of the building, which was leased out - there is no diversion of funds as alleged by the CIT - there is no other activity for the assessee except owning 50% share of the property which was leased out - since assessee is owning the property of 50% of the share of the building and lease rent was also offered accordingly on the same area, finding by CIT that the supplementary agreement is not a real deed is not based on record - these aspects were examined by the A.O. in A.Y. 2005-06 which was the first year, of not only rental income but also claim of interest on the borrowed funds, the observations of the CIT cannot be upheld – the opinion of the CIT is not based on the facts on record and AO examined the issue and given a finding that assessee owns 50% of the constructed area – thus, the CIT has not exercised the jurisdiction correctly – the order of the CIT set aside – Decided in favour of Assessee.
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