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2021 (7) TMI 139 - AT - Income TaxRevision u/s 263 - assessee had claimed the interest on loan as deduction u/s. 24(b) of the Act under the Head ‘Income from House Property” in the return of income of the preceding assessment years prior to the sale of the capital asset/flat - HELD THAT:- According to Ld. PCIT the AO has erred in allowing the claim of deduction of interest by passing the assessment order dated 29.11.2018 but we do not agree with the PCIT. The assessee has not claimed in the preceding assessment years starting from AY 2006-07 to AY 2015-16 deduction of the interest u/s. 24(b). As carefully gone through the ITR Acknowledgements filed by the assessee from AYs 2006-07 to AY 2015-16 and the computation of total income, Balance Sheet and Ledger account of the interest of housing loan which are placed and thus we find that the Ld. PCIT has erroneously made the finding that the assessee has claimed deduction of interest from AYs 2007-08 to 2015-16 and, this finding of fault/allegation that the AO by allowing the deduction of interest expenses has committed is erroneous act is not sustainable. The interest expenses as not an expenses on transfer of asset as erroneously observed by the Ld. PCIT. It is part of the cost of acquisition of the asset and not expenses related to sale of flat. PCIT’s observation that the assessee was showing loss from self occupied house property is also factually wrong/erroneous because it is baseless again flowing from imagination - we find that the Ld. PCIT’s impugned order cannot be sustained since he has assumed facts which was not borne out of any material/document and is contrary to the material/evidence on record. Therefore, the assessee succeeds. We note that in this case the AO had issued u/s. 142(1) of the Act dated 26.11.2018 and has enquired about the details of sale of flat and LTCG etc. by asking question regarding the cost of acquisition of purchase and cost of improvement with evidence in the case of flat sold and pursuant to which the assessee had replied vide letter dated 29.11.2018 placed along with supporting evidence wherein the assessee had filed the computation of LTCG as well as the breakup of the interest which he had capitalized in the AY 2016-17 to the tune - Thus, we note that the AO had enquired about the issue of LTCG on sale of flat and has discharged his duty as on investigation and cannot be faulted; and allowing the interest expenditure (capitalized) and which becomes part of the cost of acquisition in the facts of this case is allowable, and is a plausible view and so it cannot be held erroneous and at any rate be held un-sustainable view in law. We hold that the very usurpation of jurisdiction by Ld. Principal CIT to invoke his revisional powers enjoyed u/s 263 of the Act is invalid/absent, so the action of Ld PCIT is without jurisdiction and consequently the impugned order of the Ld. PCIT is quashed. Appeal of assessee is allowed.
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