Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (8) TMI 686 - AT - Income TaxRevision u/s 263 by CIT - claim for deduction of interest expenditure - interest expenditure on the capital borrowed for purchase /acquisition of the property - HELD THAT:- There would be no gainsaying that as per the ‘Proviso’ to Sec. 36(1)(iii) of the Act, verification of the fact as to when the aforesaid new property, viz. Property Nos. 1001 and 1702 at Brindavan Terrace, Mumbai was occupied and put to use by the assessee for the purpose of his profession was indispensably required to have been done by the A.O for determining of the interest expenditure on the capital borrowed for purchase /acquisition of the said property, that would be allowable as a deduction, which we find he had failed to do. Apart from that, we concur with the Pr. CIT that the A.O had also failed to verify the claim of the assessee that the balance amount of interest expenditure pertained to the loans that were raised by the assessee for acquiring/purchasing the other three office premises of his at South Mumbai, Delhi and Chembur in the earlier years. As regards the claim of the ld A.R that the A.O in the course of the assessment proceedings had duly verified the assessee’s claim for deduction of the interest expenditure, we are unable to persuade ourselves to accept the same. As is discernible from the reply dated 04.02.2017 filed by the assessee in compliance to the queries that were raised by the A.O u/s 142(1), dated. 29.01.2017, we find, that the assessee had therein only furnished the bifurcated details of the interest expenditure with reference to the banks/financial institutions from whom the same were raised. We are of a strong conviction that no infirmity emanates from the order passed by the Pr.CIT, who had rightly observed that the A.O without verifying the assessee’s claim for deduction of interest expenditure had summarily accepted the same on the very face of it. Our aforesaid conviction is fortified by the ‘Explanation 2(a)’ to Sec. 263 of the Act, as per which, where an order is passed by an A.O without making an inquiry and verification which in the opinion of Principal Commissioner or Commissioner should have been made, the order therein passed by him shall be deemed to be erroneous in so far it is prejudicial to the interest of the revenue. We, thus, are of the considered view that the Pr.CIT had rightly set-aside the assessment order passed by the A.O u/s 143(3), dated 18.03.2020, with a direction to him to pass a fresh assessment order after considering the aforesaid issue and allowing an opportunity of being heard to the assessee - Appeal filed by the assessee is dismissed.
|