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2018 (3) TMI 890

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..... , without adverting to the circumstances and material pleaded by the assessee, Ld. CIT has recorded a finding that the AO has not called for and taken on record all the necessary details of the Ld. assessing officer has not even examined the bank statements of the assessee company to see whether the interest was paid to the directors or whether the tedious was directed or not. Further, when the explanation was offered by the assessee wide letter dated 08/02/2017, Ld. CIT recorded a finding that the details as to whether the loans were utilized for the purpose of construction at 3, Kapashara estate the rented property or the other property. All the details were available before the Ld. CIT. In the circumstances, we find that the exercise of .....

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..... y of claim of interest against the rental income and also recorded that it was not clear from the record whether the loan amount was utilized for carrying on construction on the related property or adjacent property. 4. After hearing the assessee, ld. PCIT reached a conclusion that the assessment framed by the ld. AO is erroneous and prejudicial to the interest of revenue inasmuch as the ld. AO has not called for and taken on record all the necessary details, has not even examined the bank statement of the assessee company to see whether the interest was paid to the directors or whether the TDS was deducted on that or not, and has not sought any detail as to whether the loans were utilized for the purpose of construction at 3, Kapashera .....

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..... ted house and the reason for not showing the income from the other property, but the ld. AO did not make any enquiries or verification on this aspect which had a bearing on the tax liability of the assessee. Further, the ld. AO did not make any enquiry in respect of the bank statement of the assessee company to find out whether the interest was paid to the directors and if so, TDS was deducted or not. 7. We have gone through the record in the light of the submissions on either side. We are in agreement with the ld. DR that after insertion of explanation 2 in Section 263 of the Act by Finance Act, 2015 w.e.f. 1.6.2015, where the assessment order was passed without making enquiries or verification which should have been made, such an order .....

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..... e the Ld. assessing officer and that the property belonging to the company at Kapashara is a single property which has for the convenience been divided by the assessee, the interest-free loan from M/s relationship private limited pertains to the portion 3A, Kapashara estate and interest-bearing loans pertains to the rented portion 3, commercial real estate and the interest thereon has been correctly climbed and allowed against the interest received. It is further stated in this letter that the property had been given to Mr Sameer Gupta, director of the company for his residence who in turn has declared it in his return and there was no occasion for the assessee to return the annual value. Assessee further stated in this letter that this was .....

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..... in the light of the TDS statements and the bank receipts, it does not leave any doubt in our mind that there is no non examination of bank statement of the assessee for verification of payment interest to the directors or that it is prejudicial to the interest of the revenue. As a matter of fact, all these documents along with the audit reports are available before the authorities below. 11. In view of the above, we re of the considered opinion that there was no want of enquiries on the part of the Ld. assessing officer and as a matter of fact all the relevant material was submitted before the Ld. CIT also. However, without adverting to the circumstances and material pleaded by the assessee, Ld. CIT has recorded a finding that the Ld. a .....

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