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TMI Blog2022 (7) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment order dated 31-12-2015 passed by the AO is erroneous and prejudicial to the interest of Revenue. 3. The brief facts of the case are that the assessee is an individual and engaged in managing family business. The assessee derived income from house property and business/profession during the year under consideration. The assessee filed return of income declaring a total income of Rs.15,65,600/- which was accepted by the AO vide its order dated 31- 12-2015 passed u/s. 143(3) of the Act. The PCIT having exercising jurisdiction u/s. 263 of the Act found the claim of deduction of interest of Rs.1,11,54,990/- on borrowed capital is not allowable and does not fit into the conditions laid down in section 24(b) of the Act. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our attention to Page No. 61 of the paper book. The ld. AR submits that the assessee availed loan from Reliance Home Finance Ltd. for Rs.8,68,50,000/- and paid interest @ 12.50% on such borrowed amount. He argued that the assessee is entitled to claim the said interest paid on such borrowed amount to an extent of Rs.1,22,59,620/- during the year under consideration under Clause (iii)(b) of section 27 of the Act. The ld. AR placed on record Circular 495 dated 22-09-1987 regarding the amendments at a glance in the Finance Act, 1987. for a total sum of Rs.9,99,00,000/- and drew our attention to Page No. 56 of the paper book. The assessee paid said amount to the statutory tenants and drew our attention to Page No. 61 of the paper book. The ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed jurisdiction u/s. 263 of the Act and without pointing out any defect in the assessment order held the assessment order is erroneous and prejudicial to the interest of Revenue is not justified and prayed to allow the grounds raised by the assessee. 6. The ld. DR, Shri Anurag Srivastava submits that the AO failed to examine any of the facts relating to deduction claimed in respect of interest paid on borrowed funds. The AO did not discuss anything in his order in this regard and no evidences in respect of such claim were referred to by the AO. Section 22 of the Act defines the income from house property and clause (iiib) of section 27 of the Act refers to section 269 UA of the Act. He referred to Para No. 5 of the impugned order and argue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued monthly rent receipts to statutory tenants 1 and 2 which is clear from Para C of the said agreement. In Para Nos. E and F establishes that they entered in to an agreement for the relinquishing of the statutory tenancy for agreed compensation of Rs.9,99,00,000/- shows that the said compensation paid for relinquishing the tenancy rights, in the sense, for bettering the title as rightly opined by the PCIT, not fitting in the conditions laid down u/s. 24(b) of the Act. Therefore, we are unable to accept the arguments of ld. AR that the statutory tenants is to be read as owner in terms of the provisions u/s. 27(iiib), Circular 495 dated 22-09-1987 and the finding of Hon'ble Supreme Court in the case of Podar Cement (P.) Ltd. (supra). Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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