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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 ..... see is not entitled to claim interest as deduction u/s. 24(b). On perusal of the assessment order dated 31-12-2015 clearly shows there was no discussionor reference to deduction claimed and how deduction is allowed - AO had wrong assumption of facts and by applying incorrect law without due application of mind allowed claim of interest paid on borrowed capital u/s. 24(b) - Therefore, in our opinion, the PCIT correctly exercised its jurisdiction in holding the assessment order dated 31-12-2015 is erroneous and prejudicial to the interest of Revenue. Thus, we do not find any infirmity in the order of PCIT and it is justified and the grounds raised by the assessee are dismissed. - ITA No.667/PUN/2018 - - - Dated:- 15-7-2022 - SHRI S.S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment proceedings. Further, it was argued the order passed by the AO is not erroneous and prejudicial to the interest of Revenue. Considering the same, the PCIT held that the heads of expenditure for computation of income under the head income from house property is exhaustive u/s. 23 and 24 of the Act, the deduction cannot be claimed from out of the annual value if particular type of expenditure is not specifically provided u/s. 24 of the Act, having held the same, the PCIT further held that the AO has not acted in accordance with law in allowing the deduction on the amount of interest paid to the statutory tenant for vacating the property and assessment order thereon is erroneous and prejudicial to the interest of Revenue. Having aggr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 5. The ld. AR by referring to Para No. 23.2 of the said circular argued that the legislature extended definition of the expression of ownership for the purpose of transactions covered by section 269UA of the Act and by inserting sub-clause (iiib) covers all the transactions for the purpose of determining the ownership of the property. He argued that it is a statutory tenant Mr. Erani is the legal owner fitting into the definition of sub-clause (iiib) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee availed loan to pay the same to statutory tenant which is not the condition laid down in section 24(b) of the Act to claim deduction. The PCIT rightly held that this aspect was not examined by the AO during the course of original assessment proceedings and supported the order of PCIT. He prayed to dismiss the appeal of the assessee. 7. Heard both the parties and perused the material available on record. We note that the assessee purchased scheduled mentioned property vide Deed of Apartment on 06-09-2001 which is evident from Page No. 43 wherein the assessee has been addressed as purchaser and the sellers being Z.M. Investments and Traders Pvt. Ltd. and J.P. Hotels Pvt. Ltd. Further, the agreement for the relinquishing/surrendering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from Reliance Home Finance Limited for Rs.8,68,50,000/- and paid interest thereon @ 12.50%. Admittedly, the said borrowed loan was paid to statutory tenants in pursuance of relinquishing deed dated 05-04-2011. The PCIT held the interest paid on such borrowed amount does not fit into provisions of clause (b) of section 24 of the Act. The PCIT reproduced the said provisions in the impugned order at Para No. 6. On plain reading the said clause (b) of section 24 of the Act explains that the deduction is allowable where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital. In the present case, as discussed above the agreement at Page No. 42 clearly shows that the assessee purchased the said prope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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