SH. AMARJEET SINGH,NEW DELHI vs. CIT, NEW DELHI

The grounds of appeal are as follows:-

During this year the assessee has claimed deduction of Rs.2,96,333/- against income from other sources as interest paid to Ms. Madhu Bhandari on the loan taken from her amounting to Rs.70 lakhs. The assessee has himself submitted during the course of hearing that the said loan was utilized for giving advances to parties for booking of space and return of earlier business loan used for booking of space. Out of this loan the assessee had given advances for booking of space amounting to Rs.20 lacs to M/s ABV Infrastructure Ltd Rs. 10 lakhs invested in M/s S.M. & Sons as capita; Rs. 5 lakhs paid to M/s Global Communication for space. And the remaining amount has been used for repayment of loan to Bank. The assessee has not earned any interest on the amount advanced for booking of space. Moreover, it is not the business of the assessee. Since amount has been utilized for booking of space and the assessee has also surplus funds with him which he had advanced for properties. The assessee had advanced an amount of Rs.3,71,36,022/-. Since the assessee has not earned any interest on the amount advanced which is his surplus funds, it is not the business of the assessee i.e. booking flat and selling them on profit, the interest of Rs.2,96,333/- on the loan borrowed from Ms. Madhu Bhandari is not an allowable expenses and no deduction for the same can be allowed against “Other income”.

The Commissioner of Income Tax under Section 263 of the Income Tax Act, 1961 held that the assessment order u/s. 143 (3) of the Act dated 12.02.2013 was erroneous so far as it is prejudicial to the interest of revenue and cancelled the same and directed the Assessing Officer to frame afresh.

The Ld. AR submitted that there was no new material found by the CIT while passing the order under Section 263 of the Act. The particulars of acquired property for buildings along with documents were submitted and placed before the Assessing Officer and thus all the aspects of the assessee taken into account at the time of assessment proceedings.

The Ld. DR submitted that the order under Section 263 of the Act passed by the CIT is just and proper.

We have heard both the parties and perused the relevant documents. It is pertinent to note that the total income of the assessee was computed as Rs.11,16,290/- u/s 288A of the Act. The Assessing Officer while passing Assessment Order under Section 143(3) of the Act has taken cognizance of the necessary documents/details filed by the Assessee during the assessment proceedings. The Assessing Officer in Assessment Order noted that the income of the assessee consists of salary, house property, share of profit from firm and other sources and verified the same. The CIT while passing the order under Section 263 of the Act has not shown any new material or has not come to the conclusion that there is escapement of income during the assessment proceedings. The particulars of acquired property at Regal buildings along with documents were submitted and placed before the Assessing Officer and thus all the aspects of the income of the assesee was taken into account at the time of assessment proceedings. The CIT cannot take different view on the same material available to the Assessing Officer. There is no such power u/s 263 of the Act to the Commissioner of Income Tax. In result order u/s 263 of the Act does not survive.

In the result, appeal of the assessee is allowed.