Revision under section 263 fails where interest deduction claim was examined and accepted after inquiry, with supporting documents on record.

ITAT Delhi held that revision under section 263 was not justified where the Assessing Officer had examined the assessee's claim for interest deduction under section 24B and adopted a plausible view after inquiry. The revisional authority relied on alleged nondisclosure of assets and liabilities, use of borrowed funds for other purposes, non-furnishing of loan details, and non-reporting of the property in search proceedings, but the record showed that the property was acquired earlier and that loan documents, the lease deed, bank sanction letters, and the interest certificate had already been filed. As the claim had been specifically considered in assessment and reassessment proceedings, the order was neither inquiry-deficient nor prejudicial to revenue on the facts found, and the revision was quashed.

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Issues: Whether the revisionary order under section 263 was sustainable where the Assessing Officer had examined the assessee's claim of interest deduction under section 24B and had taken a plausible view after inquiry.

Analysis: The impugned revision was founded on the premise that the assessee had not disclosed assets and liabilities in earlier years, had used borrowed funds for other purposes, had not furnished loan details, and that the property was not reported before search. The record showed that the property had been acquired earlier, that the relevant return formats requiring asset and liability disclosure were not applicable for the earlier years relied upon by the revisional authority, and that the loan documents, lease deed, bank sanction letters, interest certificate, and other supporting material had already been placed before the Assessing Officer in the assessment and reassessment proceedings. The claim of interest under section 24B had been specifically examined and accepted in earlier and current assessment proceedings. In such circumstances, the revisional authority could not invoke section 263 merely because it preferred a different view, as the order could not be characterised as lacking inquiry or as being prejudicial to the interests of revenue on the facts found.

Conclusion: The revisionary order was unsustainable and was quashed, and the assessee succeeded.

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