2018 (3) TMI 890

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....pany is earning rental income. During the previous year relevant to Assessment Year 2012-13, the only source of income of the assessee is from house property and they have filed return of income on 9.9.2012 declaring a total income of Rs. 12,67,588/- . Ld. AO called for the details and after considering the material, accepted the returned income. 3. However, on examination of the record, ld. PCIT noticed that the assessee claimed deduction of a sum of Rs. 20,23,641/- in respect of the interest payable u/s 24(b) of the Act, but the learned AO has not obtained and placed on record any details of documents on that aspect. Further, according to the ld. PCIT copies of the ledger account of unsecured loans from related parties do not show any ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... to the ld. PCIT while passing the impugned order, but without considering the same ld. PCIT set aside the matter for de novo framing of the assessment and such an action cannot be sustained. 6. Per contra, it is the submission of 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 shall be deemed to be erroneous insofar as it is prejudicial to the interest of revenue. Since the impugned order was passed on 8.3.2017, the amended provision is applicable to the facts of this case. Basing on this he submitted that AO should have satisfied himself with reference....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the documents and details sought by the Ld. AO were furnished by the assessee and after considering them only the assessment order was passed. On a perusal of the said letter at page No 6 of the paper book, we find that vide column No. 2 of the letter they have submitted that as per their accounting practice the interest paid is not credited to the ledger account of the creditors and the amount is directly debited to "interest paid account" and TDS directed is credited to "TDS payable account" and a payee account only checks are made out for the balance payable and all these entries are verifiable from the bank statement of account submitted by them. It is also stated therein that they have enclosed the bank statement for the ready referen....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the non declaration of the income from the other property is prejudicial to the interest of the revenue. 10. Now coming to the aspect of payment of interest to the director is concerned, page no.5 to 11, 13 to 19, 24-30 and 34-41 of the paper book dated 28.2.2018 are the TDS returns of the assessee for all the quarters of the relevant years and page nos.12, 20 to 23, 31 to 33 and 40 to 45 are the receipts of the bank evidencing the payment of TDS. According to the ld. AR it was submitted before the ld. CIT(A) that as per accounting practice the interest paid is not credited to the ledger account but was directly debited to the interest paid account and the TDS deducted is credited to the TDS payable account. When we look at this submiss....