Piyush Mohan Agarwal, Kolkata V. PCIT-1, Kolkata

ITA 136/KOL/2021

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2445 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-06-2021
• Assessment Year: 2016-2017
• Appeal Filed On: 16-04-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Revision of order; Principle of natural justice; Cost of acquisition; Corroborative evidences; Assessment record; Set aside
• Section: 6; 263; 142(1); 48; 73; 20

Judgement Text

1 ITA NO. 136/KOL/2021 PIYUSH MOHAN AGARWAL, AY 2016-17 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA [BEFORE SHRI J. SUDHAKAR REDDY, AM AND SHRI A. T. VARKEY, JM] I.T.A. NO. 136/KOL/2021 ASSESSMENT YEAR: 2016-17 PIYUSH MOHAN AGARWAL (PAN: ACMPA9009P) VS. PRINCIPAL COMMISSIONER OF INCOME- TAX, KOL-1, KOLKATA. APPELLANT RESPONDENT DATE OF HEARING (VIRTUAL) 17.06.2021 DATE OF PRONOUNCEMENT 23.06.2021 FOR THE APPELLANT SHRI S.K. TULSIYAN, ADVOCATE FOR THE RESPONDENT SHRI VIJAY SHANKAR, CIT ORDER PER SHRI A. T. VARKEY, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. PCIT, KOLKATA-1 DATED 24.03.2021 PASSED U/S 263 OF INCOME TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2016-17. 2. THE LD. A.R. FOR THE ASSESSEE SHRI S.K. TULSIYA N, ADVOCATE DREW OUR ATTENTION TO THE LEGAL CHALLENGE WHICH HE HAS RAISED AGAINST THE IMP UGNED ACTION OF THE LD. PCIT INVOKING THE REVISIONAL JURISDICTION U/S 263 OF THE ACT WITH OUT SATISFYING THE CONDITION PRECEDENT AS PRESCRIBED U/S 263 OF THE ACT I.E. WITHOUT VALIDLY FINDING THAT THE AOS ORDER IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 3. BRIEF FACTS OF THE CASE AS NOTED BY THE LD. PCIT ARE THAT IN THE INSTANT CASE, THE ASSESSMENT WAS COMPLETED AT A TOTAL INCOME OF RS.29 ,44,430/-. IT WAS NOTED BY HIM FROM THE ASSESSMENT RECORD OF AY 2016-17, THAT THE ASSESSEE HAD SOLD A RESIDENTIAL FLAT/APARTMENT ON 18.11.2015 AT A COST OF RS.1,64,00,000/- AND HAD CO MPUTED LONG TERM CAPITAL GAIN (LTCG) OF RS.4,07,178/- TAKING THE DATE OF ACQUISITION OF THE SAID PROPERTY AS ON 19.03.2006. THE LD. PCIT NOTED THAT IN THE COMPUTATION OF LTCG, THE ASSESSEE HAD DEBITED AN AMOUNT OF RS.30,38,124/- ON ACCOUNT OF EXPENSES MADE DIRECTLY RELATED TO SALE OF FLAT. ACCORDING TO 2 ITA NO. 136/KOL/2021 PIYUSH MOHAN AGARWAL, AY 2016-17 HIM, THE AMOUNT OF RS.30,38,124/- WAS PAID ON ACCOU NT OF REPAYMENT OF HOUSING LOAN OF RS.50,00,000/- AVAILED FOR PURCHASE OF THE AFORESAI D FLAT; AND THE LD. PCIT ACKNOWLEDGED THAT THE ASSESSEE HAD FURNISHED RELEVANT INTEREST C ERTIFICATE FOR EACH F.Y. WITH THE SUBMISSION MADE DURING ASSESSMENT PROCEEDINGS. HOWEVER ACCORDI NG TO LD. PCIT IT APPEARS FROM THE RECORDS THAT THE ASSESSEE ALSO HAD AVAILED BENEFIT OF DEDUCTION U/S. 24(B) OF THE ACT TOWARDS INTEREST PAID ON HOUSING LOAN IN THE PRECEDING ASSE SSMENT YEARS PRIOR TO THE SALE OF CAPITAL ASSET. ACCORDING TO HIM, SECTION 48 OF THE ACT DOES NOT ALLOW AN ASSESSEE TO AVAIL INTEREST PAID ON HOUSING LOAN TO BE DEDUCTED WHILE COMPUTING LTCG ON SALE OF CAPITAL ASSET SINCE THE EXPENSES ON INTEREST PAID IS NOT RELATED TO SUC H TRANSFER. THUS, ACCORDING TO LD. PCIT IN THIS CASE, ASSESSEE APPEARS TO HAVE AVAILED DOUBLE DEDUCTION OF INTEREST ON HOUSING LOAN FIRSTLY AT THE TIME OF FURNISHING RETURN OF INCOME EVERY Y EAR UNDER THE HEAD INCOME OF LOSS FROM SELF OCCUPIED HOUSE PROPERTY AND SECONDLY AT THE TIME OF COMPUTING LTCG AS CLAIMING THE SAME INTEREST AS DIRECT EXPENSES RELATED TO TRA NSFER OF CAPITAL ASSET. ACCORDING TO LD. PCIT THE AO SHOULD HAVE DISALLOWED THE CLAIM OF DED UCTION OF RS.30,38,124/- ON ACCOUNT OF EXPENSES DIRECTLY RELATED TO TRANSFER OF CAPITAL ASSET. THE LD. PCIT PRIMA FACIE FOUND THAT THE OMISSION TO DISALLOW THE ABOVE DEDUCTION RESULT ED IN UNDER ASSESSMENT OF INCOME TO THE TUNE OF RS.30,38,124/- U/S.48 OF THE ACT. ON THE A FORESAID REASON/FAULT THE LD. PCIT ISSUED SHOW CAUSE NOTICE (SCN) TO THE ASSESSEE CONVEYING H IS DESIRE TO EXERCISE HIS REVISIONAL JURISDICTION AGAINST THE ASSESSMENT ORDER PASSED BY THE AO DATED 29.11.2018. AND AFTER GOING THROUGH THE REPLY OF THE ASSESSEE WHICH HAS B EEN REPRODUCED BY THE LD. PCIT AS PARA 4 OF HIS IMPUGNED ORDER, BEING NOT SATISFIED WITH T HE REPLY HELD AS UNDER: 5. I HAVE CONSIDERED THE FACTS OF THE CASE AND GO NE THROUGH THE SUBMISSION OF THE ASSESSEE AND THE DETAILS AVAILABLE ON RECORD. ON PERUSAL OF THE ASSESSMENT RECORD AND ASSESSMENT ORDER, IT IS OBSERVED THAT THE ASSESSEE SOLD A RESI DENTIAL APARTMENT ON 18.11.2015 AT A COST OF RS.1,64,00,000/- AND COMPUTED LONG TERM CAPITAL GAI N (LTCG) OF RS.4,07,178/- AS THE DATE OF ACQUISITION OF THE SAID PROPERTY WAS ON 19.03.2006. IN THE COMPUTATION OF LTCG, THE ASSESSEE DEBITED AN AMOUNT OF RS.30,38,124/- ON ACCOUNT OF E XPENSES MADE DIRECTLY RELATED TO SALE OF FLAT. THE AMOUNT OF RS.30,38,124/- WAS PAID ON ACCO UNT OF REPAYMENT OF HOUSING LOAN OF RS.50,00,000/- AVAILED FOR PURCHASE OF THE AFORESAI D FLAT AND THE ASSESSEE FURNISHED RELEVANT INTEREST CERTIFICATED FOR EACH F.Y. WITH THE SUBMIS SION MADE DURING ASSESSMENT PROCEEDINGS. IT APPEARS FROM THE RECORDS THAT THE ASSESSEE ALSO AVA ILED BENEFIT OF DEDUCTION U/S. 24(B) OF THE I T ACT, 1961 TOWARDS INTEREST PAID ON HOUSING LOAN I N THE PRECEDING ASSESSMENT YEARS PRIOR TO THE SALE OF CAPITAL ASSET. THE SECTION 48 OF THE I T ACT, 1961 DOES NOT ALLOW AN ASSESSEE TO AVAIL INTEREST PAID ON HOUSING LOAN TO THE DEDUCTED WHILE COMPUTING LTCG ON SALE OF CAPITAL ASSET SINCE THE EXPENSES ON INTEREST PAID IS NOT RELATED TO SUCH TRANSFER. IN THIS CASE, ASSESSEE APPEARS TO HAVE AVAILED DOUBLE DEDUCTION OF INTERES T ON HOUSING LOAN FIRSTLY AT THE TIME OF FURNISHING RETURN OF INCOME EVERY YEAR UNDER THE HE AD INCOME OF LOSS FROM SELF OCCUPIED 3 ITA NO. 136/KOL/2021 PIYUSH MOHAN AGARWAL, AY 2016-17 HOUSE PROPERTY AND FURTHER AT THE TIME OF COMPUTING LTCG AS CLAIMING THE SAME INTEREST AS DIRECT EXPENSES RELATED TO TRANSFER OF CAPITAL ASSE T. THE ASSESSEE HAS FAILED TO COMPLETELY DISCLOSE ITS TRUE AND CORRECT INCOME BY NON-FURNISH ING OF DETAILS AS REQUIRED UNDER PROVISIONS OF THE I.T. ACT, 1961. THE A.O. HAS PASSED THE ASSE SSMENT ORDER WITHOUT MAKING ENQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE IN THE INS TANT CASE. CLAUSE (A) & (B) OF EXPLANATION 2 TO SECTION 263(1) ARE ATTRACTED IN THIS CASE. AC CORDINGLY, IT IS HELD THAT THE ASSESSMENT ORDER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE IN TEREST OF REVENUE. AND THEREAFTER HE WAS PLEASED TO SET ASIDE THE ASSE SSMENT ORDER AND DIRECTED THE AO TO FRAME THE ASSESSMENT AFRESH. AGGRIEVED BY THE AFOR ESAID ACTION OF THE LD. PCIT THE ASSESSEE IS BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. BEFORE WE ADVERT TO THE FACTS AND LAW INVOLVED IN THIS LIS BEFORE US, LET US REVI SE THE LAW GOVERNING THE LEGAL ISSUE RAISED BEFORE US. THE ASSESSEE HAS CHALLENGED IN THE FIRST PLACE, THE VERY USURPATION OF JURISDICTION BY LD. PRINCIPAL CIT TO INVOKE HIS REVISIONAL POWER S ENJOYED U/S 263 OF THE ACT. THEREFORE, FIRST WE HAVE TO SEE WHETHER THE REQUISITE JURISDIC TION NECESSARY TO ASSUME REVISIONAL JURISDICTION IS THERE EXISTING BEFORE THE PR. CIT T O EXERCISE HIS POWER. FOR THAT, WE HAVE TO EXAMINE AS TO WHETHER IN THE FIRST PLACE THE ORDER OF THE ASSESSING OFFICER FOUND FAULT BY THE PRINCIPAL CIT IS ERRONEOUS AS WELL AS PREJUDICIAL T O THE INTEREST OF THE REVENUE. FOR THAT, LET US TAKE THE GUIDANCE OF JUDICIAL PRECEDENCE LAID DO WN BY THE HONBLE APEX COURT IN MALABAR INDUSTRIES LTD. VS. CIT [2000] 243 ITR 83(S C) WHEREIN THEIR LORDSHIP HAVE HELD THAT TWIN CONDITIONS NEEDS TO BE SATISFIED BEFORE EXERCISING REVISIONAL JURISDICTION U/S 263 OF THE ACT BY THE CIT. THE TWIN CONDITIONS ARE THAT TH E ORDER OF THE ASSESSING OFFICER MUST BE ERRONEOUS AND SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN THE FOLLOWING CIRCUMSTANCES, THE ORDER OF THE AO CAN BE HELD TO B E ERRONEOUS ORDER, THAT IS (I) IF THE ASSESSING OFFICERS ORDER WAS PASSED ON INCORRECT A SSUMPTION OF FACT; OR (II) INCORRECT APPLICATION OF LAW; OR (III)ASSESSING OFFICERS ORD ER IS IN VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE; OR (IV) IF THE ORDER IS PASSED BY THE ASSE SSING OFFICER WITHOUT APPLICATION OF MIND; (V) IF THE AO HAS NOT INVESTIGATED THE ISSUE BEFORE HIM;[ BECAUSE AO HAS TO DISCHARGE DUAL ROLE OF AN INVESTIGATOR AS WELL AS THAT OF AN ADJU DICATOR ]THEN IN AFORESAID ANY EVENT THE ORDER PASSED BY THE ASSESSING OFFICER CAN BE TERMED AS ERRONEOUS ORDER. COMING NEXT TO THE SECOND LIMB, WHICH IS REQUIRED TO BE EXAMINED AS TO WHETHER THE ACTIONS OF THE AO CAN BE TERMED AS PREJUDICIAL TO THE INTEREST OF REVENUE. W HEN THIS ASPECT IS EXAMINED ONE HAS TO 4 ITA NO. 136/KOL/2021 PIYUSH MOHAN AGARWAL, AY 2016-17 UNDERSTAND WHAT IS PREJUDICIAL TO THE INTEREST OF T HE REVENUE. THE HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIES (SUPRA) HELD THAT TH IS PHRASE I.E. PREJUDICIAL TO THE INTEREST OF THE REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. THEIR LORDSHIP HELD THAT IT HAS TO BE REME MBERED THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. WHEN THE ASSESSING OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS TO THE REVENUE, OR WHER E TWO VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER HAS TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF THE REVENUE UNLESS THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW. KEEPING THE AFORESAID LEGAL PRINCIPLE IN OUR MIND LET US EXAMINE THE IMPUGNED ORDER OF THE LD. P CIT AS TO WHETHER THE CONDITION PRECEDENT AS LAID DOWN BY THE HONBLE SUPREME COURT IN MALABAR INDUSTRIAL CO. LTD. VS. CIT REPORTED IN [2000] 243 ITR 83 (SC) IS SATISFIED OR NOT. 5. KEEPING THE CASE LAWS DISCUSSED (SUPRA) WHEN WE EXAMINE THE LEGAL ISSUE RAISED BY THE ASSESSEE AGAINST THE JURISDICTION OF LD. PCIT T O USURP THE REVISIONAL JURISDICTION U/S 263 OF THE ACT, WE NOTE THAT THE MAIN FAULT WHICH THE LD. PCIT POINTS OUT IN THE ASSESSMENT ORDER IS THAT IN THE COMPUTATION OF LTCG ON THE FLA T SOLD, THE ASSESSEE BY DEBITING THE TOTAL INTEREST OF RS.30,38,124/- AS EXPENSES RELATED TO S ALE OF FLAT WHICH WAS ON ACCOUNT OF HOUSING LOAN OF RS. 50 LACS WAS DOUBLE DEDUCTION AN D SHOULD NOT HAVE BEEN ALLOWED BY THE AO, BECAUSE ASSESSEE HAD CLAIMED THE DEDUCTION OF I NTEREST PAYMENT FROM AY 2006-07 ONWARDS IN HIS ITRS. ACCORDING TO THE LD. PCIT TH IS AMOUNT OF RS.30,38,124/- ( INTEREST EXPENSES ON LOAN OF RS. 50 LACS TO SBI ) COULD NOT HAVE BEEN ALLOWED AS EXPENDITURE AS PER SECTION 48 OF THE ACT. ACCORDING TO HIM, ASSESSEE APPEARS TO HAVE AVAILED DOUBLE DEDUCTION OF INTEREST ON HOUSING LOAN FIRSTLY AT THE TIME OF FURNISHING RETURN OF INCOME EVERY Y EAR UNDER THE HEAD LOSS FROM SELF OCCUPIED HOUSE PROPER TY AND SECONDLY AT THE TIME OF COMPUTING LTCG AS CLAIMING THE SAME INTEREST AS DIR ECT EXPENSES RELATED TO TRANSFER OF CAPITAL ASSET. WE AFTER EXAMINING THE PAPER-BOOK (P B) BEFORE US ARE OF THE CONSIDERED OPINION THAT THIS FINDING OF FACT/FAULT OF THE LD. PCIT HAS NO FACTUAL BASIS. WE NOTE THAT THE ASSESSEE HAS BOOKED A FLAT ON 19.03.2006 BY AN AGRE EMENT DATED 25.02.2006 ( COPY OF THE AGREEMENT FOUND AT PAGES 90 TO 102 OF THE PAPER BOO K ). BY ENTERING INTO THIS AGREEMENT, 5 ITA NO. 136/KOL/2021 PIYUSH MOHAN AGARWAL, AY 2016-17 THE ASSESSEE AGREED TO PURCHASE THE IMMOVABLE PROPE RTY AT UNIWORLD CITY HEIGHTS AND PURSUANT TO THE SAME FLAT NO. 05-25-2602 WAS ALLOTT ED BY THE DEVELOPER M/S. BENGAL UNITECH UNIVERSAL INFRASTRUCTURE PVT. LTD. IT IS NO TED THAT FOR PURCHASE OF THE FLAT, THE ASSESSEE HAD TAKEN LOAN AGAINST THE PROPERTY FROM S BI IN THE SAME YEAR OF BOOKING THE PROPERTY I.E. IN THE YEAR 2006. IT IS NOTED THAT S INCE THEN THE ASSESSEE HAS BEEN PAYING INTEREST IN RESPECT OF THE SAID PROPERTY WHICH WAS CAPITALIZED IN THE BALANCE SHEET BECAUSE IT PERTAINED TO PRE-CONSTRUCTION/COMPLETION PERIOD. S INCE THERE WAS A DELAY IN COMPLETING THE CONSTRUCTION, FINALLY THE ASSESSEE RECEIVED NOTICE OF POSSESSION FROM THE DEVELOPER ON 11.08.2014 ( COPY OF WHICH IS FOUND AT PAGE 136 OF PAPER BOOK ). HOWEVER, THE ASSESSEE DID NOT TAKE POSSESSION AND PAID HOLDING CHARGES IN THI S REGARD AS AGREED IN THE AGREEMENT DATED 25.02.2006 ( REFER PAGE 114 OF PAPER BOOK ). DURING THE RELEVANT ASSESSMENT YEAR WITHOUT TAKING POSSESSION, THE ASSESSEE TRANSFERRED HIS RIG HT TO THE THIRD PARTY ON 18.11.2015 AT A CONSIDERATION OF RS.1,64,00,000/- AND PAID TRANSFER FEE IN THIS CONNECTION ( REFER AGREEMENT FOR SALE DATED 20.10.2015 FOUND AT PAGES 117 TO 121 OF THE PAPER BOOK ). THEREAFTER, THE ASSESSEE HAS COMPUTED THE LONG TERM CAPITAL GAIN OF RS.4,07,178/- TAKING THE DATE OF ACQUISITION OF THE PROPERTY/FLAT AS ON 19.03.2006 A ND DEBITED AN AMOUNT OF RS.30,38,124/- ON ACCOUNT OF COST OF ACQUISITION BECAUSE IT WAS IN FACT INTEREST PAID TOWARDS REPAYMENT OF HOUSING LOAN OF RS.50 LACS AVAILED FOR PURCHASE OF THE FLAT. THIS IS THE FACTUAL POSITION. HOWEVER THE LD. PCIT ALLEGES THAT, THE ASSESSEE HAD CLAIMED THE INTEREST ON LOAN AS DEDUCTION U/S. 24(B) OF THE ACT UNDER THE HEAD INCOME FROM HOUSE PROPERTY IN THE RETURN OF INCOME OF THE PRECEDING ASSESSMENT YEARS PRIOR T O THE SALE OF THE CAPITAL ASSET/FLAT. BY DOING SO, THE ASSESSEE HAD AVAILED DOUBLE DEDUCTION OF INTEREST ON THE HOUSING LOAN I.E. IN THE RETURN OF INCOME OF PRECEDING ASSESSMENT YEARS ( FROM AY 2006-07 ONWARDS ) UNDER THE HEAD INCOME FROM HOUSE PROPERTY. ACCORDING TO LD. PCIT, AFTER HAVING CLAIMED THE INTEREST EXPENDITURE ON THE LOAN AVAILED FOR THE FL AT, THAT ASSESSEE HAS AGAIN IN THIS ASSESSMENT YEAR ( AY 2016-17 ) HAS CLAIMED THE SAME, AT THE TIME OF COMPUTING LTCG BY CLAIMING THE VERY SAME INTEREST AS DIRECT EXPENSES RELATING TO TRANSFER OF CAPITAL ASSET. THUS, ACCORDING TO LD. PCIT THE AO HAS ERRED IN ALLOWING THE CLAIM OF DEDUCTION OF INTEREST OF RS.30,38,124/- BY PASSING THE ASSESSMENT ORDER DATE D 29.11.2018. HOWEVER, WE DO NOT AGREE WITH THE LD. PCIT. WE FIND THAT THE ASSESSEE HAS NOT CLAIMED IN THE PRECEDING ASSESSMENT YEARS STARTING FROM AY 2006-07 TO AY 20 15-16 DEDUCTION OF THE INTEREST U/S. 6 ITA NO. 136/KOL/2021 PIYUSH MOHAN AGARWAL, AY 2016-17 24(B) OF THE ACT. FOR FINDING SO, WE HAVE CAREFULL Y GONE THROUGH THE ITR ACKNOWLEDGEMENTS FILED BY THE ASSESSEE FROM AYS 200 6-07 TO AY 2015-16 AND THE COMPUTATION OF TOTAL INCOME, BALANCE SHEET AND LEDG ER ACCOUNT OF THE INTEREST OF HOUSING LOAN WHICH ARE PLACED FROM PAGES 10 TO 63 OF THE PA PER BOOK; AND THUS WE FIND THAT THE LD. PCIT HAS ERRONEOUSLY MADE THE FINDING THAT THE ASSE SSEE HAS CLAIMED DEDUCTION OF INTEREST FROM AYS 2007-08 TO 2015-16 AND, THIS FINDING OF FA ULT/ALLEGATION THAT THE AO BY ALLOWING THE DEDUCTION OF INTEREST EXPENSES OF RS.30,38,124/ - HAS COMMITTED IS ERRONEOUS ACT IS NOT SUSTAINABLE. MOREOVER, THE INTEREST EXPENSES OF RS .30,38,124/- AS NOT AN EXPENSES ON TRANSFER OF ASSET AS ERRONEOUSLY OBSERVED BY THE LD . PCIT. IT IS PART OF THE COST OF ACQUISITION OF THE ASSET AND NOT EXPENSES RELATED T O SALE OF FLAT. FURTHER THE LD. PCITS OBSERVATION THAT THE ASSESSEE WAS SHOWING LOSS FROM SELF OCCUPIED HOUSE PROPERTY IS ALSO FACTUALLY WRONG/ERRONEOUS BECAUSE IT IS BASELESS AG AIN FLOWING FROM IMAGINATION. THEREFORE, WE FIND THAT THE LD. PCITS IMPUGNED ORDER CANNOT B E SUSTAINED SINCE HE HAS ASSUMED FACTS WHICH WAS NOT BORNE OUT OF ANY MATERIAL/DOCUMENT AN D IS CONTRARY TO THE MATERIAL/EVIDENCE ON RECORD. THEREFORE, THE ASSESSEE SUCCEEDS. 6. BEFORE WE PART, WE WOULD LIKE TO DEAL WITH THE A RGUMENT LD. CITDR SHRI VIJAY SHANKAR, WHO DRAW OUR ATTENTION TO PAGE 58, WHICH I S THE COMPUTATION OF INCOME FOR AY 2007-08 (FY 2006-07) AND DREW OUR ATTENTION TO NOTE THERE UNDER, WHEREIN THE CARRIED FORWARD LOSSES OF LONG TERM CAPITAL LOSS PERTAINING TO AY 2004-05 OF RS. 2,60,519/- AND AY 2005-06 OF RS. 1,88,859/- TOTAL RS. 4,49,378/- I S GIVEN; AND HOUSING LOAN INTEREST FOR AY 2006-07 OF RS. 26,664/- AND AY 2006-07 OF RS. 3, 94,264. TOTAL RS. 4,20,928/- AND THEN CONTENDED THAT ASSESSEE HAS SHOWN LOSS FROM SELF OC CUPIED HOUSE PROPERTY AS ALLEGED BY LD. PCIT WHICH ASSUMPTION OF FACT IS PER-SE ERRONEOUS, BECAUSE ASSESSEE HAS NOT SHOWN ANY LOSS FROM HOUSE PROPERTY AND HAVING GONE THROUGH TH E VERY SAME COMPUTATION OF INCOME AND THE ITR FILED FOR AY 2007-08, WE FIND THAT THE INCOME COMPUTED AND THE ITR/RETURNED INCOME MATCHES AND THUS WE FIND THAT ASSESSEE HAS N OT CLAIMED ANY DEDUCTION OF HOUSING INTEREST ON THE LOAN TAKEN FOR PURCHASING THE FLAT. THEREFORE THE CONTENTION OF LD CIT DR IS DEVOID OF MERITS AND SO REJECTED. 7. MOREOVER, WE NOTE THAT IN THIS CASE THE AO HAD I SSUED U/S. 142(1) OF THE ACT DATED 26.11.2018 AND HAS ENQUIRED ABOUT THE DETAILS OF S ALE OF FLAT AND LTCG ETC. BY ASKING 7 ITA NO. 136/KOL/2021 PIYUSH MOHAN AGARWAL, AY 2016-17 QUESTION REGARDING THE COST OF ACQUISITION OF PURCH ASE AND COST OF IMPROVEMENT WITH EVIDENCE IN THE CASE OF FLAT SOLD (QUESTION NO.2&3) WHICH IS FOUND PLACED AT PAGE 68 OF PB AND PURSUANT TO WHICH THE ASSESSEE HAD REPLIED VIDE LETTER DATED 29.11.2018 PLACED AT PAGE 73 TO 75 OF PB ALONG WITH SUPPORTING EVIDENCE WHERE IN THE ASSESSEE HAD FILED THE COMPUTATION OF LTCG AS WELL AS THE BREAKUP OF THE I NTEREST WHICH HE HAD CAPITALIZED IN THE AY 2016-17 TO THE TUNE OF RS. 30,38,124/- (PAGE 78 OF PB) THUS, WE NOTE THAT THE AO HAD ENQUIRED ABOUT THE ISSUE OF LTCG ON SALE OF FLAT AN D HAS DISCHARGED HIS DUTY AS ON INVESTIGATION AND CANNOT BE FAULTED; AND ALLOWING T HE INTEREST EXPENDITURE (CAPITALIZED) AND WHICH BECOMES PART OF THE COST OF ACQUISITION IN TH E FACTS OF THIS CASE IS ALLOWABLE, AND IS A PLAUSIBLE VIEW AND SO IT CANNOT BE HELD ERRONEOUS A ND AT ANY RATE BE HELD UN-SUSTAINABLE VIEW IN LAW . 8. THUS, WE HOLD THAT THE VERY USURPATION OF JURISD ICTION BY LD. PRINCIPAL CIT TO INVOKE HIS REVISIONAL POWERS ENJOYED U/S 263 OF THE ACT IS INVALID/ABSENT, SO THE ACTION OF LD PCIT IS WITHOUT JURISDICTION AND CONSEQUENTLY THE IMPUGN ED ORDER OF THE LD. PCIT IS QUASHED. 9. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . ORDER IS PRONOUNCED IN THE OPEN COURT ON 23 RD JUNE, 2021. SD/- SD/- (J.S. REDDY) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23.06.2021 JD, SR. PS COPY OF THE ORDER FORWARDED TO: 1. APPELLANT- SHRI PIYUSH MOHAN AGARWAL, 404 LORDS, 4 TH FLOOR, 7/1, LORD SINHA ROAD, KOLKATA-700 071. 2. RESPONDENT PCIT- 1, KOLKATA 3. ITO, WARD-8(4), KOLKATA 4. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES, KOLKATA