COMMISSIONER OF INCOME TAX Vs. S.K. JAIN

JUDGEMENT

(1.) NEW Delhi ('the Tribunal') in ITA No. 3597/Del/2002 relevant for the asst. yr. 1993 -94 and ITA No. 3589/Del/2002 relevant for the asst. yr. 1993 -94.

(2.) THE assessee had filed his returns in which he claimed a deduction on interest paid to Andhra Bank. It transpires that the previous owner of the house property belonging to the assessee had taken a mortgage against the property on 19th Andhra Bank for occupation of the house property was to be adjusted against the interest on the loan taken by the previous owner. that the previous owner had with Andhra Bank continued, with the result that the assessee received rent from Andhra Bank after adjustment of the interest on the loan taken by the previous owner.

(3.) THE AO looked into the facts of the case and after holding regular assessment proceedings, he allowed a deduction to the assessee on the interest amount paid by him for as many as three assessment years. For the asst. yr. 1996 -97, the AO decided to make further inquiries with regard to the loan amount and after an explanation was given by the assessee with all documentary evidence, it was held that the assessee was entitled to deduction on the interest paid. taking recourse to s. 147/148 of the IT Act, 1961 ('the Act'). The proposal was approved by the concerned CIT and notices were then issued to the assessee for reopening the assessment in respect of asst. yrs. 1993 -94, 1994 -95, 1995 - 96 and 1996 -97. Reassessment proceedings were conducted and the deduction earlier given to the assessee was deleted. The AO also made some other additions to the income of the assessee.