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TMI Blog2012 (11) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... et is taken into consideration when it is sold and capital gains are computed under section 48. Thus no doubt that the interest in question is indeed an expenditure in acquiring the asset. Since both provisions are altogether different, the assessee in the instant case is certainly entitled to include the interest amount at the time of computing capital gains under section 48. CIT(A) has rightly accepted the assessee's contention - in favour of assessee. Loan transaction - Addition regarding income from the head "other sources" - CIT(A)deleted the addition - Held that:- The CIT(A) has nowhere dealt with the legal aspect of the issue i.e., whether the assessee who, called himself to be a salaried employee could raise a plea his loan transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was of the opinion that since interest in question on housing loan, had already been claimed as deduction under section 24(b) in assessment years 2004-05 to 2006-07, the same could not be taken into consideration for computation under section 48 of the "Act" as the legislative provision did not provide such method of including amount of deduction under section 24(b) of the "Act". Therefore, the Assessing Officer added back the above said interest amount to the income of the assessee from short term capital gains vide assessment order dated 24.11.2009. 4. Further, the assessee had declared income under "other sources" of Rs. 26,127/- alleged to have been derived from tax free dividend of Rs. 4,720/- with interest of Rs. 26,127/-. With regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has challenged the CIT(A)'s order. 7. The DR, representing the Revenue, reiterated the finding of the assessing authority as well as grounds of appeal and prayed for restoring the additions made by the Assessing Officer. It is the submission of the Revenue that once the assessee had availed section 24(b) of the "Act", he cannot include the same very amount for the purpose of computing capital gains under section 48. In the same manner, regarding other addition under the head "income from other sources" (supra), the contention of the Revenue is that the Assessing Officer had rightly made the addition since the assessee's activity of granting loan to a single person could not be called as business. By referring to the findings of the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eable under the head "Capital gains" shall be computed, by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely :-- (i) expenditure incurred wholly and exclusively in connection with such transfer; (ii) the cost of acquisition of the asset and the cost of any improvement thereto:" After perusing the above said provisions, we are of the opinion that deduction under section 24(b) and computation of capital gains under section 48 of the "Act" are altogether covered by different heads of income i.e., income from 'house property' and 'capital gains'. Further, a perusal of both the provisions makes it unambiguous that none of them excludes operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as evidence that the assessee had also paid interest to them in return. Further, it is also evident that the CIT(A) has nowhere dealt with the legal aspect of the issue i.e., whether the assessee who, called himself to be a salaried employee could raise a plea his loan transaction could be called as a 'business activity' or not even after the same had led to accrual of interest as held by the assessing authority. This vital aspect, in our opinion has escaped the consideration of the CIT(A). Faced with this situation, we deem it appropriate that the CIT(A) shall redecide this legal aspect in accordance with law after affording adequate opportunity of hearing to the assessee. Accordingly, we uphold the CIT(A)'s order in deleting the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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