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TMI Blog2017 (5) TMI 1161X X X X Extracts X X X X X X X X Extracts X X X X ..... later restored. Consequently, the Court finds no error having been committed by the ITAT in restoring the indexed interest cost as directed by the AO. No substantial question of law - Decided against revenue - ITA 1029/2015 - - - Dated:- 16-5-2017 - S. MURALIDHAR CHANDER SHEKHAR JJ. Appellant Through: Mr. Rahul Chaudhary, Senior standing counsel. Respondent Through: Mr. Ajay Vohra, Senior Advocate with Ms. Kavita Jha and Ms. Roopali Gupta, Advocates. O R D E R 1. This appeal by the Revenue under Section 260A of the Income Tax Act, 1961 against the impugned order dated 31st October, 2014 passed by the Income Tax Appellate Tribunal ( ITAT ) in ITA No. 5102/Del/2011 for the Assessment Year ( AY ) 2008-09. 2. By an or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal sale consideration ₹ 30,00,00,000 Less: Indexed cost of acquisition improvement on land building ₹ 25,58,52,290 Less: Selling expenses (Professional Fees) ₹ 34,12,700 LTCG ₹ 4,07,35,010 6. The Assessing Officer ( AO ) has, in the order of the assessment dated 30th December 2010 determined the LTCG at ₹ 5,08,54,387. The AO worked out the LTCG as under: A Indexed cost of land ₹ 1,25,25,589/- B Indexed cost of construction/improvement ₹ 16,16,75,673/- C Cost of interest payment ₹ 3,25,42,455/- D Other Charges related to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and these were restored only on 6th August, 2004. The borrowing costs were recorded in the books of accounts year after year. The interest cost on a year-to-year basis was capitalized under the head capital work in progress which was later transferred to building accounts. Thus, the ITAT pointed out, it would be a fallacy to suggest that such borrowing cost in the shape of interest was not incurred for the development of the property. 11. As explained by this Court in Commissioner of Income Tax v. Mithlesh Kumari (1973) 92 ITR 9 (Del), the interest amount constituted part of the actual cost of the land. In fact the AO has in the assessment order calculated the LTCG by including the interest cost. It has been noted by the CIT (A) th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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