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TMI Blog2012 (3) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... as the cost of acquisition of shares for computing the short term capital loss. 3. The brief facts of the case are that the assessee filed return of income on 25-7-2008 declaring total income of Rs. Nil the return was processed u/s. 143(1). Later on the case was selected for scrutiny. 4. In this case the assessee had applied for 60,00,000 equity shares in the IPO of Reliance Power Ltd. For the purpose of making application in IPO, the assessee had taken a loan of ₹ 63 crore from L T Finance Ltd. and on that loan paid interest of ₹ 9,83,836/-. Due to the oversubscription of IPO, the assessee was allotted only 37,604 shares as against her application for 60,00,000 shares. The assessee considered the interest of ₹ 49 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest paid for applying for 60 lac shares. 4.2.2. The assessee has relied on the decision of the Mumbai ITAT in the case of Smt. Neera Jain vs. ACIT. The decision of Hon ble ITAT Mumbai is not conclusive. Cost of acquisition of an asset is the total amount spent to acquire that asset. Any expenditure incurred with purchase of such asset only forms a part of the acquisition. 4.2.3. Sec. 48 clearly states that any expenditure incurred for acquisition of the asset shall be allowable for computing the cost of the asset. In this case, the asset acquired is 37604 shares and not 60 lacs shares applied. The assessee as not into trading of shares and has shown the shares as investment. Deduction of interest expense is allowable only if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 8,76,152 ₹ 57,44,073 Less:- Reliance Power. ₹ 9,43,225 Short Term Capital Gain Assessed. Rs.48,00,847 5. Pursuant to the above and subject to the details made available by the assessee, the total income of the assessee is computed as under:- Short Term Capital Gain as per above. ₹ 48,00,847 Income from Other sources. ₹ 88,355 Gross Total Income. ₹ 48,00,847 Rounded off to ₹ 48,00,850 5. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 22-2-2010. The copy of order was filed and the finding of the order is reproduced in the submission of the Ld. Counsel. Considering the facts of the case and respectfully following the aforesaid decision of the Hon ble Mumbai Tribunal, the Assessing Officer is directed to allow the interest of ₹ 49,19,680/- paid to M/s. L T Finance Ltd., as the cost of acquisition of shares for computing the short term capital loss. The first ground of appeal is accordingly allowed. 6. Aggrieved by the order of CIT (A), the Revenue now is in appeal before us. 7. The Ld. Counsel for the assessee submits that the facts of the case are exactly identical to that of Neera Jain and therefore, the issue stands covered in her favour in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrowed for the purpose of acquiring the shares of the Punjab National Bank and NTPC Ltd. As per the facts on record, there is no dispute at all that immediately after allotment of the shares money refunded by both the company were paid back to the financiers. The controversy is whether the entire interest on the borrowed money paid by the assessee can be allowed u/s. 48 treating the same as the cost of acquisition. The argument of the Ld,. Counsel is that funds were borrowed with sole intention for acquiring the shares and that is no where disputed by the Assessing Officer and as allotment of the shares was not in the hands of the assessee and hence, the interest paid to the financiers on the entire borrowed money has to be allowed and same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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