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TMI Blog2018 (2) TMI 1634X X X X Extracts X X X X X X X X Extracts X X X X ..... plumbing etc of the new flat - Held that:- In our considered opinion assessee is eligible to get the benefit as AO has not disputed the nature of expenses incurred. Assessee incurred the expenditure to make the house habitable and therefore the claim of assessee deserves to be allowed. - ITA No.147/Del/2015 - - - Dated:- 19-2-2018 - SRI N.K.SAINI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER For The Appellant : Sh. MK Juneja, CA For The Respondent : Sh. SS Rana, CIT, DR ORDER PER BEENA A PILLAI, JUDICIAL MEMBER The present appeal has been filed by assessee against order dated 20/11/14 passed by Ld.CIT(A) for assessment year 2011-12 on the following grounds of appeal: 1. That Order of the Learned Income Tax Officer is wrong and bad in law to the extent of addition made to the income of the Assessee, and the Learned Commissioner of Income Tax (Appeal) has also erred while confirming the additions as per the grounds following. 2. That the Learned Assessing Officer has erred both in fact and in law while disallowing claim of assessee of ₹ 16,27,671/- as per original return submitted (stated as ₹ 6,66,7661- in the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to why the interest included in the cost of acquisition may not be disallowed, as the same has been claimed as deduction under the head income from house property . In response to the show cause notice, assessee replied vide submission dated 31/01/14 that it had erroneously included the interest paid on housing loan which was paid after the date of possession. The assessee having realised the mistake/error revised the calculation of cost of property sold and indexed. Accordingly assessee also paid the due taxes thereon, consequent to the revision of income. The revised calculation of cost with indexation computed by assessee is as under: Indexed Cost of Acquisition Amount in Rs. Amount in Rs. Total cost of construction 1,04,54,355/- Indexed Cost of construction 1,47,73,472/- Total interest paid* 5,64,569/- Indexed Cost of Acquisition 1,53,38,041/- (Indexed cost of construction + total interest paid) (* Details of interest paid) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is allowable as cost of property, with indexation, and assessee claimed ₹ 5,64,569/-without indexation as per the revised computation submitted during the course of assessment proceedings. He placed reliance upon various decisions, wherein it has been held that interest on money borrowed for acquiring capital asset will form part of cost of asset. The decisions cited by Ld.AR are as under: * CIT versus Mithlesh Kumari reported in (19 7392 ITR 9 (Delhi); * CIT versus Raja Gopala Rao reported in (2001) 252 ITR 459 (mad); 4.2. On the contrary Ld. DR relied upon the orders of authorities below. He submitted that the entire interest expenses claimed by assessee cannot be included for the purposes of computing cost of acquisition, as assessee had claimed interest expenses while calculating income from house property under section 24 (b) of the Act. 5. We have perused the submissions advanced by both the sides in the light of records placed before us. Assessee has made investment in the capital asset partly out of the borrowed funds and had incurred interest expenses thereon as under: F.Y. Amount (Rs.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by excluding the interest amount from the actual cost of the land that she had made a capital gain of ₹ 20,000.00 when, as a matter of fact, she had not made any profit at all by the transaction. Applying the said observations of the Calcutta and the Bombay High Courts to the present case, we hold that the Tribunal was right in adding the interest amount of ₹ 16,878.00 towards the actual cost of the land. 5.3. Further in the case of ACIT Vs C.Ramabrahmam, the ITAT Chennai Bench C in ITA No. 943/Mds/2012 has held that the assessee had purchased house property, availing loan. The house property was subsequently sold and assessee included interest paid on housing loan while computing capital gains u/s 48. The Assessing Officer was of opinion that since interest in question on housing loan, had already been claimed as deduction u/s 24(b), the same could not be taken into consideration for computation u/s 48 and interest amount was added to income of assessee. The CIT(A) reversed the findings of Ld.AO and held deduction u/s. 24(b) and computation of capital gains u/s 48 were altogether covered by different heads of income i.e., income from house property and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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