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TMI Blog2025 (1) TMI 755X X X X Extracts X X X X X X X X Extracts X X X X ..... rred, whereas due date was 15.05.2023. Considering the above fact, we condone the delay and proceed to decide the appeal on merit. 3. The assessee has taken three grounds of appeal, out of which Ground No. 2 is the substantial ground of appeal. In this ground, the grievance of the assessee is that ld. CIT(Appeals) has erred in confirming the order of ld. Assessing Officer vide which deduction of interest expenditure amounting to Rs. 1,90,78,228/- was disallowed to the assessee while computing the long-term capital gain on sale of building. 4. Brief facts of the case are that the assessee has filed his return of income on 30.07.2014 declaring total income of Rs. 33,67,460/-. The return was selected for scrutiny assessment and a notice under section 143(2) and questionnaire under section 142(1) were issued and served upon the assessee. On perusal of the record, it revealed to the ld. Assessing Officer that the assessee was holding 99% share of Rainey Park Limited. The Guest House/Hotel was being run by the assessee and ultimately on account of losses faced by him, he has sold the property. The ld. Assessing Officer has worked out the capital gain assessable in his hand. He has clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of ACIT -vs.- C. Ramabrahmam. In this judgment, we find that Tribunal has discussed an identical issue and recorded the following finding:- "8. We have considered submissions of both parties at length and also perused the relevant findings of the Assessing Officer as well as CIT(A). Regarding the issue of capital gains, it transpires that there is hardly any dispute that the assessee had availed the loan for purchasing the property in question. Since the assessee had shown the income under the head 'house property', he preferred to raise the claim of deduction under section 24(b) of the "Act", which reads as under: b) where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital:" There is no quarrel that since the assessee's claim of deduction was under the statutory provisions; therefore, he succeeded in getting the same. However, after the property was sold, he also chose to include the interest amount while computing capital gains under section 48 of the "Act", which reads as under: 48. The income chargeable under the head "Capital gains" shall be comput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO had disallowed the interest paid on the housing loan amounting to Rs. 1,82,53,834/- stating that such interest needs to be claimed u/s. 24 of the Act and does not qualify as deduction us 48 of the Act. It was submitted by the appellant that they had never claimed any interest paid on the housing loan u/s. 24 of the Act. 3.3. In respect of allowing housing loan interest as the part of the cost of acquisition. It was submitted that the interest was paid directly for the purchase of the flat. Assessee had taken a housing loan and the disbursement of the loan was made directly to the builder. There is a direct nexus of the payment of the housing loan interest and the acquisition of the flat. It was submitted that the cost of the acquisition is the amount paid to the builder and also the cost of the borrowing made by the assessee for the purpose of paying to the builder without the money borrowed, the assessee would not have been in a position to buy the property. Payment of consideration for the purchase of flat is indisputably having been made with borrowed funds and the borrowing directly related to the acquisition and interest paid there on would form part of the cost of acq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereon is to be included while calculating the cost of acquisition of the asset. Therefore, question No. 1 has to be answered against the revenue. 3.6. 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 us 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 A and held deduction u/s. 24(b) and computation of capital gains us 48 were altogether covered by different heads of income i.e., income from 'house property' and 'capital gains'. None of them excludes operative of the other. The interest in question was indeed expenditure in acquiring asset. Since both provisions were altogether different, assessee was entitled to include interest paid on housing loan for computation of capital gai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p papers purchased for the registration of the flat and it was to be cancelled due to death of the husband of the assessee and 10% cost of the stamp paper amounting to Rs. 1,35,930/- should be allowed u/s 48 of the Income Tax Act. As stamp paper were purchased specifically for the registration of the flat therefore any amount spent for the flat is to be allowed as part of the acquisition. 4.3. The AO had reduced the cost of the acquisition from Rs. 2,79,96,770/- to Rs. 2,75,00,000/- even though the confirmation of builder dated February 2016 was submitted. The AO had taken the cost as per allotment letter dated 21 12.2004 which is always a provisional allotment and which is subject to the changes. The assessee was originally allotted flat measuring 6500 sq. ft. which was subsequently increased to 6610.84 sq. ft. The papers submitted by the appellant clearly indicate the final area to be 6610.84 sq. ft. and payments were made and confirmed accordingly. Hence, the addition on this ground does not stand. The proportionate disallowance of interest is consequential also therefore deleted. These grounds of appeal are ruled in favour of the appellant. 5. Ground No. 6 & 7 are general i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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