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2013 (10) TMI 1136 - AT - Income TaxInterest on borrowed funds to be part of cost of acquisition for the purpose of section 48 of the Income tax act on purchase and sale of shares – Applicability of section 14A of the Income tax act – Held that:- Entire interest has been paid by the assessee as a part of cost of acquisition of shares allotted, is to be treated as cost of acquisition - There is a direct nexus between the borrowed money and the cost of acquisition of shares by assessee. The assessee is entitled to capitalize the said interest as part of cost of acquisition as per section 48 of the Act. Hence, short term capital gain as accrued to the assessee on the sale of shares of NTPC Ltd., NDTV Ltd, and Datamatics Ltd has to be considered after considering the payment of the said interest as part of cost of acquisition. Since, the short term capital gain is taxable under the Act, the provisions of section 14A is not applicable on the facts and circumstances of the case – Appeal allowed – Decided in favor of Assessee.
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