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2018 (2) TMI 1634 - AT - Income TaxDisallowance of interest - AR submitted that the entire interest paid by assessee on loan taken for acquiring capital asset deserves to be allowed - AO 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 - Held that:- From these judicial pronouncements, it is very much clear that if the property is purchased from borrowed funds then interest on borrowed fund has to be paid. The amount of interest paid by assessee constitutes actual cost to the assessee for that property. To exclude interest amount from the actual cost of the assets/property would lead to anomalous result. The interest amount should be definitely added to the actual cost of the property. We reverse the findings of CIT(A) and hold that the entire interest paid to bank for acquiring capital asset would be eligible as part of cost of acquisition. Disallowance of expenses incurred towards cost of improvement being woodwork, electrical and 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.
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