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2019 (9) TMI 193 - HC - Income TaxCost of acquisition in computing capital gains - indexation of interest - HELD THAT:- There may not be any necessity for this Court to decide these two questions namely (i) with regard to interest on borrowed funds for acquiring capital asset and whether it should be treated as cost of acquisition for computing the capital gain and (ii) with regard to indexation of interest, since we affirmed the order passed by the Tribunal remanding the matter to the AO to examine the correctness of the payment of interest. In fact, the AO, while completing the assessment u/s 143 read with Section 147 held that there was no agreement between the lender and the recipients as to the date of repayment, rate of interest, for which, money is lent, etc. AO held that the plea raised by the assessee that they availed the loans from five of their sister concerns at different rates of interest is only an afterthought to reduce the capital gains tax liability. Tribunal remanded the matter for a fresh consideration to examine the genuineness of the transaction. Thus, unless and until the assessee is able to succeed before the AO in the de novo proceedings to be conducted on remand, the question of considering as to whether the interest on borrowed funds should be treated as cost of acquisition and as to whether the assessee is entitled to indexation of interest would not arise. Thus, in our considered view, in the light of our decision to approve the order of remand for examining the genuineness of the loan transactions, the two issues pointed out above have become academic and are not required to be answered at this juncture. Penalty under Section 271(1)(c) - wilfulness on the part of the assessee to declare the land as an agricultural land for the purpose of claiming the benefits - HELD THAT:- When the penalty proceedings were initiated, the AO was fully justified in holding that the assessee was consciously aware of the real position and knowingly furnished inaccurate particulars of income in the revised return. The assessee is not an individual, but a company, which is an association of persons consisting of other corporate giants. Therefore, there is no reason to interfere with the factual finding recorded by the Assessing Officer stating that the assessee was consciously aware of real position and knowingly furnished inaccurate particulars. CIT(A) reversed the order of the AO on the ground that the AO proceeded on the assumption that the assessee was guilty. When the correctness of the same was examined, in our considered view, the Tribunal rightly held that there is a wilful concealment. We find that there is absolutely no ground to interfere with the common order passed by the Tribunal. Since we have already approved the finding recorded by the Tribunal, which is on re-appreciation of facts, we find that the decision in the case of Gem Granites [2013 (11) TMI 1375 - MADRAS HIGH COURT] will not be of any assistance to the case of the assessee.
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