Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (11) TMI 85 - AT - Income TaxCapital gains computation u/s 48 - deduction of interest as part of cost of acquisition from full value of sale consideration - AO asked the assessee why interest expense as claimed in cost of improvement/acquisition of the transacted property should not be disallowed, as interest expenditure should be claimed u/s. 24 against house property income - HELD THAT:- Without making the payment of the amounts to the builder the assessee could not have obtained the conveyance deed - AO is wrong in taking the cost of acquisition only as stated in the conveyance deed. As against that the assessee has filed evidence on record to contend that what is shown by him as cost of acquisition are the payments made to the builder for getting the right over the property which is sold by him. Such claim of the assessee could not be denied unless proved otherwise. There is no material on record to suggest that the payments which are stated to be made by the assessee were not incurred by him as the cost of the said flat which has been subject-matter of sale during the year under consideration. It is so with respect to base price, processing fee, preference charges, external development charges, tire fighting charges, generator charges, etc. which all will form cost of acquisition incurred by the assessee for getting the ownership of the asset and, therefore, the assess e is entitled to get deduction thereof under the provisions of s. 48(ii) Deduction under section 24(b) and computation of capital gains under section 48 are altogether covered by different heads of income i.e., income from 'house property' and 'capital gains' - deduction u/s 24(b) is claimed when concerned assessee declares income from 'house property', whereas, the cost of the same asset is taken into consideration when it is sold and capital gains are computed under section 48. We do not have even a slightest doubt that the interest in question is indeed an expenditure in acquiring the asset. Since both provisions are altogether different, the assessee in the instant case is certainly entitled to include the interest amount at the time of computing capital gains under section 48 - See Praveen Gupta vs. Assistant Commissioner of Income Tax [2010 (8) TMI 820 - ITAT DELHI] and ACIT vs. C. Ramabrahmam [2012 (11) TMI 430 - ITAT CHENNAI] - Decided in favour of assessee
|