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2023 (7) TMI 1033 - AT - Income TaxLTCG computation - deduction of interest paid by the assessee for the loans - addition towards the cost of acquisition u/s 48 claimed as deduction on account of interest expenses while computing capital gains along with other grounds - whether the interest paid for the loan availed for the accuring the asset is said to be wholly and exclusively expended for the asset or not? - HELD THAT:- As decided in Trishul Investments Limited [2007 (7) TMI 252 - MADRAS HIGH COURT] interest paid on borrowed funds availed for the acquisition of shares amounted to the cost of share and was held to be cost of acquisition of shares. It was stated that the said interest should be included in the cost of the acquisition for which the assessee was entitled to deduction u/s 48 of the Act. Hon’ble Karnataka High Court in the case of CIT vs. Maithreyi Pai [1983 (11) TMI 43 - KARNATAKA HIGH COURT] wherein it was held that the interest paid on borrowing for acquisition of capital asset is entitled for deduction u/s 48 of the Act, though in this case the primary issue was about double deduction u/s 48 and section 57 of the Act. Thus various High Courts have held that the interest incurred on borrowed funds are to be treated as ‘cost of acquisition’ and deduction u/s 48 of the Act was allowed for the said expenditure. By respectfully following the said decisions, we hereby allow the claim of the assessee. Addition towards interest paid from escrow account by not considering the fact that the said interest does not pertain to the assessee and was towards reimbursement - assessee contended that the said amount was retained by the buyer during the slump sale and that the assessee has submitted the details of the TDS which is filed wherein, the A.O. contended that TDS was not deducted towards the said reimbursement and AR controverted the submission of the AO that details pertaining to impugned amount were not furnished before the AO - HELD THAT:- We are of the considered opinion that this issue raised by the assessee requires verification of the documentary evidence relied on by the assessee. For this purpose, we remand this issue back to the learned AO for verifying the relevant documents relied on by the assessee. Additional ground of appeal raised before ITAT - Disallowance u/s 14A r.w.r 8D - DR controverted the said fact and stated that the assessee has not challenged the said ground of appeal before the learned CIT(A) and contended that the said ground shall be dismissed - HELD THAT:- As observed that the assessee’s additional ground of appeal raised before us has not been challenged before the learned CIT(A) and since the First Appellate Tribunal has not dealt with this issue, we deem it fit to refrain from deciding this issue as being academic in nature.
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