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2018 (2) TMI 1527 - AT - Income TaxShort term capital gains on sale of the impugned flat - Interest paid for the acquisition of the impugned property - Computation of cost of acquisition - Held that:- The applicable clause of section 55 (2) to the assessee’s case is clause (b) and the relevant sub clause is sub clause (i) , which provides that where the capital asset become the property of the assessee before first day of April 1981 means the cost of acquisition of the asset to the assessee or the fair market value of the asset on the first day of April 1981. The statutory charges such as registration and stamp duty are paid for getting the property registered in the name of the assessee, without such payment the assessee would not become the owner of the impugned flat. The cost of acquisition of property would definitely include statutory charges such as registration and stamp duty duly paid. Therefore, hold that the amount of ₹ 3,84,449/- should be included as cost of acquisition of the impugned flat. For Interest paid for the acquisition of the impugned property as held in Challapalli Sugars Ltd. vs. CIT [1974 (10) TMI 3 - SUPREME Court] that in case money is borrowed by a newly started company which is in the process of constructing and erecting the plant, the interest incurred before the commencement of production on such borrowed money can be capitalized and added to the cost of the fixed asset. In the instant case, it is not discernable whether the interest paid for the acquisition of the impugned property has been claimed by the assessee under Chapter IVC namely ‘income from house property’. If the assessee had already claimed interest under the head income from house property, the same interest cannot be capitalized and added to the cost of acquisition of the property. Since these facts are not available on record, as regards interest paid for the loan availed from ICICI Bank for the purpose of acquisition of the impugned property whether to be allowed as deduction in computing the STCG is to be considered afresh by the Assessing Officer. The Assessing Officer shall take decision in accordance with law after affording a reasonable opportunity of hearing to the assessee. It is ordered accordingly.
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