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2020 (2) TMI 348 - AT - Income TaxLTCG in respect of sale of land - Characterization of income - benefit of indexation - HELD THAT:- As already negated observation of Ld.AO that, said land was purchased and sold in a short span during financial year relevant to assessment year under consideration. We therefore reject this argument by Ld.DR that income earned from sale of said land is to be treated as business income. Coming to the nature of said land, Ld.AO before Ld.CIT(A), submitted that the Village that includes said land has been ascertained by BDA as residential zone. Whereas assessee submitted that he did not convert the said land for non agricultural purposes. However, we also note that assessee has not established by way of documents /evidences that it was agricultural land. We therefore cannot appreciate the argument advanced by Ld.AR. As we have held hereinabove that said land is a long term capital asset, capital gains must be computed by granting indexation benefit to assessee. Ld.AO is directed to recomputed LTCG in respect of sale of said land by assessee in accordance with law. Accrued interest on the loan raised for the company against F.D. Booked by the Director - Payments of interest on FD and on the interest paid on loan - HELD THAT:- Admittedly, assessee deposited ₹ 1 crore in bank in his name as F.D, on which assessee received interest of ₹ 3,93,198/-. On security of this FD, company in which assessee is a Director, raised loan of ₹ 50 lakhs and repaid the loan. However, interest on loan amounting to ₹ 3,68,252/- was claimed as expenditure by the assessee. In our opinion this interest is actually the liability of the company and there is no basis for claiming this expenditure, in the hands of the appellant. Therefore there is no basis for setting off of this liability of company against interest earned by assessee on funds belonging to him deposited in the bank. Hence, the actual interest which actually works out to 3,68,253/- - We therefore do not find any infirmity in order of Ld,CIT(A).
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