TMI Blog2012 (3) TMI 591X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 48,88,846/- paid as the cost of acquisition of shares for computing the short term capital loss. 3. The brief facts of the case are that the assessee filed return of income on 25- 7-2008 declaring total income of ₹ 1,57,75,549/-the return was processed u/s. 143(1). Later on the case was selected for scrutiny. 4. In this case the assessee had applied for 60,00,000 equity shares in the IPO of Reliance Power Ltd. For the purpose of making application in IPO, the assessee had taken a loan of ₹ 63 crore from L T Finance Ltd. and on that loan paid interest of ₹ 49,19,680/-. Due to the oversubscription of IPO, the assessee was allotted only 37,604 shares as against his application for 60,00,000 shares. The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med the Cost Price to be ₹ 580.33 inclusive of interest paid for applying for 60 lac shares. 4.2.2. The assessee has relied on the decision of the Mumbai ITAT in the case of Smt. Neera Jain vs. ACIT. The decision of Hon ble ITAT Mumbai is not conclusive. Cost of acquisition of an asset is the total amount spent to acquire that asset. Any expenditure incurred with purchase of such asset only forms a part of the acquisition. 4.2.3. Sec. 48 clearly states that any expenditure incurred for acquisition of the asset shall be allowable for computing the cost of the asset. In this case, the asset acquired is 37604 shares and not 60 lacs shares applied. The assessee is not into trading of shares and has shown the shares as investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erm Capital Gain disallowed ₹ 48,88,846 Short Term Capital Gain Assessed. ₹ 2,02,06,888 ( Addition : STCG ₹ 48,88,846/0) 5. The assessee being aggrieved by the decision of the Assessing Officer carried the matter before CIT (A). CIT (A) did not agree with the contention of Assessing Officer and allowed the appeal of the assessee by holding as under:- 2.2. I have carefully considered the submissions of the Ld, Counsel and the facts of the case. There is no dispute that the cost of finance or interest has to be added to the cost of acquisition of the asset for the purpose of computation of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly allowed. 6. Aggrieved by the order of CIT (A), the Revenue now is in appeal before us. 7. The Ld. Counsel of the assessee submits that the facts of this case are exactly identical to that of Neera Jain and therefore the issue stands covered in his favour in view of the decision of ITAT Mumbai Bench in the case of Smt. Neera Jain vs. ACIT (ITA No.1861/M/2009 order dated 22-2-2010). 7.1. We have also heard the Ld. DR. The Ld. DR vehemently argued that Assessing Officer was right in allowing the interest only to the extent of shares allotted and further urged that the order of the Assessing Officer be upheld. 7.2. We have heard the parties and perused the records. There is no dispute about the fact that money borrowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... borrowed with sole intention for acquiring the shares and that is no where disputed by the Assessing Officer and as allotment of the shares was not in the hands of the assessee and hence, the interest paid to the financiers on the entire borrowed money has to be allowed and same cannot be restricted to the extent of shares allotted. In our opinion, the assessee has to succeed on this ground. As rightly submitted by the Ld. Counsel, the entire money has been borrowed by the assessee, with the sole purpose for acquiring the shares of the Punjab National Bank and NTPC Ltd. Though the applied shares were not allotted on full, that will not deprive the assessee from claiming the entire interest paid as the part of the cost of the acquisition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound:- On the facts and in the circumstances of the case, the CIT (A) erred in confirming disallowance of interest expenditure of ₹ 27,408/-. 9. With respect to the above ground, the Assessing Officer has held as under:- The assessee has shown interest income of ₹ 27,408/-. He has also claimed expenditure of ₹ 27,408/- as interest paid. However, no supporting evidence is given. Hence, the interest expenditure is disallowed and added to the total income. 10. When the matter went before CIT (A), CIT (A) dismissed the ground and held as under:- 3.2. I have carefully considered the submissions of the Ld. Counsel and the facts of the case. It was the contention of the Ld. Counsel that the Assessing Officer n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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