TMI Blog2018 (2) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... r, he has held that interest expenditure is to be a part of cost of acquisition but because of section 24B the assessee is not entitled to the same. However, the ld CIT(A) has failed to appreciate that though the deed of this property was executed on 12.10.2006 but the property was incapable of being let out as there was no occupancy around that area. However, the above fact could not be demonstrated before the ld Assessing Officer and we do not find any such mention in the order of the ld Assessing Officer, therefore, we set aside Ground back to the file of the ld CIT(A) to correctly adjudicate to ascertain the facts whether the property is capable of being let out or not and then decide about the amount of interest to be considered as cost of acquisition. Treatment to interest expenditure incurred by the assessee for the business purposes - Held that:- CIT(A) should have examined the claim of the assessee of allowability of the above expenditure as allowable interest expenditure against the business income. In view of this we set aside this ground of appeal to the file of the ld CIT(A). In the result ground of the appeal of the assessee is allowed accordingly. Gain from sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make out the cost of acquisition of the said property as held by the various high courts including the jurisdictional High Court and Supreme Court, when the same had been capitalized and not claimed under any head of account in the earlier years . III . a ) in not allowing the interest of Rs . 22,51,908 /- ( it should be Rs . 22,30,640 /-) on the funds borrowed to finance the purchase of property No . DW 0078 Block - S Nirvana Country South City Gurgoan towards it cost of acquisition on the basis that it has been claimed against annual value assessable for the 33 months period when no such claim has been made or allowed in the past . b ) in holding that the property No . DW0078 Block - S Nirvana Country South City Gurgoan was capable of being let out in Oct . 2006 and the interest accrued on the loan to finance the purchase of this property deemed to have been allowed during the period of five years when no such thing had happened or claim made during the intervening period of 33 months prior to the sale of the property . c ) in not allowing the capitalization of interest of Rs . 22,51,908 /- ( it should be Rs . 22,30,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment was completed u/s 143(3) at ₹ 6248450/- and passed on 28.03.2013 and penalty proceedings initiated u/s 271(1)(c) of the Income Tax Act. Aggrieved the assessee preferred appeal before the ld CIT(A), who partly allowed the appeal of the assessee and therefore, both the parties are in appeal before us. 4. First we take up the appeal of the assessee where ground No. 1 is against disallowance of ₹ 50000/- out of commission paid. The assessee has paid a commission of ₹ 876850/-. Assessee was asked to produce the party wise expenses of these expenses which was explained that customer visit the hotel through brokers such as Rickshaw and Taxiwalas and they are paid on the basis of room tariff of the day. The ld Assessing Officer disallowed ₹ 50000/- out of the same. The ld CIT(A) confirmed the order of the ld Assessing Officer. 5. The ld Authorised Representative submitted that in appellant s own case for Assessment Year 2008-09 the coordinate bench has accepted 12.73% as genuine commission whereas in the present year the percentage is only 12.28% of the turnover. So, disallowance may be deleted. 6. The ld DR relied upon the order of the ld AO an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1698/- on purchase of property in Assessment Year 2003-04 but sold on 24.06.2009. Therefore, the claim of the assessee is that assessee s case is squarely covered by the decision of Hon'ble Delhi High Court in case of CIT Vs. Mithilesh Kumari 92 ITR 9 and Bombay High Court in case of Shri Nirmal Commercial Ltd Vs. CIT 193 ITR 694. 11. The ld Departmental Representative vehemently contested and defended the orders of the lower authorities. 12. We have carefully considered the rival contentions. The limited issue in this ground of appeal is that assessee has purchased one property in 2003-04 but possession of the property was taken on 12.10.2006 which was sold on 24.06.2009. The assessee has purchased the property for ₹ 6667472/- and has also paid interest thereon. The assessee indexed cost of acquisition as well as the interest paid considering the same as cost of acquisition and worked out the same at ₹ 13220208/- and shown long term capital gain of ₹ 779793/-. The ld Assessing Officer considered that the property is not held by the assessee for 36 months and therefore, is short term capital gain. Therefore, he did not allow the interest as the cost of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Ltd (supra) as held by Hon'ble Delhi High Court in Jai Parabolic Springs Ltd (supra) as well as Hon'ble Bombay High Court in case of CIT Vs. Pruthivi Brokers and Shareholders Pvt. Ltd 349 ITR 336. Therefore, according to us the ld CIT(A) should have examined the claim of the assessee of allowability of the above expenditure of ₹ 1639790/- as allowable interest expenditure against the business income. In view of this we set aside this ground of appeal to the file of the ld CIT(A). In the result ground No. 4 of the appeal of the assessee is allowed accordingly. 17. In the result appeal of the assessee is allowed with above directions for statistical purposes. 18. Now we come to the appeal of the revenue wherein, following grounds are raised:- 1 . That the Ld . CIT ( A ) erred in deleting the addition of Rs . 34,40,831 /- made on account of Short Term Capital Gain on the sale of property DW0078 Block - S, Nirvana Country South City, Gurgaon without appreciating the fact that the assessee had sold ownership rights to the purchaser which he had obtained vide conveyance deed dated 12 . 10 . 2006, as is evident from the sale deed dated 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
