TMI Blog2000 (11) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case, and having regard to the provisions of sections 48 and 55(2) of the Income-tax Act, 1961, the Tribunal was right in holding that the mortgage expenses incurred in connection with the acquisition of the property and the interest payable on the mortgaged amounts which have been utilised as part of the consideration, would form part of the cost of acquisition of the property for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cost of the stamp papers. The assessee claimed that the cost of execution of the mortgage as also the amount of interest paid to the mortgagee till the date of the sale of the property, a part of which was sold in the assessment year 1973-74 and the remaining part in the assessment year 1974-75, was required to be added to the purchase price while computing the cost of acquisition. That cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing such assets into existence and to put them in working condition. In case money is borrowed by a newly started company which is in the process of constructing and erecting its plant, the interest incurred before the commencement of production on such borrowed money can be capitalised and added to the cost of the fixed assets." Here, there can be no doubt that the cost of acquisition to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbering the same. Payment of consideration for the sale indisputably having been made with the borrowed funds, the borrowing directly related to the acquisition and, interest paid thereon would form part of the cost of acquisition. The facts of the case therefore clearly fall within the ratio of the judgment of the Supreme Court in the case of Challapalli Sugars Ltd. [1975] 98 ITR 167. The q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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