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TMI Blog2018 (12) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... 06, in response to notice under section 148 of the I.T. Act, 1961. The A.O. noted that the assessee declared income under the head "Short Term Capital Gains" to the tune of Rs. 3,62,847/-. In support of the capita! gain computation, the assessee has placed on record P & L A/c from where it was noticed that assessee has claimed certain expenses which are not as per the computation of capital gains under section 48 of the Income Tax Act, 1961, which are Bank charges, Brokerage paid, Depreciation, Interest on loan, Interest on TDS, Professional Expenses, Short and Excess transfer fees, Miscellaneous Expenses and Bank charges (ICICI). The A.O. referred to Section 48 of the I.T. Act because the computation of capital gain made by assessee was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance of interest on loan Rs. 2,80,336/- and giving up the remaining claim of disallowance of other expenses. The Ld. CIT(A) noted that the main contention of the assessee is that interest on borrowed capital used for the acquisition of the asset should be included in the cost of acquisition as per Section 48(ii) of the I.T. Act. The Ld. CIT(A), however, noted that interest paid by the assessee is towards service of the loan and not a part of the capital asset. Since the interest on borrowed capital is also allowed as revenue expenditure under the Act, therefore, it cannot be considered as capital expenditure. This ground of appeal of assessee were dismissed. As regards the reopening of the assessment, Ld. CIT(A) noted that assessee did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities below regarding disallowance of interest of Rs. 2,80,336/- and submitted that interest was paid on borrowed funds which was utilized for acquisition of an asset. Therefore, assessee is entitled for inclusion of the cost of the interest in the cost of acquisition of asset as per Section 48(ii) of the I.T. Act. In support of his contention, he has relied upon the following decisions : (i) Mr. Praveen Gupta vs. ACIT (2012) 20 taxmann.com 309 (Del.) (Tribu.) (ii) CIT vs. Mithlesh Kumar (1973) 92 ITR 9 (Del.) (HC) (iii) Pratibha Paliwal vs. ACIT (2012) 19 taxmann.com 355 (Del.) (Tribu.) (iv) Gayatri Maheshwari vs. ITO, Ward-1(2), Jodhpur (2017) 88 taxmann.com 757 (Jodhpur) (Tribu.) 5. On the other hand, Ld. D.R. relied upon the or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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