Indexed cost of interest paid for acquisition of property not allowable

Housing & Hospitality Pvt. Ltd. Vs ITO (ITAT Pune)

Interest on loans borrowed for acquisition of flats which is allowable u/s 24 cannot be capitalized: ITAT Pune

Introduction: In a recent case, Housing & Hospitality Pvt. Ltd. contested an appeal against the order of the National Faceless Appeal Centre, Delhi, dated 21.08.2023, pertaining to the assessment year 2015-16. The key dispute centered around the disallowance of deductions under section 48(ii) of the Income Tax Act related to the indexed cost of interest paid for the acquisition of a property sold by the assessee.

Grounds of Appeal: The appellant presented several grounds of appeal, challenging the disallowance made by the Assessing Officer (AO) and the decision of the Commissioner of Income Tax (Appeals) [‘CIT(A)’]. The primary contentions included objections to the disallowance under section 48(ii) and the denial of deduction amounting to Rs.24,38,826/- under the same section. Additionally, the appellant sought leave to add, modify, delete, or amend the grounds of appeal.

Additional Grounds of Appeal: The appellant introduced additional grounds of appeal, contesting the disallowance of interest paid for the acquisition of the properties, the charge of interest under section 234B of the Income Tax Act, and the plea to add/alter/amend any grounds of appeal.

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