Parwati Devi Totlani Vs ITO (ITAT Jaipur)
Interest paid on the borrowing made for acquiring Capital Asset (House Property) is part of the cost of acquisition and therefore eligible for indexation and deduction from the Sale Consideration for computation of capital gains.
FULL TEXT OF THE ITAT JUDGEMENT
This is an appeal filed by the assessee against the order of Id. CIT(A)-III, Jaipur dated 28.12.2018 for the assessment years 201011 wherein the limited issue for consideration is non-grant of deduction of interest expenditure as part of cost of construction while computing capital gains u/s 48 of the IT Act.
2. During the course of hearing, the Id. AR submitted that the assessee was allotted a Flat No. T-1/147 in Sector-6, Vidhyadhar Nagar, Jaipur having the measurement of 938.37 SFT by Rajasthan Rajya Sehakari Awasan Sangh Ltd., Jaipur on 12/01/1995 at a total cost of Rs. 4,85,941/-.
3. It was submitted that the assessee took loads of Rs. 2,80,000/- on 01/07/1995 and paid the balance amount from her own source. The assessee incurred interest expense of Rs. 3,93,898/- during the loan tenure since 01/07/1995 to 31/03/2009 and this interest capitalized. No deduction U/s 24 (b) was claimed in the ITRs filed for the various years. The assessee is submitting the copies of ITRs filed during this period with this paper book to prove that no interest was claimed u/s 24(b).
4. It was further submitted that the assessee had sold Flat on 29/07/2009 for Rs. 14,51,000/- (Value under 50C Rs. 14,73,240/-) and long Term Capital Gains on this sale was computed as under:-
Comments are closed.