Capitla Gain issue

[HITESH SHAH]

One of our client had acquired commercial premises in 2004 and took the loan for the same. Such premises was decided to be demolished in 2007 and to be newly re-constructed as per the arrangement with the society and developer. However, after demolition the said premises was never developed. Now my client is intending to sell the said commercial premises (though construction is not made)

My query is whether interest expenditure incurred since last 10 years in relation to such premises be allowed as cost of improvement?? Also can he get indexation benefit on such interest expenditure or is it deducted under other heads of income.

AI Summary

Can interest expenses on a demolished property be indexed for tax benefits or deducted under other income categories? A client acquired a commercial property in 2004 with a loan, which was demolished in 2007 for redevelopment. However, the reconstruction never occurred. The client now plans to sell the undeveloped property. The query seeks to determine if the interest expenses incurred over the past ten years can be considered as a cost of improvement for tax purposes and whether indexation benefits on these interest expenses are applicable or if they should be deducted under other income categories.