2010 (2) TMI 811

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.... has filed this appeal challenging the impugned order of the Ld CIT(A)-XII,Mumbai dated 15.12.2008 for the A.Y. 2005-06.   2. The assessee has taken the following two effective Grounds :   " 1. The learned CIT(Appeal) arred in allowing part interest of Rs.41,936 (proportionate interest pertaining to allotted shares) instead of allowing full interest of Rs.6,50,330 paid for no. of share....

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....part of cost of purchase.The assessee also had applied for 8,76,000/- shares of NTPC Ltd.through Public Issue and for the said purpose,the assessee took 90% of the finance form M/s.J.M.Leasing Consultant Pvt Ltd. And paid the interest of Rs.3,87,317/- at the rate of 17% p.a.for 17 days on the amount borrowed of Rs.4,88,80,800/-.The assessee was allotted 73403 shares of NTPC Ltd.and the assessee ca....

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....he purpose of payments of the shares allotted by the Punjab National Bank and NTPC Ltd.The Ld CIT(A),therefore, proportionately allowed the interest pertaining to the allotted shares treating the same as the cost of acquisition u/s.48 and finaly directed the A.O to allow Rs.41,936/- as the cost of acquisition u/s.48 while working out the capital gain.Now the assessee in in appeal before us.  ....

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....see and hence, the interest paid to the financiers on the entire borrowed money has to be allowed and same cannot be restricted to the extent of shares allooted.In our opinion, the assessee has to succeed on this ground. As rightly submitted by the Ld Counsel, the entire money has been borrowed by the assessee,with the sloe purpose for acquiring the shares of the Punjab National Bank and NTPC Ltd.....