TaxTMI 
TaxTMI 
2017 (9) TMI 660
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Assessing Officer that the assessee had shown income from other sources at Rs. 1,89,468/-. It also revealed to the Assessing Officer that the assessee had claimed a deduction of Rs. 25,09,546/- under Section 57 of the Act. The Assessing Officer observed that out of this total expenditure claimed under Section 57 of the Act, an expense of Rs. 24,93,646/- had been claimed towards interest. The Assessing Officer was of the view that there is no direct nexus between the incurrence of the expenditure vis-à-vis the earning of income which is assessable under the head "income from other sources". Accordingly he disallowed the interest expenditure and made an addition of Rs. 24,93,646/-. 3. Dissatisfied with the disallowance, the assessee carried the matter in appeal before the ld. First Appellate Authority. Apart from challenging the disallowance made by the Assessing Officer, the assessee raised an alternative plea. It was pleaded by the assessee that the interest expenditure of Rs. 24, 93,646/- was incurred in respect of funds borrowed for acquisition of capital assets which were sold during the year under consideration; hence, interest may be treated as part of cost of acq....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l land on 20.03.2008 at Jodhpur Village for a total consideration of Rs. 1,72,44,014/-. This land was sold on 01.04.2010 for a total consideration of Rs. 2,07,31,356/- to 'Vishwa Infraprojects Pvt. Ltd.'. Thus, there was a gain of Rs. 34,87,342/-. This gain was offered to tax as Short Term Capital Gain during the year under consideration. The assessee has pointed out that a sum of Rs. 52,50,000/- was received by her on 17.03.2008 from Navkar Broking Services Pvt. Ltd. Similarly, a sum of Rs. 72,50,000/- was received from Riddhi Trade Services Pvt. Ltd. These amounts have been repaid by the assessee after receiving the sums from Shri Rupen Mayurbhai Modi. The assessee has tabulated the details exhibiting the amounts received from Shri Rupen M. Mody and how these amounts were repaid to Riddhi Trade Services Pvt. Ltd. and Navkar Broking Services Pvt. Ltd. Such details are compiled by her in her written submissions filed before the First Appellate Authority which is available on page No.31 of the paper-book. The assessee has placed on record the ledger copy of Riddhi Trade Services Pvt. Ltd., Navkar Broking Services Pvt. Ltd. as well as Kotak Mahindra Bank's books. With the help of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... point. In the case before the Hon'ble Madras High Court, the assessee was carrying on the business of investment in shares/securities and the profit derived from sale of shares was held subject to capital gains. Apart from other issues, the Revenue had contested the order of the Tribunal wherein the assessee was allowed the interest liability incurred on borrowings utilized to acquire the shares, while determining the cost of acquisition of shares for the purpose of computing capital gain. As per the Hon'ble High Court, the Tribunal was correct in holding that the interest paid for acquisition of shares would partake of the character of cost of shares and, therefore, the same was rightly capitalized along with the cost of acquisition of shares. The Hon'ble High Court affirmed the decision of this Tribunal that the interest payable on moneys borrowed for acquisition of shares should be added to the cost of acquisition of shares for the purpose of computing capital gains. The aforesaid legal position propounded by the Hon'ble Madras High Court fully covers the conclusion drawn by the CIT(A) in the present case. Notably, it is not disputed by the Revenue that the interest costs in qu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n ACIT vs. Aurangabad Holiday Resorts (P) Ltd. (2007) 118 ITD 1 (Pune) relies upon hon'ble Bombay high court's decision in CIT vs. Smt. Godavaridevi Saraf (1978) 113 ITR 589 (Bom.) to hold that even judgments of hon'ble non jurisdictional high courts bind this tribunal. The CIT(A)'s latter reason(supra) thus has no merit. We are therefore of the opinion that ld. CIT(A)'s reasoning narrated in preceding paragraphs is not sustainable. 5. It is further evident to us that Section 48(ii) of the Act specifically postulates cost of acquisition of the asset instead of mere cost of the asset for the purpose of computing capital gains. We reiterate trite proposition of law that expressions used in a fiscal statute are to be interpreted without supplying any further emphasis and more so when there is no any ambiguity therein. We thus adopt literal interpretation of the above clause to conclude that cost of acquisition of the asset includes assessee's interest cost as well since incurred on funds borrowed for the purpose of acquisition of the capital asset sold having direct nexus with the same. The assessee's sole substantive ground raised in the instant appeal is accepted." 7. Th....