TaxTMI 
TaxTMI 
2018 (2) TMI 1527
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....t law, facts and circumstances of the case. 2) The CIT has erred in not allowing the stamp duty and registration charges of Rs. 384449/- as part of the cost of the acquisition of the flat and also the interest payment of Rs. 7,00,700/- to ICICI Bank for the Loan availed for acquiring the Flat while computing the short term capital gains on sale of the Flat. 3) He has erred in stating that even in the S.55 (2) of the Act , cost of acquisition means the amount of the purchase price paid to the previous owner or the seller of the property only. As per the provisions of S.55 (2) (b) , the cost of acquisition of the asset to the assessee or the fair market value of the asset on the 1st day of April 1981 shall be the cost of the....
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....rt of the cost of acquisition and the same are to be reduced. 4. Aggrieved by the assessment order, the assessee preferred an appeal to the first appellate authority. The CIT(A) confirmed the computation made by the Assessing Officer as regards short term capital gains. The relevant finding of the CIT(A) reads as follows: 4. "Section 48 of the Act provides for computation of capital gains in the manner indicated therein. Capital gains thus, is computed by deducting from the consideration received on transfer of a capital asset, the cost of acquisition, the cost of improvement and the expenditure incurred in connection with the transfer. In the instant case of the appellant, what is to be allowed as deduction both for the statuto....
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....ecisions relied on by the appellant is totally misplaced and are not applicable to the case of them. The Hon'ble Supreme Court decision is not applicable to the appellant since the same is on interest paid before the commencement of production on amounts borrowed for the acquisition and installation of plant and machinery. The Hon'ble Madras High Court decision is also not applicable to the case of the appellant since the decision is on an asset which was purchased and immediately then mortgaged to avail loan which in turn to be paid for the asset which was purchased. Taking into account all the above, I am of the considered opinion that the appellant has no case to claim for deduction since the Act doesn't provide for the same." 5. The ....
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....ost of acquisition, the cost of improvement and the expenditure incurred in connection with the transfer of the impugned property. The CIT(A) further relied on section 55(2) of the I.T. Act and stated that cost of acquisition means the amount of purchase price paid to the previous owner or seller of the property only. 6.3 Section 55 (2) has 4 clauses, clause (a) , clause (aa) , clause (ab) and clause (b) . The first 3 clauses deals with good will, tenancy rights, stage carriage permit, share or any other security within the meaning of the securities contract Act and equity shares or shares allotted to a share holder. Only in clause (a) and clause (aa) there is reference to 'purchase price paid'. In clauses (ab) and clause (b), the cost o....
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....the dictum laid down by the Hon'ble Supreme Court in the case of Challapalli Sugars Ltd. vs. CIT 98 ITR 167. The Hon'ble Supreme Court in the case of Challapalli Sugars held that as the expression 'actual cost' has not been defined. It was held by the Hon'ble Supreme Court that it would be necessary to ascertain the connotation of the expression, in accordance with the normal rules of accountancy prevailing in commerce and industry. The Hon'ble Supreme Court opined that the accepted accountancy rule for determining cost of fixed asset is to include all expenditure necessary to bring such asset in to existence and put them in working condition. It was held by the Hon'ble Apex Court that in case money is borrowed by a newly started company wh....