2021 (10) TMI 91

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....is justified in confirming the addition of Rs. 6,84,423 made by the Assessing Officer as unexplained money u/s. 69A of the I.T. Act. I shall adjudicate the above issues as under:- (i) Whether interest paid on loan goes to increase the cost of acquisition 3. The assessee had purchased a vacant site from Bangalore Development Authority by taking loan from ICICI Bank. The total interest paid amounting to Rs. 2,00,369 was claimed as cost of acquisition of asset u/s. 48 of the I.T. Act while computing the long term capital gains (when the site was sold during the relevant assessment year). The Assessing Officer denied the amount of Rs. 2,00,369 as part of cost of acquisition by holding that the interest expenditure will be claimed as deduction....

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....ecided by the A.O. afresh. Accordingly, this issue is restored to the files of the A.O. The A.O. is directed to examine the interest amounting to Rs. 2,00,369 which was claimed as deduction u/s. 24 of the I.T. Act. In the event, the assessee establishes that there is no claim of deduction u/s. 24 of the I.T. Act in respect of interest paid amounting to Rs. 2,00,369, the A.O. shall consider the claim that interest paid whether it goes to increase the cost of asset in light of the dictum laid down by the Hon'ble Andhra Pradesh High Court in the case of Addl. CIT v. K.S. Gupta (supra) and shall take a decision in accordance with law. 3.5. In the result, the ground relating to computation of capital gains in respect of interest paid on loa....

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....t, initiated for unexplained money brought to tax u/s. 69A of the Income Tax Act." 4.1. Aggrieved, the assessee preferred an appeal to the first appellate authority. Before the first appellate authority, the assessee submitted additional evidence under Rule 46A of the I.T. Rules to prove the source of gifts. The CIT(A), after extracting the provisions of section 69A of the I.T. Act, did not admit the additional evidence for the reason that the assessee was given ample opportunity during the course of assessment proceedings and the additional evidence produced by the assessee was not considered by the CIT(A). Thus, the CIT(A) confirmed the view taken by the Assessing Officer. 4.2. Aggrieved, the assessee has raised this issue before the Tr....