|The Tax Publishers2020 TaxPub(DT) 5102 (Karn-HC)
INCOME TAX ACT, 1961
Where the assessee claimed to have incurred additional Rs. 50 lakhs towards cost of printing and Rs. 7,00,000 as interest on-money borrowed but could not provesion any of the claim then the AO was correct in denying the deduction towards both of such amounts.
Capital gain - Computation - No direct nexus between the loans advanced to the assessee and investment made by the assessee in the property -
Assessee was a doctor by profession, and ran a nursing home, which was a proprietary concern. He entered into an agreement for purchase of a property and subsequently sold it. Assessee claimed to have incurred in additional sum of Rs. 50 lakhs towards acquisition of property and also claimed capitalised interest of Rs. 7,00,000 allegedly incurred towards a loss for acquisition of property. Held:The assessing officer has rightly not granted the benefit of Rs. 50,00,000 to the assessee towards cost of acquisition. It has further been held that there was no direct nexus between the loans advanced to the assessee and investment made by the assessee in the property in the same year and the money has been repaid prior to sale of the property. The tribunal has therefore rightly held that the amount of Rs. 7,00,000 cannot be included in the cost of acquisition.
FAVOUR : Against the assessee.
A.Y. : 2009-10
IN THE KARNATAKA HIGH COURT
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