Mrs. Rinku Rupen Mody, Ahmedabad V. The IncomeTax Officer, Ward-8(4), Ahmedabad

ITA 1807/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8600 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 18-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Assessee Lawyers: T P HEMANI
• Keywords: Capital asset; Additional evidence; Cost of acquisition

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER , .., ./ ITA NO. 1807/AHD/2015 / ASSESSMENT YEAR: 2011-12 MRS. RINKU RUPEN MODY, 34, SHIVALIK VILLA, B/H. RAJPATH CLUB, BOPAL, AHMEDABAD-58 PAN : AGUPM 7948 R VS. THE ITO, WARD 8(4), AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI T.P. HEMANI, AR REVENUE BY : SHRI O.P. MEENA, SR DR # / DATE OF HEARING : 11/08/2017 ( * / DATE OF PRONOUNCEMENT : 07/09/2017 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST THE ORDER OF THE LD. CIT(A)-8, AHMEDABAD DATED 01.04.2015 PASSED FOR ASSESSMENT YEAR 2011-12. THOUGH THE ASSESSEE HAS TAKEN SIX GROUNDS OF APPEAL, BUT HER GRIEVANCE REVOLVES AROUND A SINGLE ISSUE VIZ. THE L D. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST EXPENSES AM OUNTING TO RS.24,93,646/-. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED HER RETURN OF INCOME ON 30.09.2011 DECLARING TOTAL INCOME OF RS.1 6,04,748/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT A ND A NOTICE UNDER SECTION 143(2) OF THE INCOME-TAX ACT, 1961 (HEREINA FTER REFERRED TO AS THE ITA NO. 1807/AHD/2015 MRS. RINKU RUPEN MODY VS. ITO AY : 2011-12 - 2 THE ACT) WAS ISSUED ON 23.08.2012. ON SCRUTINY O F THE ACCOUNTS, IT REVEALED TO THE ASSESSING OFFICER THAT THE ASSESSEE HAD SHOWN INCOME FROM OTHER SOURCES AT RS.1,89,468/-. IT ALSO REVEA LED TO THE ASSESSING OFFICER THAT THE ASSESSEE HAD CLAIMED A DEDUCTION O F RS.25,09,546/- UNDER SECTION 57 OF THE ACT. THE ASSESSING OFFICER OBSER VED 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. T HE ASSESSING OFFICER WAS OF THE VIEW THAT THERE IS NO DIRECT NEXUS BETWE EN THE INCURRENCE OF THE EXPENDITURE VIS--VIS THE EARNING OF INCOME WHICH I S ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. ACCORDINGLY HE D ISALLOWED 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. A PART FROM CHALLENGING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER, THE ASSESSEE RAISED AN ALTERNATIVE PLEA. IT WAS PLEADED BY THE ASSESSEE T HAT THE INTEREST EXPENDITURE OF RS.24, 93,646/- WAS INCURRED IN RESP ECT OF FUNDS BORROWED FOR ACQUISITION OF CAPITAL ASSETS WHICH WERE SOLD D URING THE YEAR UNDER CONSIDERATION; HENCE, INTEREST MAY BE TREATED AS PA RT OF COST OF ACQUISITION OF SUCH ASSETS AND THE SAME MAY BE ALLOWED UNDER SE CTION 48 OF THE ACT. THIS ADDITIONAL GROUND WAS RAISED ON THE STRENGTH O F THE HONBLE SUPREME COURTS DECISION IN THE CASE OF NATIONAL TH ERMAL POWER CO. LTD. VS. CIT, REPORTED IN (1998) 229 ITR 383 (SC). IT W AS CONTENDED BY THE ASSESSEE THAT NO NEW DISCOVERY OF FACT WOULD REQUIR E TO BE INVESTIGATED. IT IS JUST AN ALTERNATIVE PLEA AND BASED ON THE MATERI AL ALREADY AVAILABLE ON RECORD. THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS AND ALSO PROVIDED THE ADDITIONAL EVIDENCES. LD. CIT(A) HAS CALLED FOR A R EMAND REPORT AND THE COPY OF WHICH IS AVAILABLE ON PAGE NO.138 OF THE PA PER-BOOK. THE ITA NO. 1807/AHD/2015 MRS. RINKU RUPEN MODY VS. ITO AY : 2011-12 - 3 ASSESSEE HAS FILED A REJOINDER TO THE REMAND REPORT AND THE COPY OF THE SAME IS ALSO PLACED AT PAGE NO.140-153 OF THE PAPER -BOOK. LD. CIT(A) SOMEHOW DID NOT ENTERTAIN THIS ALTERNATIVE CONTENTI ON OF THE ASSESSEE ON THE GROUND THAT SUFFICIENT OPPORTUNITIES WERE GIVEN TO THE ASSESSEE BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS. ACCORDINGLY THE LD. CIT(A) HAS REJECTED THE CONTENT IONS OF THE ASSESSEE AND CONFIRMED THE DISALLOWANCE. 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE CONT ENDED THAT IF VERY TAXABILITY OF THE ASSESSEE IS GOING TO THE EFFECTED , THEN THE ASSESSEE HAS EVERY RIGHT TO TAKE ALL POSSIBLE PLEAS TO SAVE ITSE LF FROM THE TAXABILITY OF THOSE AMOUNTS. HE POINTED OUT THAT A CBDT CIRCULAR NO.14 OF 1955 DATED 11.04.1955 WAS BROUGHT TO THE NOTICE OF THE LD. CIT (A) WHICH CONTEMPLATES THAT THE DEPARTMENT MUST NOT TAKE ADVANTAGE OF IGNO RANCE OF AN ASSESSEE AS TO HIS RIGHTS AND IT IS THEIR DUTIES TO ASSIST A TAX PAYER IN EVERY REASONABLE WAYS, AND THAT THEY SHOULD POINT OUT TO THE TAX PAYER IF ANY REFUND OR RELIEF IS DUE TO HIM. HE FURTHER CONTEND ED THAT, WHILE VERIFYING THE DOCUMENTS SUBMITTED BY THE ASSESSEE ON THIS ALT ERNATIVE PLEA, THE LD. ASSESSING OFFICER DID NOT FIND ANY DEFECTS. THE ON LY OBJECTION RAISED BY HIM IS THAT THIS IS THE THIRD OCCASION WHEN THE ASS ESSEE HAS CHANGED HER STAND. ACCORDING TO THE LD. COUNSEL FOR THE ASSESSE E, THE ASSESSEE COULD ALWAYS TAKE HER DEFENSE AS ADMISSIBLE IN LAW. BY ME RE CHANGE OF STAND WOULD NOT AUTHORIZE THE ASSESSING OFFICER TO LEGALI ZE THE ILLEGALITIES ON SUCH TECHNICAL PLEAS. TAKING US THROUGH THE EXPLAN ATION OF THE ASSESSEE SUBMITTED BY WAY OF WRITTEN SUBMISSIONS, LD. COUNSE L FOR THE ASSESSEE CONTENDED THAT THE ASSESSEE HAS PURCHASED AN AGRICU LTURAL LAND ON 20.03.2008 AT JODHPUR VILLAGE FOR A TOTAL CONSIDERA TION OF RS.1,72,44,014/-. THIS LAND WAS SOLD ON 01.04.2010 FOR A TOTAL CONSID ERATION OF ITA NO. 1807/AHD/2015 MRS. RINKU RUPEN MODY VS. ITO AY : 2011-12 - 4 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 T AX AS SHORT TERM CAPITAL GAIN DURING THE YEAR UNDER CONSIDERATION. THE ASSE SSEE HAS POINTED OUT THAT A SUM OF RS.52,50,000/- WAS RECEIVED BY HER O N 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. THES E AMOUNTS HAVE BEEN REPAID BY THE ASSESSEE AFTER RECEIVING THE SUMS FRO M SHRI RUPEN MAYURBHAI MODI. THE ASSESSEE HAS TABULATED THE DET AILS EXHIBITING THE AMOUNTS RECEIVED FROM SHRI RUPEN M. MODY AND HOW TH ESE AMOUNTS WERE REPAID TO RIDDHI TRADE SERVICES PVT. LTD. AND NAVKAR BROKING SERVICES PVT. LTD. SUCH DETAILS ARE COMPILED BY HE R IN HER WRITTEN SUBMISSIONS FILED BEFORE THE FIRST APPELLATE AUTHOR ITY 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., NAV KAR BROKING SERVICES PVT. LTD. AS WELL AS KOTAK MAHINDRA BANKS BOOKS. W ITH THE HELP OF THESE THREE DOCUMENTS, THE ASSESSEE HAS DEMONSTRATED AS T O HOW THE AMOUNTS HAVE COME TO HER AND HOW THEY WERE REPAID TO THESE TWO CONCERNS. THE ASSESSEE HAS ALSO PRODUCED THE DETAILS SHOWING THE AMOUNTS RECEIVED FROM THESE TWO CONCERNS WHICH WERE DEPOSITED IN CEN TURION BANK ACCOUNT AND HOW THESE AMOUNTS WERE GIVEN TO THE VEN DORS. LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THESE ASPECTS HAV E NOT BEEN DISPUTED BY THE ASSESSING OFFICER IN THE REMAND REPORT. ON THE STRENGTH OF THESE DETAILS, HE SUBMITTED THAT THE INTEREST EXPENDITURE DESERVES TO BE INCLUDED IN THE COST OF ACQUISITION AND THE ASSESSEE DESERVE S TO BE ALLOWED DEDUCTION OF SUCH EXPENDITURE IN THE SHAPE OF COST OF ACQUISITION OF ASSETS WHILE COMPUTING THE CAPITAL GAIN ARISING TO THE ASS ESSEE ON SALE OF SUCH ASSETS. IN SUPPORT OF HIS CONTENTIONS, HE PLACED R ELIANCE ON THE ORDER OF THE TRIBUNAL IN THE CASE OF SHRI ASHOKKUMAR S. VASW ANI VS. DCIT, ITA NO. 1807/AHD/2015 MRS. RINKU RUPEN MODY VS. ITO AY : 2011-12 - 5 RENDERED IN ITA NO.1528/AHD/2012, DATED. 24.01.2017 . HE ALSO RELIED UPON THE DECISION OF THE TRIBUNAL IN THE CASE OF DC IT VS. SHRI FRITZ D. SILVA, RENDERED IN ITA NO.236/MUM/2010, DATED 08.05 .2015. 5. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHE R HAND, RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. THE FIRST QUESTION FOR OUR ADJUDICATION IS WHETHER THE COST OF ACQUISITION OF CAPITAL ASSETS UNDER SEC TION 48(2) WOULD INCLUDE INTEREST AMOUNT QUA BORROWED FUNDS USED FOR ACQUIRI NG SUCH ASSETS OR NOT. THIS ASPECT HAS BEEN CONSIDERED BY THE ITAT, MUMBAI BENCH AS WELL AS AHMEDABAD BENCH IN THE DECISIONS REFERRED BY THE LD. COUNSEL FOR THE ASSESSEE. WE DEEM IT APPROPRIATE TO TAKE NOTE OF TH E DISCUSSION MADE BY THE TRIBUNAL IN THESE TWO DECISIONS. FIRST WE TAKE THE RELEVANT PART OF THE DISCUSSION MADE BY THE TRIBUNAL IN THE CASE OF SHRI FRITZ D. SILVA (SUPRA), WHICH READS AS UNDER:- 3. WE HAVE CONSIDERED THE RIVAL STANDS. THE CONTRO VERSY BEFORE US IS AS TO WHETHER THE INTEREST PAID BY THE ASSESSEE ON LOANS TAKEN FOR ACQUIRING THE SHARES IN THE PAST CAN BE ALLOWED AS A DEDUCTION U/ S 48 AS COST OF ACQUISITION WHILE COMPUTING CAPITAL GAIN ON SALE OF SUCH SHARES. ON THIS ASPECT, THE LD. REPRESENTATIVE FOR THE RESPONDENT A SSESSEE RELIED UPON THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE O F TRISHUL INVESTMENTS LTD. 305 ITR 434(MADRAS) WHICH IS DIREC TLY ON THE POINT. IN THE CASE BEFORE THE HONBLE 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 GAI NS. APART FROM OTHER ISSUES, THE REVENUE HAD CONTESTED THE ORDER OF THE TRIBUNAL WHEREIN THE ASSESSEE WAS ALLOWED THE INTEREST LIABILITY INCURRE D ON BORROWINGS UTILIZED TO ACQUIRE THE SHARES, WHILE DETERMINING THE COST O F ACQUISITION OF SHARES FOR THE PURPOSE OF COMPUTING CAPITAL GAIN. AS PER THE H ONBLE HIGH COURT, THE TRIBUNAL WAS CORRECT IN HOLDING THAT THE INTEREST P AID FOR ACQUISITION OF SHARES WOULD PARTAKE OF THE CHARACTER OF COST OF SH ARES AND, THEREFORE, THE SAME WAS RIGHTLY CAPITALIZED ALONG WITH THE COST OF ACQUISITION OF SHARES. ITA NO. 1807/AHD/2015 MRS. RINKU RUPEN MODY VS. ITO AY : 2011-12 - 6 THE HONBLE HIGH COURT AFFIRMED THE DECISION OF THI S 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 PROPOUN DED BY THE HONBLE MADRAS HIGH COURT FULLY COVERS THE CONCLUSION DRAWN BY THE CIT(A) IN THE PRESENT CASE. NOTABLY, IT IS NOT DISPUTED BY TH E REVENUE THAT THE INTEREST COSTS IN QUESTION WERE INCURRED ON THE FUN DS UTILIZED FOR ACQUISITION OF SHARES IN THE PAST. IN FACT, AS PER THE STATEMENT OF FACTS FILED BEFORE THE CIT(A), THE ASSESSEE HAD TABULATED THE A MOUNT OF INTEREST CAPITALIZED ALONG WITH THE COST OF SHARES, WHICH WE RE PURCHASED IN THE PAST. THE ASSESSEE HAD ALSO ASSERTED BEFORE THE CIT(A) WI THOUT REBUTTAL, THAT THE INTEREST COST SO INCURRED IN THE PAST WAS NOT CLAIM ED AS A DEDUCTION AGAINST ANY OTHER INCOME. BE THAT AS IT MAY, IN SO FAR AS T HE FACTUAL POSITION IS CONCERNED, THERE IS NO DENIAL BY THE REVENUE THAT M ONIES BORROWED HAVE BEEN UTILIZED FOR ACQUISITION OF SHARES IN QUESTION . THEREFORE, HAVING REGARD TO THE FACTUAL FINDINGS OF THE CIT(A), IN OUR VIEW, THE LEGAL POSITION AS PROPOUNDED BY THE HONBLE MADRAS HIGH COURT IN THE CASE OF TRISHUL INVESTMENTS LTD (SUPRA) SUPPORTS THE PLEA OF THE AS SESSEE THAT INTEREST PAID FOR ACQUISITION OF THE SHARES WOULD PARTAKE THE CHA RACTER OF COST OF SHARES AND, THEREFORE, ASSESSEE HAD RIGHTLY CAPITALIZED TH E INTEREST ALONG WITH THE COST OF ACQUISITION FOR THE PURPOSE OF COMPUTING CA PITAL GAINS. THE CONCLUSION OF THE CIT(A) THUS DESERVES TO BE AFFIRM ED. IN THE CASE OF SHRI ASHOKKUMAR S. VASWANI (SUPRA), THE TRIBUNAL HAS HELD AS UNDER:- 4. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO R IVAL SUBMISSIONS. THE QUESTION BEFORE US AS TO WHETHER COST OF ACQUISITIO N OF A CAPITAL ASSET U/S.48 CLAUSE (II) INCLUDES INTEREST AMOUNT QUA THE BORROW ED FUNDS USED FOR PURCHASING THE SAME. AND MORE PARTICULARLY IN CASE WHEN THERE IS NO DISPUTE ABOUT DIRECT NEXUS THEREOF AS THE FACT OF I NSTANT CASE. THERE IS NO DISPUTE THAT PROVISIONS IN THE ACT NOWHERE PROVIDE SPECIFIC DEFINITION OF THE COSTS INCURRED OR TO BE TAKEN IN COMPUTING CAPITAL GAINS. THERE IS FURTHER NO QUARREL THAT ALL THE ABOVE STATED DECISIONS DECI DE THE VERY ISSUE AGAINST THE REVENUE. THE CIT(A)S CASE ON THE OTHER HAND IS THAT THEY PERTAIN TO THE OLD ACT. WE FIND THAT THE SAME IS FACTUALLY INC ORRECT AT LEAST SO FAR AS HONBLE ANDHRA PRADESH AND MADRAS HIGH COURTS DECI SIONS ARE CONCERNED. IT IS FURTHER EVIDENT TO US THAT THEIR LORDSHIPS OF THE APEX COURT IN CHALLPALLI SUGARS (SUPRA) HAD RATHER EXAMINING THE VERY ISSUE PERTAINING TO COST OF FIXED ASSETS TO INCLUDE SIMILAR COST OF INTEREST. L EARNED DEPARTMENTAL REPRESENTATIVE FAILS TO REBUT THIS FACTUAL POSITION . WE FURTHER NOTICE THAT THIS TRIBUNAL CO-ORDINATE BENCH DECISION IN ACIT VS . AURANGABAD HOLIDAY ITA NO. 1807/AHD/2015 MRS. RINKU RUPEN MODY VS. ITO AY : 2011-12 - 7 RESORTS (P) LTD. (2007) 118 ITD 1 (PUNE) RELIES UPO N HONBLE BOMBAY HIGH COURTS DECISION IN CIT VS. SMT. GODAVARIDEVI SARAF (1978) 113 ITR 589 (BOM.) TO HOLD THAT EVEN JUDGMENTS OF HONBLE NON J URISDICTIONAL HIGH COURTS BIND THIS TRIBUNAL. THE CIT(A)S LATTER REAS ON(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 REIT ERATE TRITE PROPOSITION OF LAW THAT EXPRESSIONS USED IN A FISCAL STATUTE ARE T O BE INTERPRETED WITHOUT SUPPLYING ANY FURTHER EMPHASIS AND MORE SO WHEN THE RE IS NO ANY AMBIGUITY THEREIN. WE THUS ADOPT LITERAL INTERPRETA TION OF THE ABOVE CLAUSE TO CONCLUDE THAT COST OF ACQUISITION OF THE ASSET I NCLUDES ASSESSEES INTEREST COST AS WELL SINCE INCURRED ON FUNDS BORROWED FOR T HE PURPOSE OF ACQUISITION OF THE CAPITAL ASSET SOLD HAVING DIRECT NEXUS WITH THE SAME. THE ASSESSEES SOLE SUBSTANTIVE GROUND RAISED IN THE INSTANT APPEA L IS ACCEPTED. 7. THE NEXT QUESTION IS WHETHER THE ASSESSEE HAS DE MONSTRATED THE NEXUS BETWEEN THE FUNDS AVAILED BY HER ON INTEREST FOR PURCHASING THE ASSET OR NOT. NO DOUBT THAT BEFORE THE ASSESSING O FFICER THE ASSESSEE DID NOT TAKE THIS PLEA, BUT BEFORE THE FIRST APPELLATE AUTHORITY SHE NOT ONLY RAISED THIS PLEA BUT ALSO ELABORATED HER STAND IN H ER DETAILED WRITTEN SUBMISSIONS RUNNING INTO 21 PAGES. SHE HAS ANNEXED ALL SUPPORTING DOCUMENTS. THE LD. FIRST APPELLATE AUTHORITY CALLED FOR THE REMAND REPORT ON THESE DOCUMENTS AND THEREAFTER PROVIDED AN OPPOR TUNITY TO THE ASSESSEE TO REBUT THE REMAND REPORT. THE ASSESSEE H AS SUBMITTED HER REBUTTAL WHICH IS AVAILABLE ON PAGE NOS. 142 TO 152 OF THE PAPER-BOOK. WE HAVE ANALYZED ALL THESE DETAILS. WE ARE SATISFIED THAT THE ASSESSEE HAS DEMONSTRATED THE AVAILABILITY OF FUNDS. SHE HAS TA KEN THE FUNDS FROM RIDDHI TRADE SERVICES PVT. LTD. AND NAVKAR BROKING SERVICES PVT. LTD. THESE FUNDS WERE DEPOSITED IN CENTURION BANK. OUT OF THESE FUNDS, PAYMENTS WERE MADE TO FIVE INDIVIDUALS VIZ. (1) GOV INDBHAI SHANKERBHAI, (2) PATEL KANTABEN GOVINDBHAI, (3) PATEL MUKESHBHAI GOVINDBHAI, (4) ITA NO. 1807/AHD/2015 MRS. RINKU RUPEN MODY VS. ITO AY : 2011-12 - 8 PATEL ANANDIBEN MUKESHBHAI AND (5) DIVESH G. PATEL. PAYMENTS TO THESE PERSONS WERE MADE FROM CENTURION BANK ACCOUNT. BAN K STATEMENTS OF THIS BANK WERE SUBMITTED BEFORE THE LD. CIT(A). AF TER RECEIVING THE FUNDS FROM RUPEN M. MODI, THE AMOUNTS WERE REPAID TO RIDD HI TRADE SERVICES PVT. LTD. AND NAVKAR BROKING SERVICES PVT. LTD. TH E ASSESSEE HAS SUBMITTED THE DETAILS AS TO HOW THE FUNDS HAVE BEEN RECEIVED BY HER FROM SHRI RUPEN M. MODI AND HOW THESE FUNDS HAVE BEEN TR AVELLED TO RIDDHI TRADE SERVICES PVT. LTD. AND NAVKAR BROKING SERVICE S PVT. LTD. THUS, THE ASSESSEE HAS DEMONSTRATED HER STAND OF ACQUIRING FU NDS AS WELL AS ITS USES. IF THESE DETAILS ARE LOOKED INTO IN THE LIGHT OF PR OPOSITION PROPOUNDED IN THE AFORESAID TWO ORDERS OF THE ITAT, THEN IT WOULD REVEAL THAT THE ASSESSEE IS ENTITLED FOR INCLUSION OF THE INTEREST EXPENDITURE IN THE COST OF ACQUISITION. THE SAME COST IS TO BE SET OFF AGAINST THE SHORT TERM CAPITAL GAIN AROSE TO THE ASSESSEE. IT IS PERTINENT TO OBS ERVE THAT ON PAGE NO.84 OF THE PAPER-BOOK THE ASSESSEE HAS PLACED A WORKING OF INTEREST EXPENDITURE INCURRED BY HER FOR PURCHASE OF LAND AT JODHPUR. S HE HAS WORKED OUT A SUM OF RS. 23,29,085/-. THIS INTEREST EXPENDITURE DESERVES TO BE SET OFF AGAINST THE SHORT TERM CAPITAL GAIN. WE DIRECT THE ASSESSING OFFICER TO ALLOW THE SET OFF OF THIS EXPENDITURE AGAINST THE S HORT TERM CAPITAL GAIN. IN THIS WAY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLO WED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 7 TH SEPTEMBER, 2017 AT AHMEDABAD. SD/- SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED, 07/09/2017 **BT ITA NO. 1807/AHD/2015 MRS. RINKU RUPEN MODY VS. ITO AY : 2011-12 - 9 # ()* +*/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. - / CONCERNED CIT 4. - ) ( / THE CIT(A)- 5. * (( , , /DR,ITAT, AHMEDABAD, 6. 6 / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) ITAT, AHMEDABAD