JATNINDER SINGH TANEJA,DELHI vs. ACIT CIRCLE 30(1), NEW DELHI

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ITA 6554/DEL/2025Status: DisposedITAT Delhi26 November 2025AY 2006-073 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 48 of the Act allows deduction of expenditures incurred wholly and exclusively in connection with the transfer of a capital asset, along with the cost of acquisition and improvement. It directed the Assessing Officer to recompute the capital gains accordingly.

What were the facts?

The assessee was aggrieved by the CIT(A)'s direction to allow interest on borrowed capital only up to the date of property acquisition for computing short-term capital gains. The Revenue did not dispute that this direction did not consider the relevant statutory provisions.

What were the issues?

Whether interest on borrowed capital is deductible for computing capital gains only up to the date of acquisition, or if all expenditures related to transfer, acquisition, and improvement are deductible as per Section 48.

Which sections of the Income-tax Act were involved?

Section 48

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI

Before: SHRI SATBEER SINGH GODARA

For Appellant: Shri Rajesh Mahna, Adv. &, Shri Mayank Kouts, Adv
Hearing: 26.11.2025Pronounced: 26.11.2025

Date of hearing 26.11.2025 Date of pronouncement 26.11.2025 ORDER This assessee’s appeal for assessment year 2006-07, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no.ITBA/APL/S/250/2025-26/1081340245(1), dated 30.09.2025 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

Heard both the parties at length. Case file perused.

2.

It emerges during the course or hearing that the assessee/appellant is aggrieved against the CIT(A)’s directions issued to the Assessing Officer, allowing the interest on borrowed the purpose of computing as short term capital gains. It is in this limited context that the Tribunal hereby notices from a perusal of section 48 (i) and (ii) that what all is allowed to be deducted in any expenditure incurred wholly and exclusively in connection with transfer of a capital asset along with cost of acquisition and the improvement therein, as the case may be.

3.

The Revenue could hardly dispute that the CIT(A)’s impugned directions have nowhere considered the above statutory preposition for the purpose of computing the assessee’s capital gains. The tribunal sees merit in his instant sole substantive ground and directs the Assessing Officer to make a fresh computation impugned u/s 48(i) (ii) and allow him all benefit of expenditure incurred on transfer as well as under the latter head of cost of acquisition and cost of improvement thereto as per law in entirety, in very terms.

4.

This assessee’s appeal is allowed.

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