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Interest paid for acquisition of the shares is part of cost of acquisition

DCIT vs. Fritz D. Silva (ITAT Mumbai)

 S. 48: Interest on borrowed money utilized for acquiring shares can be capitalized as cost of acquisition

 The controversy 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. 
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Therefore, having regard to the factual findings of the CIT(A), in our view, the legal position as propounded by the Hon’ble Madras High Court in the case of Trishul Investments Ltd (supra) supports the plea of the assessee that interest paid for acquisition of the shares would partake the character of cost of shares and, therefore, assessee had rightly capitalized the interest along with the cost of acquisition for the purpose of computing capital gains.


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