JUDGMENT K.L. Manjunath, J.— The Revenue has come up in this appeal challenging the legality and correctness of the order dated 07.10.2008 passed by the Income Tax Appellate Tribunal, Bangalore, in ITA No. 1012/BNG/2007, raising the following substantial questions of law: 1. Whether the tribunal was correct in holding that interest payable of a sum of Rs. 37,45,042/- to the Director by 'be assessee company towards loan availed for purchase of the property (asset) should be added to the cost of acquisition of the asset when computing long term capital gains by quantification of the interest alter sale of the properly? 2. Whether the tribunal failed to take into account that the interest component was worked out under the Board meeting minutes dated 24.01.2003 which was the due vide loiter dated 25.01.2006 after the sale of property dated 23.01.2003 indicating only a book entry and actual interest having not paid prior to the sale could not be added as part of cost of acquisition and consequently recorded a perverse finding? 2. The facts of this case are as hereunder: 3. The respondent-Assessee is a Company. By borrowing loan from some of the Directors of the Company, the Company had purchased an immovable property in order to put up a hotel building. The project could not be materialized on account of various reasons. Ultimately, the company sold the properly and while filing the return for computation of the capital gain, the Company claimed a sum of Rs. 37,45,042/- towards interest (sic) disallowed the claim made by the assessee. Challenging the same, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), which appeal came to be dismissed, against which, an appeal was preferred before the Income Tax Appellate Tribunal. Bangalore. 4. The Tribunal after hearing the parties and having considered the case of the assessee held that out of the borrowed loan from the Directors, the property has been acquired and any interest paid thereon would also to be accounted towards the cost of acquisition of the asset. Accordingly, the relief has beer, giver, to the assessee. Challenging the legality and correctness of the same, the present appeal is filed. 5. We have heard the learned Counsel for the Revenue. 6. Accordingly, the relief has beer, giver, to the assessee. Challenging the legality and correctness of the same, the present appeal is filed. 5. We have heard the learned Counsel for the Revenue. 6. The main contention of the learned Counsel for the Revenue is that after selling the property, a resolution is passed by the company to pay the interest to the Directors. In view of such resolution, there was no liability of the Company to pay the interest as on the date of sale. In the circumstances, the Tribunal has .committed a serious error in granting the relief to the Society as the decision to pay the interest is subsequent to the date of sale. 7. We are unable to agree with the arguments advanced by the learned Counsel for the Revenue fir the simple reason on facts that even the Commissioner of Income Tax (Appeals) has held that interest had accrued as on 31.03.2003 and therefore, the Tribunal is justified in granting the relief to the assessee since the property has been purchased out of the loan borrowed from the Directors and any interest paid thereon is to be included while calculating the cost of acquisition of the asset. Therefore, question No. 1 has to be answered against the Revenue. 8. So far as question No. 2 is concerned, the same also does not arise for consideration for the following reasons. 9. According to the Revenue, the interest was not paid till the properly is sold and therefore the assessee is not entitled to claim die amount paid towards interest subsequent to the sale under the head cost of acquisition of the property. This fact has been squarely covered by the judgment of this Court in Commissioner of Income Tax, Karnataka-II Vs. Maithreyi Pai, (1985) 152 ITR 247 KAR . 10. Therefore, we do not find any substantial question of law arises in this appeal. Accordingly, the appeal is dismissed.