GEETADEVI BADRINARAYAN PANPALIYA,NAGPUR V. DY. COMMISSIONER OF INCOME TAX, CIRCLE-1, NAGPUR

ITA 477/NAG/2024

AI Insights

The case involves Geetadevi Badrinarayan Panpaliya, the appellant, contesting the order of the Deputy Commissioner of Income Tax, Circle-1, Nagpur, regarding the assessment year 2014-15. The primary issues in the appeal were the validity of the notice issued under section 143(2) of the Income Tax Act, 1961, and the disallowance of the deduction of indexed cost of improvement in the computation of long-term capital gains under section 48. The Tribunal's decision addressed these issues, particularly focusing on the allowable indexed costs related to the improvements made to the property, which was deemed necessary for making the old house habitable.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474316 (ITAT-NAGPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANDIPKUMAR SALUNKE
• Assessee Lawyers: RAJESH LOYA
• Keywords: Revised return; Corroborative evidences; Sale consideration of property below Jantri Value; Cost of acquisition
• Section: 143(3); 143(2); 48; 54EC

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI K.M. ROY, ACCOUNTANT, MEMBER ITA no.477/Nag./2024 (Assessment Year : 2014–15) Geetadevi Badrinarayan Panpaliya Plot no.72, Near Lendra Park New Ramdaspeth, Nagpur 440 010 PAN – ACWPP3313R ……………. Appellant v/s Dy. Commissioner of Income Tax Circle–1, Nagpur ……………. Respondent Assessee by : Shri Rajesh Loya Revenue by : Shri Sandipkumar Salunke Date of Hearing – 28/01/2025 Date of Order – 17/02/2025 O R D E R PER K.M. ROY, A.M. This appeal by the assessee is emanating from the impugned order dated 29/07/2024, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2014–15. 2. In its appeal, the assessee has raised following grounds:– “(1) That the notice issued u/s 143(2) is invalid and without jurisdiction, since barred by limitation and consequently the order passed u/s 143(3) of the I.T. Act, 1961 by the learned assessing officer is bad in law and on facts. On the facts and circumstances of the case, the learned CIT(A) erred in law and on facts in holding that the revised return is a valid return and consequently the notice issued u/s 143(2) is just & proper. (2) That the learned CIT(A) erred in law and on facts in confirming the action of the assessing officer in not allowing deduction of indexed cost of 2 Geetadevi Badrinarayan Panpaliya ITA no.477/Nag./2024 improvement of Rs.15,21,584/- (50% share of Rs.30,43,168/-) in computing long-term capital gain u/s 48 on the ground that the assessee has failed to furnish evidence in support of expenditure claimed. On the facts and circumstances of the case, both the lower authorities failed to appreciate that the house purchased was an old house and renovation was made to make it habitable which is supported by evidence. (3) That for any other ground with kind permission of your honour at the time of hearing of appeal.” 3. During the course of hearing, the learned Authorised Representative appearing for the assessee submitted that he did not wish to press ground no.1. The learned Departmental Representative has not raised any objection. Accordingly, ground no.1, raised by the assessee stands dismissed as “not pressed”. 4. Insofar as ground no.2 is concerned, the learned Authorised Representative for the assessee invited our attention to Page–1 of the Paper Book which is placed on record. The computation of long term capital gain is tabulated below:– Property Jointly held by Smt. Geetadevi Panpaliya & Shti Ashok Panpaliya: Capital Gain on sale of Residential Property – Building at Ramdaspeth Sale Price as on 16/01/2014 (1,62,50,000 + 81,25,000) 2,43,75,000 Value adopted or assessed by Stamp Valuation Authority 2,43,75,000 Deemed value of asset being greater of the above two (sec. 50C) 2,43,75,000 Less: Indexed Cost of Acquisition (235200 x 939/100) (Cost as on 01/04/1981 – ` 2,35,000 22,08,528 Indexed Cost of improvement in 1981–82 (1,02,450 x 939 / 100) 9,62,006 3 Geetadevi Badrinarayan Panpaliya ITA no.477/Nag./2024 Indexed Cost of improvement in 1983–84 12,00,463 Indexed Cost of improvement in 1990–91 (1,48,300 x 939/116) Indexed Cost of improvement in 1990–91 (1,70,700 x 939 / 182) 4,21,450 8,80,699 30,43,168 1,91,23,304 Long Term Capital Gain (Rs.19123304 x 50.00% Share of assessee) 95,61,652 Less: Exemption claimed u/s 54EC – ` 50,00,000 invested in Bonds of NHAI / REC. (within a period of 6 months after the date of Transfer / Sale) 50,00,000 u/s 54 – ` 6,75,502 invested in Residential Property (within a period of 1 year before the date of Transfer / Sale) 6,75,502 u/s ___ ` 19,50,000 invested in Capital Gain a/c scheme (within a period of due date of furnishing the return) 19,50,000 Long Term Capital Gain 19,36,150 5. The learned Authorised Representative for the assessee submitted a brief note upon the dispute in hand to buttress his submissions. He further submitted following evidences before us for consideration. Sr. no. Name of Document 1. Computation of Long Term Capital Gain 2. Sale Deed Dated 16/01/2014 for ` 1,62,50,000 (To Dilip & Jagruti Doshi) 3. Sale Deed Dated 16/01/2014 for ` 81,25,000 (To Laxminarayan & Chanchal Sharma) 6. The learned Departmental Representative retorted that the details are bereft of any corroborative evidences and are neither reliable nor authentic. 4 Geetadevi Badrinarayan Panpaliya ITA no.477/Nag./2024 7. We have given a dispassionate hearing to the averments before us. The learned CIT(A) had disallowed the cost of improvement in the absence of any audit trail linking to any Bank a/c or books of account. However, it is manifest that the property was constructed in the year 1954 and requires renovation to make it habitable. Accordingly, it is deemed fit to allow indexed cost of expenditure for the year 1981–82 and 1983–84 only since it was personate to the date of purchase on 31/03/1980. However, it is quite impossible to incur such expenditure in the year 1990–91. So, the assessee gets part relief of ` 10,81,234 and the disallowance gets scaled down to 4,40,350. Thus, ground no.2, raised by the assessee is partly allowed. 8. In the result, assessee’s appeal stands partly allowed. Order pronounced in the open Court on 17/02/2025 Sd/- V. DURGA RAO JUDICIAL MEMBER Sd/- K.M. ROY ACCOUNTANT MEMBER NAGPUR, DATED: 17/02/2025 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Sr. Private Secretary ITAT, Nagpur "