Sudeep Chandra , Hyderabad V. Income Tax Officer, Ward-14(1), Hyderabad

ITA 1118/Hyd/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5804 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 22-04-2021
• Assessment Year: 2016-2017
• Appeal Filed On: 08-07-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Cost of acquisition
• Section: 54; 143(3); 54F

Judgement Text

ITA NO 1118 OF 2019 SUDEEP CHANDRA HYDERABAD PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.1118/HYD/2019 ASSESSMENT YEAR: 2016-17 SRI SUDEEP CHANDRA HYDERABAD PAN:ADVPS0668J VS. INCOME TAX OFFICER WARD 14(1) HYDRABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI A.V. RAGHURAM REVENUE BY : SRI A. VENKATA RAO, DR DATE OF HEARING: 19/04/2021 DATE OF PRONOUNCEMENT: 28/04/2021 ORDER THIS IS ASSESSEES APPEAL FOR THE A.Y 2016-17 AGAIN ST THE ORDER OF THE CIT (A)-6, HYDERABAD, DATED 27.05. 2019. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IN DIVIDUAL, FILED HIS RETURN OF INCOME FOR THE A.Y 2016-17 ON 2 7.03.2018 ADMITTING INCOME OF RS.7,14,270/-. THE CASE WAS SEL ECTED FOR SCRUTINY UNDER CASS AND DURING THE ASSESSMENT PROCE EDINGS U/S 143(3) OF THE ACT, THE ASSESSING OFFICER OBSERVED T HAT THE ASSESSEE, ALONGWITH HIS MOTHER, SOLD THEIR HOUSE PR OPERTY ADMEASURING 875 SQ. YARDS DURING THE FINANCIAL YEAR 2015-16 AT BANJARA HILLS HYDERABAD, FOR A SALE CONSIDERATION O F RS.2,85,00,000 AND THAT THE ASSESSEE IS A 50% SHARE HOLDER. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CL AIMED DEDUCTION U/S 54F OF THE ACT FOR A SUM OF RS.3,87,8 5,200/- IN RESPECT OF THE HOUSE PURCHASED JOINTLY WITH HIS MOT HER MRS. RADHAY RANI ON 1.6.2016 HAVING ENTERED INTO AN AGRE EMENT FOR ITA NO 1118 OF 2019 SUDEEP CHANDRA HYDERABAD PAGE 2 OF 4 CONSTRUCTION OF HOUSE WITH JAYABHEN PROPERTIES (P) LTD. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CL AIMED RS.55.00 LAKHS TOWARDS FURNITURES AND FIXTURES INCL UDING OTHER FITTINGS SUCH AS AIR CONDITIONER, SOFA SET, DOUBLE BED, DINING TABLE SET AND OTHER INTERIOR FITTING KITCHEN EQUIPM ENT ETC., AND ALSO RS.14,85,000/- AS EXPENDITURE TOWARDS ADDITION AL WORKS IN THE HOUSE. THE ASSESSING OFFICER DISALLOWED THE SAM E HOLDING IT TO BE NOT FOR MAKING THE HOUSE HABITABLE. HE, THEREFOR E, ONLY ALLOWED THE COST OF ACQUISITION AND INDEXED COST OF ACQUISI TION AND COST OF THE IMPROVEMENT TO THE EXTENT OF RS.1,59,00,100 BEI NG THE ASSESSEES SHARE. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) WHO CONFIRMED THE ORDER OF THE A SSESSING OFFICER AND THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRI BUNAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)- 6, HYDERABAD, IS PERVERSE AND UNSUSTAINABLE IN LAW AND ON FACTS. 2. THE CIT(A) ERRED IN SUSTAINING THE DISALLOWANCE OF RS.55,00,000 (APPELLANT'S SHARE OF RS.27,50,000) WH ICH WAS PAID TO THE VENDOR FOR ACQUIRING THE MOVABLES I N THE HOUSE PROPERTY PURCHASED BY THE APPELLANT ALONG WIT H HIS MOTHER. THE AUTHORITIES BELOW OUGHT TO HAVE MENTION ED THAT THE HOUSE PROPERTY WHICH INCLUDED THE INTERIOR FITT INGS WAS PURCHASED AS COMPLETE UNIT AND THEREFORE THE SAID C OST COULD NOT HAVE BEEN DISALLOWED. 3. THE CIT(A) ERRED IN SUSTAINING THE DISALLOWANCE OF RS.14,85,000 MADE BY THE AO. 4. THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT RS.5,00,000 OF THE ABOVE AMOUNT WAS PAID TO BROKER FOR PURCHASE OF NEW RESIDENTIAL HOUSE AND THE BALANCE A MOUNT OF RS.9,85,000 WAS INCURRED TOWARDS REPAIR CHARGES TO MAKE THE RESIDENTIAL HOUSE FIT FOR OCCUPATION. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT TH E TIME OF HEARING, IT IS PRAYED THAT THE HON'BLE TRIBUNAL MAY BE PLEASED TO ALLOW THE APPEAL. ITA NO 1118 OF 2019 SUDEEP CHANDRA HYDERABAD PAGE 3 OF 4 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE AND HIS MOTHER HAD PURCHASED THE HOUSE ALONG WITH FURNITURES AND FIXTURES AND THEREFORE, THE ENTIRE E XPENDITURE INCURRED BY THE ASSESSEE WAS TOWARDS THE COMPOSITE PURCHASE OF THE HOUSE AND FURNITURE AND SHOULD BE ALLOWED IN TO TO. HE ALSO SUBMITTED THAT THERE WERE CERTAIN EXPENDITURE TOWAR DS ELECTRICAL WORK, PLUMBING WORK ETC., WHICH ARE NECESSARY FOR M AKING THE HOUSE HABITABLE AND THEREFORE, AT LEAST SUCH EXPEND ITURE SHOULD HAVE BEEN ALLOWED. 4. THE LEARNED DR, HOWEVER, PLACED RELIANCE UPON T HE ORDERS OF THE AUTHORITIES BELOW. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, I AM OF THE OPINION THAT THE COST OF ACQ UISITION IS THE PRICE PAID BY THE ASSESSEE FOR THE PURCHASE OF THE HOUSE AND ALSO THE EXPENDITURE TOWARDS THE REPAIRS MADE BY HIM TO MAKE THE HOUSE HABITABLE AND NO OTHER EXPENDITURE IS TO BE A LLOWED U/S 54 OF THE ACT. AS REGARDS THE DETAILS OF THE EXPENDITU RE FURNISHED IN PAGE 31 OF THE PAPER BOOK OF THE ASSESSEE WHICH ARE BEING SOUGHT AS EXEMPT BY THE ASSESSEE, I FIND THAT EXCEPT FOR T HE EXPENDITURE INCURRED BY THE ASSESSEE TOWARDS ELECTRICAL, WATER LEAKAGE PROBLEM AND PLUMBING WORK, NO OTHER EXPENDITURE IS REQUIRED TO BE INCURRED FOR MAKING THE HOUSE HABITABLE. ASSESSI NG OFFICER IS DIRECTED TO ALLOW THE SAME AS COST OF IMPROVEMENT A ND ALLOW THE SAME, IF FOUND TO BE IN ORDER. ITA NO 1118 OF 2019 SUDEEP CHANDRA HYDERABAD PAGE 4 OF 4 6. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH APRIL, 2021. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 28 TH APRIL, 2021. VINODAN/SPS COPY TO: S.NO ADDRESSES 1 SRI SUDEEP CHANDRA, PLOT NO.4 69/A FILM NAGAR, ROAD NO.87, JUBILEE HILLS, HYDERABAD 500096 2 INCOME TAX OFFICER WARD 14(1) HYDERABAD 3 CIT (A)-6, HYDERABAD 4 PR. CIT -6, HYDERABAD 5 DR, ITAT HYDERABAD BENCHES 6 GUARD FILE BY ORDER