Katam Krishna Goud, Hyd, Secunderabad V. ITO, Ward-10(1), Hyd, Hyderabad

ITA 1454/HYD/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6394 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 28-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 31-12-2015
• Court: TRIBUNAL
• Department Lawyers: K E SUNIL BABU
• Keywords: Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1454/HYD/2015 ASSESSMENT YEAR: 2010-11 KATAM KRISHNA GOUD, HYDERABAD [PAN: AIPPG5577M] VS INCOME TAX OFFICER, WARD-10(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI AMRIT KUMAR KOTA, AR FOR REVENUE : SHRI K.E. SUNIL BABU, DR DATE OF HEARING : 28-06-2016 DATE OF PRONOUNCEMENT : 30-06-2016 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-6 HYDERABAD DA TED 15-10-2015. 2. BRIEFLY STATED, ASSESSEE IS A CO-OWNER OF A PROPER TY TO THE EXTENT OF 25%. ASSESSEE ALONG WITH CO OWNERS SOLD TH E PROPERTY ON A PLOT OF 401 SQ. YDS., FOR A CONSIDERATION OF RS. 1, 85,00,000/-. IN THE COMPUTATION OF CAPITAL GAINS, ASSESSEE CLAIMED PURC HASE VALUE OF THE PROPERTY WITH 1,800 SQ. FT., OF EXISTING BUILD ING WHICH WAS ALLOWED BY THE ASSESSING OFFICER (AO). HOWEVER, ON THE DEVELOPMENT COST OF 4,134 SQ. FT., BUILDING CONSTRUCTE D BY ASSESSEE, ASSESSEE CLAIMED THE DEVELOPMENT COST OF RS. 45 LAKHS AND 1/4 TH OF THE SHARE WAS CLAIMED AS DEDUCTION TOWARDS COST OF ACQUISITION. AO WAS OF THE OPINION THAT ASSESSEE HAS CONSTRUCTED ONLY 2,334 SQ. FT (4,134 1,800) AND RESTRICTED THE C OST OF I.T.A. NO. 1454/HYD/2015 KATAM KRISHNA GOUD :- 2 -: CONSTRUCTION TO 928 PER SQ. FT., THEREBY RE-WORKING THE COST OF ACQUISITION. BEFORE THE LD. CIT(A), ASSESSEE CONTEST ED THE ACTION OF THE AO. IT WAS SUBMITTED THAT THE NEW BUILDING WHICH W AS SOLD WAS DEVELOPED AT A COST OF RS. 45 LAKHS AND THERE IS N O DISPUTE ON THAT VALUE, THE EARLIER BUILDING OF 1,800 SQ. FT., WAS DEMOLISHED AND FURNISHED VARIOUS MAPS AND BUILDINGS IN SUPPORT OF THE CONTENTIONS. LD. CIT(A) ON NOTICING THAT THERE ARE CERTA IN DISCREPANCIES IN THE PURCHASE DEED, SALE DEED AND S RO CERTIFICATE, HOWEVER, DID NOT ACCEPT THE ASSESSEES CONTENTIONS AND C ONFIRMED THE DISALLOWANCE SO MADE BY THE AO. 3. ON CONSIDERING THE RIVAL CONTENTIONS AND PERUSING THE ORDER OF THE AO AND CIT(A), I AM OF THE OPINION THAT ACTION OF THE AUTHORITIES CANNOT BE JUSTIFIED. THERE IS NO DISPUTE WITH REFERENCE TO PURCHASE VALUE OF THE PROPERTY WHICH WAS AT RS. 95 LAKHS AND 25% SHARE OF THAT WAS ALLOWED TO ASSESSEE. THE STAMP D UTY PAID ON THAT WAS ALSO ALLOWED. THERE IS ALSO NO DISPUTE WI TH REFERENCE TO DEVELOPMENT COST OF RS. 45 LAKHS, WHICH THE AO HIMS ELF ACKNOWLEDGED. WHETHER THAT IS DEVELOPMENT COST OF 4,13 4 SQ. FT., OR THE COST OF 2,334 BUILDING SHOULD NOT BE A MATERIAL ONE, AS ASSESSEE HAS SOLD THE ENTIRE PROPERTY. THE DEVELOPM ENT COST OF RS. 45 LAKHS SHOULD BE ALLOWED TO ASSESSEE AS A PART OF C OST OF ACQUISITION. WHETHER THE EARLIER BUILDING WAS DEMOLI SHED, THE EVIDENCE OF WHICH ASSESSEE COULD NOT FURNISH OR WHE THER ASSESSEE HAS ADDED ONLY A NEW BUILT UP AREA OF 2,334 SHOULD N OT AFFECT THE COMPUTATION, AS THE ADDITIONAL COST OF RS. 45 LAKHS INC URRED ON THE PROPERTY WAS ACCEPTED BY THE AO. THEREFORE, 1/4 TH SHARE OF THAT VALUE AS CLAIMED BY ASSESSEE SHOULD BE ALLOWED. I AM NOT IN A POSITION TO APPRECIATE THE RESTRICTION OF THE COST OF 1,80 0 SQ. FT., VALUE WHICH WAS PART OF PURCHASE VALUE ITSELF. THAT P ORTION WAS I.T.A. NO. 1454/HYD/2015 KATAM KRISHNA GOUD :- 3 -: NOT CONSTRUCTED BY ASSESSEE. THE ADDITIONAL CONSTRUCTI ON VALUE OF RS. 45 LAKHS IS IN A WAY ALLOWABLE TO ASSESSEE, WHET HER THE OLD BUILDING WAS DEMOLISHED OR NOT. THE ACTION OF THE AO AND THE APPROVAL BY THE CIT(A) CANNOT BE APPRECIATED. THEREF ORE, AO IS DIRECTED TO ALLOW 1/4 TH SHARE OF DEVELOPMENT COST TO ASSESSEE AS CLAIMED. 4. IT IS ALSO NOTICED THAT THERE IS A CALCULATION ERROR COMMITTED BY THE AO IN ADOPTING VALUES, WHICH OF COURSE IS NOT MATERIAL NOW AS ASSESSEES CONTENTION OF 1/4 TH SHARE OF THE DEVELOPMENT COST IS ALLOWED. THE GROUNDS RAISED BY ASSESSEE ARE ACCORDI NGLY CONSIDERED ALLOWED. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE, 2016 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 30 TH JUNE, 2016 TNMM I.T.A. NO. 1454/HYD/2015 KATAM KRISHNA GOUD :- 4 -: COPY TO : 1. KATAM KRISHNA GOUD, 1-10-98/34, DWARAKA DAS COLONY, BEGUMPET, HYDERABAD. 2. INCOME TAX OFFICER, WARD-10(1), HYDERABAD. 3. COMMISSIONER OF INCOME TAX(APPEALS)-6, HYDERABAD 4. THE PR. COMMISSIONER OF INCOME TAX-6, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.