The ITO, Ward-7(1), Ahmedabad V. Smt. Kamlaben Mansukhlal Soni, Ahmedabad

ITA 152/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73159 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 04-03-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 20-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R K DHANESTA
• Assessee Lawyers: U S BHATI

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BENCH, AHMEDABAD .., ! ! ! ! ' #$, BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER !./ I.T.A. NO.152/AHD/2011 ( & '& & '& & '& & '& / / / / ASSESSMENT YEAR : 2007-08) THE ITO WARD-7(1) AHMEDABAD / VS. SMT.KAMLABEN MANSUKHLAL SONI A-401, KEVALYA DHAM-II OPP.HARI OM FLAT TIMES OF INDIA ROAD VEJALPUR, AHMEDABAD ( !./)* !./ PAN/GIR NO. :BLFPS 4529 F ( (+ / // / APPELLANT ) .. ( ,-(+ / RESPONDENT ) (+ . / APPELLANT BY : SHRI R.K. DHANESTA, SR.DR ,-(+ / . / RESPONDENT BY : SHRI U.S. BHATI, A.R. ' 0 / $1 / / / / DATE OF HEARING : 04/03/2014 23' / $1 / DATE OF PRONOUNCEMENT : 31/03/2014 4 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-XIV, AHMEDAB AD (CIT(A) FOR SHORT) DATED 02/11/2010 PERTAINING TO ASSESSME NT YEAR (AY) 2007- 08. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LD.COMMISSIONER OF INCOME TAX (A)-XIV, AHMEDABA D HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 6 LACS TOWARDS INVESTMENT IN FURNITURE. IT(SS)A NO.152/ AHD/2011 ITO VS. SMT.KAMLABEN MANSUKHLAL SONI ASST.YEAR 2007-08 - 2 - 2. THE LD. COMMISSIONER OF INCOME TAX (A)-XIV, AHMEDAB AD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.3,57,020/- ON ACCOUNT OF REPAIRING WORK. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.COMMISSIONER OF INCOME-TAX (A)-XI, AHMEDABAD OUG HT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD.CO MMISSIONER OF INCOME-TAX(A)-XI, AHMEDABAD MAY BE SET ASIDE AND TH AT OF THE ASSESSING OFFICER BE RESTORED. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 28/08/2009, THEREBY THE ASSESSING OFFICER(AO ) MADE ADDITION IN RESPECT OF LONG-TERM CAPITAL GAIN OF RS.9,57,020/- AND MADE DISALLOWANCE OF THE CLAIM OF EXPENSES AMOUNTING TO RS.2,450/-. AGAINST THIS, THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, ALLOWED THE APPEAL. N OW, THE REVENUE IS FURTHER IN APPEAL BEFORE US. 3. GROUND NO.1 IS AGAINST DELETION OF ADDITION OF R S.6 LACS TOWARDS INVESTMENT IN FURNITURE. 3.1. THE LD.SR.DR SHRI R.K.DHANESTA SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE ON ACCO UNT OF PAYMENT MADE TOWARDS FURNITURE. HE SUBMITTED THAT THE PAYMENT T OWARDS FURNITURE CANNOT BE TAKEN AS COST TOWARDS PROPERTY. HE SUBMI TTED THAT EVEN OTHERWISE ALSO, THE ASSESSEE HAS NOT TAKEN ITS COST IN THE SALE CONSIDERATION. IT(SS)A NO.152/ AHD/2011 ITO VS. SMT.KAMLABEN MANSUKHLAL SONI ASST.YEAR 2007-08 - 3 - 3.2. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE S HRI U.S.BHATI SUPPORTED THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT THE FURNITURE WERE PART AND PARCEL OF THE FLAT AND THE COST TOWAR DS FURNITURE WAS TO MAKE THE HOUSE HABITABLE. HE PLACED RELIANCE ON T HE DECISION OF THE COORDINATE BENCH (ITAT MUMBAI C BENCH) RENDERED IN THE CASE OF MRS. GULSHANBANOO R.MUKHI VS. JCIT IN ITA NO.3369/MUM/2 000 FOR AY 1996-97 AND DECISION OF THE COORDINATE BENCH (ITAT AHMEDABAD BENCH B) RENDERED IN THE CASE OF SRINIVAS R.DESAI VS. ACI T IN ITA NOS.1245 & 2432/AHD/2010 FOR AY 2007-08 IN SUPPORT OF THIS C ONTENTION THAT THE PAYMENT TOWARDS FURNITURE WAS MADE FOR MAKING THE F LAT HABITABLE AND, THEREFORE IS ENTITLED TO CLAIM U/S.54 OF THE ACT. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AO HAS RECORDED IN HIS ORDER THAT AS PER THE AFFIDAVIT SUBMITTED BEFORE HIM AN AMOUNT OF RS.6 LACS WAS INC URRED ON THE FURNITURE ITEM, SUCH AS SOFA-2 NOS., DINNING TABLES WITH 6 CHAIRS 1 NO., T.V. CABINET AND SOFA-1 NO. AND CENTRAL TABLE-2 NOS ., CABINET CUPBOARD, DOUBLE BED COTS WITH DRESSING TABLE -2 NO S. ETC. 4.1. THE DECISIONS RELIED UPON BY THE LD.COUNSEL FO R THE ASSESSEE MORE PARTICULARLY RENDERED IN THE CASE OF MRS.GULSHANBAN OO R.MUKHI VS. JT.CIT REPORTED AT (2002) 83 ITD 649 (MUMBAI), WOUL D NOT HELP SINCE THE FACTS WERE DIFFERENT AS IN THAT CASE THE ASSESS EE HAD MADE RENOVATION OF THE HOUSE TO MAKE IT HABITABLE, SINCE THE HOUSE SO PURCHASED WAS NOT IN A HABITABLE CONDITION. HOWEVER, IN THIS CASE, T HE ASSESSEE HAS IT(SS)A NO.152/ AHD/2011 ITO VS. SMT.KAMLABEN MANSUKHLAL SONI ASST.YEAR 2007-08 - 4 - PURCHASED FURNITURE WHICH WERE NOT EMBEDDED INTO TH E FLAT, THEREFORE IN OUR CONSIDERED VIEW THE PAYMENT MADE TOWARDS PURCHA SE OF DINNING TABLES, SOFA AND CENTRAL TABLE WOULD NOT QUALIFY FO R THE DEDUCTION U/S.54 OF THE ACT. THE PAYMENTS MADE TOWARDS CABINET CUP BOARD, DOUBLE BED COT, ETC. WHICH WERE EMBEDDED INTO BUILDING AND T HE COST OF SUCH FURNITURE SHOULD HAVE BEEN ALLOWED AS THE COST OF T HE FLAT. THEREFORE, THIS ISSUE IS RESTORED BACK TO THE FILE OF AO TO RECOMPU TE THE DISALLOWANCE. THUS, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOS ES. 5. GROUND NO.2 IS AGAINST DELETION OF ADDITION OF R S.3,57,020/- ON ACCOUNT OF REPAIRING WORKS. THE D.SR.DR SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. ON THE CON TRARY, LD.COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A) AND S UBMITTED THAT THE EXPENDITURE WAS INCURRED FOR MAKING THE HOUSE HABIT ABLE. IN SUPPORT OF THIS CONTENTION, HE RELIED ON THE DECISION OF THE C OORDINATE BENCH IN THE CASE OF MRS. GULSHANBANOO R.MUKHI VS. JCIT IN ITA NO.3369/MUM/2000 FOR AY 1996-97 AND OF SRINIVAS R.D ESAI VS. ACIT IN ITA NOS.1245 & 2432/AHD/2010 FOR AY 2007-08. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE AO HAS DISALLOWED THE CLAIM OF THE ASSESSEE IN RESPECT OF THE EXPENDITURE INCURRED ON REPAIRING WORK ON THE BASIS THAT THE COST OF REPAIRING SEEMS TO BE DOUBTFUL BECAUSE VARIOUS VOUC HERS AS SUBMITTED IN EVIDENCES OF REPAIRING WORK PREPARING SELF-MADE IN DIFFERENT NAMES AND PAYMENTS AGAINST THEM WAS MADE IN CASH. FROM THE OBSERVATION OF THE IT(SS)A NO.152/ AHD/2011 ITO VS. SMT.KAMLABEN MANSUKHLAL SONI ASST.YEAR 2007-08 - 5 - AO, IT APPEARS THAT THE OBJECTION OF AO WAS THAT FI RSTLY THE VOUCHES SO PRODUCED WERE SELF-MADE AND SECONDLY THE PAYMENT WA S MADE IN CASH. THIS DISALLOWANCE IS MADE ON THE BASIS OF THE SUSPI CION. THE AO HAS NOT MADE ANY ENQUIRY FROM THE PERSONS WHO WERE PAID BY THE ASSESSEE FOR CARRYING OUT THE REPAIRING WORK. IN THE ABSENCE OF SUCH ENQUIRY, THE DISALLOWANCE MERELY ON THE BASIS OF SUSPICION CANN OT BE UPHELD. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE LD.CIT(A) AS IN THE NORMAL COURSE WHEN AN OLD HOUSE IS PURCHASED , CERTAIN REPAIR WORKS ARE TO BE CARRIED OUT FOR MAKING IT HABITABLE . MOREOVER, THE AO HAS NOT GIVEN A CLEAR-CUT FINDING THAT SUCH EXPENDI TURE WAS BOGUS OR SHAM. IN VIEW OF THIS, THIS GROUND OF THE REVENUE IS REJECTED. 7. GROUND NOS.3 & 4 ARE GENERAL IN NATURE REQUIRE N O INDEPENDENT ADJUDICATION. 8. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOWE D BUT FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) (' #$) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 31/ 03 /2014 71.., .../ T.C. NAIR, SR. PS IT(SS)A NO.152/ AHD/2011 ITO VS. SMT.KAMLABEN MANSUKHLAL SONI ASST.YEAR 2007-08 - 6 - 4 / ,$8 98'$ 4 / ,$8 98'$ 4 / ,$8 98'$ 4 / ,$8 98'$/ COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. !! $ ': / CONCERNED CIT 4. ':() / THE CIT(A)-XIV, AHMEDABAD 5. 8 #; ,$ , , / DR, ITAT, AHMEDABAD 6. ;<& =0 / GUARD FILE. 4' 4' 4' 4' / BY ORDER, -8$ ,$ //TRUE COPY// > >> >/ // / !) !) !) !) ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 13.3.14 (DICTATION-PAD 12-P AGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 14.3.14/18.3.14 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.31.3.14 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31.3.14 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER