Sh. Surender Kumar, Saharanpur V. ITO, Saharanpur

ITA 2204/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8528 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 25-06-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 05-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KISHORE B
• Assessee Lawyers: V K TULSIAN
• Keywords: Cost of acquisition
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `G : NEW DELHI) BEFORE HONBLE SR. VICE PRESIDENT SHRI R.P. GARG A ND HONBLE JUDICIAL MEMBER, SHRI RAJPAL YADAV ITA NO.2204/DEL./2008 (ASSESSMENT YEAR : 2005-06) SHRI SURINDER KUMAR, VS. ITO, DEOBAND. LAJPAT NAGAR COLONY, DEOBAND, DISTT. SAHARANPR (U.P.) & C/O SH. DINESH MOHAN, 441, SOUTH CIVIL LINES, MUZAFFARNAGAR-251002. (PAN/GIR NO.AETPK4489A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V.K. TULSIAN, CA REVENUE BY : SHRI KISHORE B., SR.DR ORDER PER R.P. GARG, SR.VP THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE O RDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) FOR ASSESSMENT YEAR 2005-06. THE QUESTION IN THIS APPEAL IS AGAINST THE DEDUCTION U/S 54 OF THE I.T. ACT, AGAIN ST THE LONG TERM CAPITAL GAIN SHOWN BY THE ASSESSEE IN THE SALE OF HOUSE PROPERTY. 2. THE ASSESSEE HAD SOLD A HOUSE FOR A SUM OF RS.8. 05 LACS AND AFTER CLAIMING THE INDEXATION THE COST OF ACQUISITION RESULTED IN A CAPITAL GAIN OF RS.4,76,215. THE ASSESSEE HAD PURCHASED A NEW HOUSE FOR A SUM OF RS.1.35 LAC AND ALSO CLAIMED AN AMOUNT OF RS.3.45 LAKH AS HAS BEEN SPENT ON CONSTRUCTION OF F URNISHING OF THE SAME. HE CLAIMED DEDUCTION U/S 54 ON THIS COMBINE AMOUNT OF THE PURC HASE PRICE AND THE AMOUNTS SPENT ON CONSTRUCTION. THE ASSESSING OFFICER REJECTED THE C LAIM OF THE ASSESSEE BY STATING THAT THE AMOUNT WAS SPENT ACTUALLY ON THE PURCHASE OF GRANIT E STONE AND MARBLE AND LABOUR CHARGES AFFIXING THE GRANITE ON THE FLOOR OF THE NE W HOUSE. ACCORDING TO HIM, IT WAS NOT A CONSTRUCTION OF THE HOUSE, BUT IMPROVEMENT OF THE I NTERIORS OF A HOUSE PROPERTY AND, ITA NO.2204/DEL./2008 (A.Y. : 2005-06) 2 THEREFORE, THE ASSESSEE WAS NOT ENTITLED TO CLAIM D EDUCTION. THE COMMISSIONER OF INCOME-TAX (APPEALS) ALSO REJECTED THE CLAIM OF TH E ASSESSEE FOR THE SIMILAR GROUND. THE ASSESSEE IS IN APPEAL. 3. LD.COUNSEL OF THE ASSESSEE BROUGHT TO OUR NOTICE TWO DECISIONS OF THE TRIBUNAL IN THE CASE OF B.B. SARKAR VS. CIT, REPORTED IN 132 I TR 150 (CAL.) AND THE OTHER IN THE CASE OF PRABHANDAM PRAKASH VS. ITO, 22 SOT 58 (HYD.) AND SUBMITTED THAT IN THE CASE OF B.B. SARKAR, THE ASSESSEE SOLD A HOUSE FOR A SUM OF RS.3 ,15,000. AND PURCHASED ANOTHER HOUSE FOR RS.1,23,001 AND INVESTED A FURTHER SUM OF RS.1, 08,300 FOR THE CONSTRUCTION OF AN ADDITIONAL FLOOR THEREON. IN THAT CASE, THE ASSESS ING OFFICER ALLOWED A RELIEF ONLY IN RESPECT OF RS.1,23,001 BUT NOT IN RESPECT OF RS.1,0 8,300, BUT THE CALCUTTA HIGH COURT HELD THAT IT DOES NOT REALLY MATTER WHETHER THE NEW RESI DENTIAL HOUSE IS PARTLY CONSTRUCTED OR PARTLY PURCHASED AND ALLOWED RELIEF IN RESPECT OF B OTH THE AMOUNTS AND THIS DECISION HAS BEEN FOLLOWED BY THE HYDERABAD BENCH OF THE TRIBUNA L IN THE CASE OF PRABHANDAM PRAKASH. THE FACTS AND CIRCUMSTANCES BEING SIMILAR , IN OUR OPINION, THE PURCHASE COST AS ELL AS THE CONSTRUCTION FOR LAYING GRANITE AND THE LABOUR CHARGES THEREOF BOTH SHOULD BE ALLOWED TO THE ASSESSEE FOR THE PURPOSE OF DEDUCTIO N U/S 54 OF THE ACT. WE ACCORDINGLY DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. 5. ORDER PRONOUNCED IN OPEN COURT ON 10.07.2009. (RAJPAL YADAV) (R.P. GARG) JUDICIAL MEMBER SR. VICE PRESIDENT DATED: JULY 10, 2009. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A, MUZAFFARNAGAR. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT ITA NO.2204/DEL./2008 (A.Y. : 2005-06) 3