Daulat Ram Goel, Ghaziabad V. DCIT, Circle-1, , Ghaziabad

ITA 2768/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6468 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 20-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER I.T.A. NO.2768/DEL/2018 ASSESSMENT YEAR: 2014-15 DAULAT RAM GOEL, C/O AKHILESH KUMAR, ADVOCATE, CHAMBER NO.206-07, ANSAL SATYAM RDC RAJ NASGAR, GHAZIABAD. V. DCIT, CIRCLE-1, GHAZIABAD. TAN/ PAN: ADAPG 4442P (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI AKHILESH KUMAR AND PUSHKAR PANDEY, ADV. RESPONDENT BY: SHRI S.L. ANURAGI, SR.D.R. DATE OF HEARING: 14 11 2018 DATE OF PRONOUNCEMENT: 17 01 2019 O R D E R THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 16.01.2018 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS), GHAZIABAD FOR THE QUANTUM OF ASSESSMENT PASSED U/S.143(3) OF THE IT A CT, FOR THE ASSESSMENT YEAR 2014-15. THE ASSESSEE IS MAINLY AGGRIEVED BY DISALLOWANCE OF INDEXED COST OF CONSTR UCTION OF RS.22,95,740/-. 2. THE FACTS IN BRIEF ARE THAT THE LD. ASSESSING OF FICER NOTED THAT IN THE COMPUTATION OF LONG TERM CAPITAL GAIN S HOWN BY THE ASSESSEE IT HAS CLAIMED INDEXED COST OF CONSTRU CTION OF RS.31,69,852/- COMPRISING OF RS.17,66,573/- FOR FIN ANCIAL YEAR 1985-86 AND RS.5,29,167/- FOR FINANCIAL YEAR 1 990-91. THE LD. ASSESSING OFFICER NOTED THAT THE ASSESSEE H AS FAILED TO I.T.A. NO.2768/DEL/2018 2 FURNISH PROOF OF CONSTRUCTION PERTAINING TO THESE Y EARS. EVEN THOUGH, HE ADMITTED THAT IT CANNOT BE DENIED THAT CONSTRUCTION WAS MADE BUT THE SAID CONSTRUCTION WAS DONE IN THE YEARS AS MENTIONED BY THE ASSESSEE HAS NOT BEEN SUPPORTED BY ANY ADEQUATE PROOF. AS PER ALLOTMENT L ETTER BY GHAZIABAD IMPROVEMENT TRUST, CONSTRUCTION OF THE GR OUND FLOOR WAS TO BE DONE WITHIN THREE YEARS AND REMAINI NG FLOORS SHOULD BE COMPLETED WITHIN FIVE YEARS FROM THE DATE OF SANCTION WHICH WAS 22.03.1977 AND 22.03.1983, RESPE CTIVELY OR WITHIN THE EXTENDED TIME ALLOWED BY THE TRUST. T HE ASSESSEE HAS FAILED TO PROVIDE ANY EVIDENCE FOR EXT ENSION OF TIME. ACCORDINGLY, HE DISALLOWED SUM OF RS.22,95,74 0/-. THE SAID FINDING OF THE ASSESSING OFFICER HAS ALSO BEEN CONFIRMED BY THE LD. CIT(A) ON THE GROUND THAT NO COMPLETION CERTIFICATE OR BILLS OF CONSTRUCTION ACTIVITIES OR BILLS AND VO UCHERS HAVE BEEN SUBMITTED IN SUPPORT OF SUCH CLAIM. 3. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL O F THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL PLAC ED ON RECORD, IT IS SEEN THAT ASSESSEE HAD SOLD A PROPERT Y, BUILDING NO. 29, ADDITIONAL SIHANI GATE, GHAZIABAD FOR SUM O F RS.2,65,00,000/- AND SHARE OF THE ASSESSEE WAS RS.66,25,000/-, VIDE SALE DEED DATED 21.01.2014. TH E ASSESSEE HAS COMPUTED THE LONG TERM CAPITAL GAIN IN THE FOLLOWING MANNER: SALES RS.66,25,000/- LESS: INDEXED COST FOR PURCHASE RS. 84,148/- INDEXED COST FOR CONSTRUCTION AS ON 01.04.1981 RS.31,69,852/- F.Y. 1985-86 RS.17,66,573/- I.T.A. NO.2768/DEL/2018 3 F.Y. 1990-91 RS.5,29,167/- TRANSFER EXPENSES RS.4,63,750/- LONG TERM CAPITAL GAIN RS.6,11,510/- 4. BEFORE US, LEARNED COUNSEL POINTED OUT THAT IN T HE SALE DEED ITSELF, THERE IS A SPECIFIC MENTION THAT FLAT CONSISTED OF BASEMENT, GROUND FLOOR, FIRST FLOOR, SECOND FLOOR A ND THIRD FLOOR. THE ASSESSING OFFICER HAD DISALLOWED MAINLY CONSTRUCTION OF SECOND AND THIRD FLOOR AS HE HIMSEL F HAS STATED THAT CONSTRUCTION OF GROUND FLOOR WHICH INCL UDES BASEMENT SHOULD HAVE BEEN MADE TILL THREE YEARS FRO M THE LEASE DATED 22.03.1977 AND FURTHER CONSTRUCTION SHO ULD HAVE BEEN MADE TILL 22.03.1983. THE CONSTRUCTION OF 2 ND AND 3 RD FLOOR AS PER THE ASSESSEE WAS DONE IN THE FINANCIAL YEAR 1985-86 AND 1990-91, RESPECTIVELY. THOUGH, ASSESSEE SHOULD HAVE TAKEN THE EXTENSION FROM THE GHAZIABAD IMPROVE MENT TRUST FOR THE CONSTRUCTION OF FURTHER FLOORS BUT SA ME SHOULD NOT BE THE GROUND FOR DISBELIEVING THE ASSESSEES C ONTENTION THAT CONSTRUCTION OF 2 ND & 3 RD FLOOR WAS CARRIED OUT, BECAUSE SAME IS QUITE EVIDENT FROM THE SALE DEED. SINCE, MA TTER WAS 25 YEARS OLD; THEREFORE, IT WAS NOT POSSIBLE FOR TH E ASSESSEE TO PROVIDE ANY EVIDENCE. ACCORDINGLY, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEES CLAIM SHOULD NOT BE DISALLOWED. 5. ON THE OTHER HAND, LD. DR HAS STRONGLY RELIED UP ON THE ORDER OF THE AUTHORITIES BELOW SUBMITTED THAT ONUS WAS UPON THE ASSESSEE TO SHOW THAT HE HAS INCURRED COST ON CONSTRUCTION/IMPROVEMENT OF THE PROPERTY. I.T.A. NO.2768/DEL/2018 4 6. FROM THE PERUSAL OF THE SALE DEED, IT CANNOT BE DOUBTED THAT ASSESSEE HAD CONSTRUCTED ALL THE FOUR FLOORS, VIZ., GROUND FLOOR INCLUDING BASEMENT, FIRST FLOOR, SECOND FLOOR AND THIRD FLOOR. EVEN THOUGH ASSESSEE COULD NOT FURNISH THE E VIDENCE FOR CONSTRUCTION CONDUCTED IN THE YEARS 1985-86 AND 199 0-91, BUT THE FACTUM OF CONSTRUCTION CANNOT BE DISPUTED. IN SUCH A SITUATION, THERE IS NO OPTION BUT TO RESORT TO SOME REASONABLE ESTIMATE OF COST OF CONSTRUCTION FOR 2 ND AND 3 RD FLOOR. THE AREA OF 2 ND FLOOR IS 88 SQ. MTR AND THE AREA OF 3 RD FLOOR IS 38 SQ. MTR WHICH IS MENTIONED IN THE SALE DEED. OUT OF 22,95,7 40/-, AS CLAIMED BY THE ASSESSEE, I THINK IT APPROPRIATE THA T COST OF CONSTRUCTION FOR 126 SQ. MTR, I.E., 1356 SQ. FT. SH OULD BE TAKEN AT RS.1200 SQ. FT. WHICH COMES AT RS.16,27,200/-. ACCORDINGLY, I ESTIMATE COST OF CONSTRUCTION SHOULD BE TAKEN AT RS.16,50,000/- AND BALANCE AMOUNT SHOULD BE DISA LLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17TH JANUAR Y, 2019. SD/- [AMIT SHUKLA] JUDICIAL MEMBER DATED: 17 TH JANUARY, 2019 PKK