Sandhya Suresh Dahivelkar, Pune V. ITO, Ward 14(3), Pune, Pune

ITA 341/PUN/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5851 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 26-06-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 19-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DATTATRAYA SURESH KUSUMKAR
• Keywords: Capital asset; Additional evidence; Cost of acquisition; Reasonable cause; Valuation report; Condonation of delay; Capital Gains
• Section: 54; 143(3); 55A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.341/PUN/2024 िनधाᭅरण वषᭅ / Assessment Year: 2017-18 Sandhya Suresh Dahivelkar, Flat No.6/624, Clover Citadel Wanowrie, Pune- 411040. PAN : ASYPD2124N Vs. ITO, Ward-14(3), Pune. Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 28.02.2023 passed by LD CIT(A)/NFAC for the assessment year 2017-18. 2. The present appeal is filed belatedly i.e. with the delay of 297 days. The appellant furnished an application/ affidavit praying for condonation of delay in the circumstances mentioned therein. We are of the considered opinion that the reasons mentioned by the assessee constitute reasonable cause for not filing the appeal within Assessee by : Shri Dattatraya Suresh Kusumkar Revenue by : Shri Sourabh Nayak Date of hearing : 27.06.2024 Date of pronouncement : 10.07.2024 ITA No.341/PUN/2024 2 prescribed time. In the circumstances, the delay is hereby condoned and the appeal is admitted for adjudication. 3. The appellant has raised the following grounds of appeal :- “1. The Sale consideration which is accepted by both Assessee and CIT (Appeal) includes consideration in respect of transfer of Land along with Building constructed on the same land (subjected capital asset) by assesse. The subjected building was constructed by assesses husband through local construction worker. CIT (Appeal) in their computation considered cost of land with indexation, but rejected cost of construction of building on the ground of non-availability of evidence of expenses incurred towards construction. I prey to consider the cost of construction of building incurred as per valuation report by assesse or valuation of capital asset by exercising the power under section 55A or section 142A of Income Tax Act. 2. Apart from Cost of construction of building, there are some cost of improvement towards capital Asset. On the same ground of point No.1, I prey to consider the cost of Improvement incurred as per valuation report by assesse or valuation of capital asset by exercising the power under section 55A or section 142A of Income Tax Act.” 4. The facts, in brief, are that the assessee is an individual and senior citizen widow lady, filed her Return of Income on 27-06-2017 declaring total income at Rs.15,24,570. In this Return of Income, appellant has shown capital gain on account of sale of Residential House situated at Nigdi, Pune as NIL after claiming deduction u/s 54 of the IT Act. During the course of assessment proceedings, the assessee submitted a revised calculation of said ITA No.341/PUN/2024 3 capital gain wherein she has made the changes in the claim of cost of acquisition, as residential house was inherited from late husband who has constructed the Bungalow. And at the time of filing the return, construction cost was not available with the appellant and therefore, appellant has obtained valuation report and revised the cost of acquisition. The A.O. disregarded appellants contention and did not allow such revised cost of acquisition and recomputed the capital gain at Rs.43,57,789/-. The assessment was completed u/s 143(3) of the IT Act by determining the income at Rs.58,82,355/-. 5. In first appeal, being unsatisfied with the contentions of the assessee, & also in the absence of accurate evidence Ld. CIT(A)/NFAC dismissed the appeal of the assessee. 6. Being aggrieved with the decision of Ld. CIT(A)/NFAC, the assessee is in appeal before this Tribunal. 7. LD AR submitted before us that the assessee is a senior citizen & widow of late LT Colonel Suresh Dahiwelkar. Her son is also employed in Indian Army. She sold her residential property which was constructed by her late husband Suresh Dahiwelkar who was ex-military men. The Assessing Officer accepted all the ITA No.341/PUN/2024 4 claims but denied the cost of construction of Rs.5,13,670 & also the cost of improvement of Rs.4,82,500/-, which resulted in Long Term Capital Gains of Rs.43,57,789/-. It was submitted before us that the AO & LD CIT(A)/NFAC has only allowed the indexed cost of acquisition of the plot Rs.34,78,211/-, the cost of the new house Rs.1,39,00,000/-, stamp duty & registration charges Rs.8,64,000/- & brokerage Rs.5,00,000/- but in the absence of evidence regarding construction cost & also regarding improvement cost no benefit/ deduction was allowed. It was submitted that the plot was purchased on 99 years lease in the year 1982-83 for Rs.3,37,000/- on instalments from Pimpri Chinchwad New Town Development Authority, Nigdi & the house was also constructed by late husband of the assessee during financial year 1990-91 & an amount of Rs.5,13,670/- was invested in construction of the house. Thereafter the house was renovated in the year 2003-04 & an amount of Rs.4,82,500/- was invested in renovation. However before the AO, inadvertently the construction cost was mentioned at Rs.27,55,000/- which is not correct & thereafter before LD CIT(A)/NFAC the correct construction cost Rs.5,13,670/- was disclosed. The counsel of the ITA No.341/PUN/2024 5 assessee further produced a certificate dated 07-11-1998, issued by HDFC regarding house loan availment of Rs.80,000/- by the late husband of the assessee. The counsel demonstrated with the help of above house loan certificate that an amount of Rs.6,292/- towards principal was paid in one year & the total principal outstanding as on 31-03-1999 was Rs.39,945/-. On the basis of this certificate it was submitted that the house loan was obtained in the year 1990-91. On the basis of another certificate dated 07-06-2024, issued by Principal Controller of Defence Accounts (Officers) Golibar Maidan, PUNE, it was further demonstrated that during 1990-91 the amount of Rs.1,08,051/- was also withdrawn by her late husband from DSOP Fund & Retirement benefits (26435 + 46,949+ 34661) & the same was invested in the house construction. Apart from these amounts regular income was also invested on construction of the residential house. Regarding renovation expenses it was submitted that from Maharashtra Bank SB Account No.8147 substantial amount was withdrawn for improvement expenses. Copy of the relevant bank account was produced during the course of hearing before us. It was also submitted that two more accounts respectively in SBI & PNB were ITA No.341/PUN/2024 6 also utilised for withdrawal of amounts for improvement of the property but as the period is quite old, therefore the banks are unable to provide copy of those bank statements, certificates with regard to this fact also produced before us. But unfortunately all these documents could not be produced either before the AO or before the LD CIT(A)/NFAC, therefore it was prayed before the bench to accept them as an additional evidences & allow the relief on the basis of these documents. On the basis of all these documents it was prayed before us that the determination of Long Term Capital Gains of Rs.43,57,789/- may kindly be deleted. 8. In the light of the fact that the assessee is a senior citizen & widow of military personnel, LD DR raised no serious objection to the request of the counsel of the assessee. 9. We have heard LD counsels from both the sides & perused the material available on record & furnished before us during the course of hearing. We find that the assesse is a senior citizen & widow of military personnel. The only solitary question raised before us is regarding determination of long term capital gain by the AO in absence of proper evidence in respect of cost of construction of residential house & cost of improvement of ITA No.341/PUN/2024 7 residential house done by the late husband of the assessee. During the course of hearing, it was submitted by the counsel of the assessee that the residential house was constructed by the late husband of the assessee in the year 1990-91 & the improvement in the house was also done by him in the year 2003-04 & due to the untimely death of her husband the assessee is not aware with the cost of construction or relevant documents. On being directed by the Bench to furnish any evidence to support her case, the assessee tried her level best to collect the relevant documents & furnished before us the copy of relevant HDFC housing loan certificate, the copy of certificate issued by Principal Controller of Defence Accounts regarding withdrawal of DSOP Funds & Retirement Benefits, the copy of relevant bank accounts from where sums were withdrawn for the purposes of expenses regarding improvement of the property. Although these documents were neither produced before the AO nor produced before LD CIT(A)/NFAC, however, the same were produced before us as per our direction. Looking to the position of the assessee that she is a senior citizen and widow of army personnel and considering the ITA No.341/PUN/2024 8 fact that her son is also posted in Indian Army, therefore as a special case, we admit these evidences for consideration. 9.1. In the light of all these evidences we are of the considered opinion that the cost of construction was met with a house loan obtained from HDFC & withdrawal from DSOP Fund & Retirement Benefits. It is also found that 2 separate valuation reports were furnished before the Assessing Officer prepared by Government approved valuer. But the same were not accepted by the AO. We also find that according to the government approved valuer Rs.5,13,670/- were invested by the late husband of the assessee towards construction of the house during the year 1990-91. The certificate of loan issued by HDFC as well as certificate issued by the Principal Controller of Defence Accounts also supports the same. It is also an admitted fact that the house was sold, therefore it must have been constructed but still the AO as well as LD CIT(A)/NFAC has not allowed any reasonable amount towards cost of construction. It is also apparent from the perusal of the bank accounts that substantial amount i.e. more than Rs.4,82,500/- was withdrawn during F.Y. 2003-04 from the Maharashtra Bank Savings Account No.8147 of the late husband ITA No.341/PUN/2024 9 of the assessee for the purposes of renovation of the property. We find that withdrawal entries were there in the name of sutar, ply decor & construction company etc. Considering the totality of the facts of the case & in the interest of justice, being a special case of senior citizen lady being widow of Army personnel, we deem it appropriate to accept the contention of the assesse to certain extent. Therefore the cost of construction is estimated at Rs.5,00,000/- in the F.Y. 1990-91 (which was claimed by the assessee at Rs.5,13,670/-) & the cost of improvement is estimated at Rs.4,70,000/- in the F.Y. 2003-04, (which was claimed by the assessee at Rs.4,82,500/-). The Assessing Officer is therefore directed to calculate the indexed cost of construction in the year of sale, as well as the indexed cost of improvement in the year of sale, taking the cost of construction at Rs.5,00,000/- for F.Y. 1990-91 & cost of renovation/ improvement at Rs.4,70,000/- for F.Y. 2003-04. Accordingly in the light of above observations, the Assessing Officer is directed to allow the above two additional deductions while calculating the Long Term Capital Gains. We must make it clear here that the above two deductions will be in addition to deductions already allowed by the AO in respect of indexed cost of ITA No.341/PUN/2024 10 acquisition of plot Rs.34,78,211/-, Cost of new house Rs.1,39,00,000/-, Stamp Duty & registration charges Rs.8,64,000/- & brokerage charges Rs.5,00,000/-. Thus, the grounds raised by the assessee are partly allowed. 10. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open Court on 10 th July, 2024. Sd/- Sd/- (R. K. PANDA) (VINAY BHAMORE) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 10 th July, 2024. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “B” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.