ACIT, New Delhi V. M/s. Panipat Properties Pvt. Ltd., New Delhi

ITA 4404/DEL/2010

• Counselvise Citation: 440420114 RSA 2010
• Duration Of Justice: 3 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 23-10-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 01-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: ANJU GOEL
• Keywords: Capital asset; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH F FF F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.4404/DEL/2010 4404/DEL/2010 4404/DEL/2010 4404/DEL/2010 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2006 2006 2006 2006- -- -07 0707 07 ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -14(1), ROOM NO.41 14(1), ROOM NO.41 14(1), ROOM NO.41 14(1), ROOM NO.415, 5,5, 5, C.R.BUILDING, I.P. ESTATE, C.R.BUILDING, I.P. ESTATE, C.R.BUILDING, I.P. ESTATE, C.R.BUILDING, I.P. ESTATE, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S PANIPAT PROPERTIES PVT.LTD., M/S PANIPAT PROPERTIES PVT.LTD., M/S PANIPAT PROPERTIES PVT.LTD., M/S PANIPAT PROPERTIES PVT.LTD., 15 1515 15 TH THTH TH FLOOR, MOHANDEV BUILDING, FLOOR, MOHANDEV BUILDING, FLOOR, MOHANDEV BUILDING, FLOOR, MOHANDEV BUILDING, 13 1313 13- -- -TOLSTOY MARG, TOLSTOY MARG, TOLSTOY MARG, TOLSTOY MARG, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN : PAN : PAN : PAN : AAACP1154B. AAACP1154B. AAACP1154B. AAACP1154B. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. Y.KAKKAR, SR.DR. RESPONDENT BY : MS. ANJU GOEL, CA. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER OF LEARNED CIT(A)-XVII, NEW DELHI DATED 26 TH JULY, 2010 FOR THE AY 2006-07. 2. THE ONLY GROUND RAISED BY THE REVENUE READS AS UNDE R:- THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.17,68,396/- MADE BY THE ASSESSING OFFICER TO THE ASSESSEES INCOME OF CAPITAL GAIN DUE TO ASSESSEES FAILURE TO PROVE GENUINENESS OF EXPENSES TO THIS EXTENT CLAIMED AS COST OF IMPROVEMENT OF THE CAPITAL ASSET. 3. THE FACTS OF THE CASE ARE THAT DURING THE ACCOUNTI NG YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN INCOME OF ` 2,24,13,804/- FROM LONG TERM CAPITAL GAINS. THE WORKING OF THE SAME WAS AS UNDER:- ITA-4404/DEL/2010 2 PARTICULARS F.Y. OF PURCHASE/ ADDITION AMOUNT COST INFLATION INDEX ACQUISITION COST PURCHASE SALE PURCHASE COST OF PROPERTY 1992-93 61,00,000 223 497 1 ,35,95,067 PAID TO LAND & DEVELOPMENT OFFICE 1992-93 3,65,458 223 497 8,14,496 ADDITION TO BUILDING 1992-93 38,737 223 497 86,333 ADDITION TO BUILDING 1993-94 8,02,475 244 497 16,34 ,550 ADDITION TO BUILDING 1994-95 3,55,594 259 497 6,82, 356 PAID TO LAND & DEVELOPMENT OFFICE 1995-96 22,987 281 497 40,657 STAMP DUTY FOR PROPERTY REGISTRATION 1997-98 4,88,000 331 497 7,32,737 TOTAL 81,73,251 1,75,86,196 LESS - SALE VALUE OF PROP ERTY 4,00,00,000 PROFIT ON SALE OF PROPERTY (LONG TERM CAPITAL GAIN) 2,24,13,804 4. THE ASSESSING OFFICER ACCEPTED THE COST OF ACQUISITIO N. HOWEVER, WITH REGARD TO COST OF IMPROVEMENT, HE PARTLY ACCEPT ED THE SAME AND ACCORDINGLY RE-WORKED OUT THE LONG TERM CAPITAL GAI N OF ` 2,49,50,096/- AS UNDER:- TOTAL SALE CONSIDERATION RS.4,00,00,000/- LESS I. INDEXED COST OF ACQUISITION RS.1,35,95,067 /- II. INDEXED COST OF IMPROVEMENT RS.14,54,537/- RS.1 ,50,49,904/- LONG TERM CAPITAL GAIN RS.2,49,50,096 /- 5. ON APPEAL BEFORE THE LEARNED CIT(A), HE DELETED THE ADDITION TO THE CAPITAL GAINS WITH THE FOLLOWING FINDING:- 2.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF LD.A R AND PERUSED THE ASSESSMENT ORDER PASSED BY THE AO. IT I S SENT THAT THE APPELLANT HAS DISCLOSED THE VALUE OF THE PROPERTY AS CLAIMED IN THE BALANCE SHEET OF RESPECTIVE ITA-4404/DEL/2010 3 ASSESSMENT YEARS. I FIND FORCE IN THE SUBMISSIONS OF THE LD.AR THAT THE APPELLANT HAS BEEN CLAIMING THE VALUE OF THE PROPERTY IN THE BALANCE-SHEETS OF RESPECTIVE ASSESSMENT YEARS, WHICH ARE AVAILABLE ON THE RECORD. THEREFORE , CALLING FOR THE PROOF IN RESPECT OF VERY OLD EXPENSES WHICH TH E APPELLANT WAS NOT SUPPOSED TO MAINTAIN AND MAKING DISALLOWANCE ON THAT BASIS WAS NOT JUSTIFIED. IN VIEW O F THE ABOVE THE ADDITION OF RS.17,68,396/- MADE BY THE AO CANNOT BE SUSTAINED. HENCE, THE SAME IS DELETED. GROU ND OF APPEAL IS ALLOWED. 6. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDES AN D THE FACTS OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORD ER OF LEARNED CIT(A). THE ASSESSMENT YEAR UNDER CONSIDERATION IS 2005-06 AND TH E COST OF IMPROVEMENT IN THE BUILDING WAS DURING THE FY 1992-9 3 TO 1997-98, I.E., EARLIER YEARS. THE SAME WAS DULY DEBITED TO THE ASSESSEES BOOKS OF ACCOUNT AND THE ACCOUNTS OF ALL THE EARLIER YEARS WERE AUDITED. THAT ASSESSMENT OF ALL THE EARLIER YEARS HAS BEEN COMPLETED IN WHICH THE ADDITION TO THE BUILDING AS SHOWN BY THE ASSESSEE IS DULY ACCEPTED. NOW, AFTER A CONSIDERABLE TIME GAP, IN THE YEAR UNDE R CONSIDERATION, THE ASSESSING OFFICER CANNOT DISPUTE THE CORRECTNESS OF TH E COST OF IMPROVEMENT DEBITED IN THE ASSESSEES BOOKS OF ACCOUNT I N THE EARLIER YEARS AND WHICH IS ACCEPTED BY THE REVENUE IN THOSE YE ARS. IN VIEW OF THE ABOVE, WE UPHOLD THE ORDER OF LEARNED CIT(A) IN THIS REGARD AND DISMISS THE APPEAL FILED BY THE REVENUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED . DECISION PRONOUNCED IN THE OPEN COURT ON 25 TH OCTOBER, 2013. SD/- SD/- ( (( (A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 25.10.2013 VK. ITA-4404/DEL/2010 4 COPY FORWARDED TO: - 1. APPELLANT : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -14(1), ROOM 14(1), ROOM 14(1), ROOM 14(1), ROOM NO.415, NO.415, NO.415, NO.415, C.R.BUILDING, I.P. ESTATE, NEW DELHI. C.R.BUILDING, I.P. ESTATE, NEW DELHI. C.R.BUILDING, I.P. ESTATE, NEW DELHI. C.R.BUILDING, I.P. ESTATE, NEW DELHI. 2. RESPONDENT : M/S PANIPAT PROPERTIES PVT.LTD., M/S PANIPAT PROPERTIES PVT.LTD., M/S PANIPAT PROPERTIES PVT.LTD., M/S PANIPAT PROPERTIES PVT.LTD., 15 1515 15 TH THTH TH FLOOR, MOHANDEV BUILDING, FLOOR, MOHANDEV BUILDING, FLOOR, MOHANDEV BUILDING, FLOOR, MOHANDEV BUILDING, 13 1313 13- -- -TOLSTOY MARG, NEW DELHI. TOLSTOY MARG, NEW DELHI. TOLSTOY MARG, NEW DELHI. TOLSTOY MARG, NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR