ACHYUT RAMCHANDRA SAMANT, MUMBAI V. ASST CIT RG 19(3), MUMBAI

ITA 7715/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70688 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 05-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 15-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R M MADHAVI
• Keywords: Cost of acquisition; Capital expenditure
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI , BEFORE SHRI D. MANMOHAN, VP AND SHRI SANJAY ARORA, AM I.T.A. NO. 7715/MUM/2011 ( / ASSESSMENT YEAR: 2006-07) ACHYUT RAMCHANDRA SAMANT 501, WILFRED APARTMENTS, ST. LEO ROAD, BANDRA (W), MUMBAI-400 050 VS. ASST. CIT-19(3), MUMBAI ! ' ./PAN/GIR NO. ACAPS 1460 J ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) !#& / APPELLANT BY : SHRI GANESH RAJGOPALAN $%!#'& / RESPONDENT BY : MS. R. M. MADHAVI ( )*'+, / DATE OF HEARING : 05.08.2013 -./'+, / DATE OF PRONOUNCEMENT : 23.08.2013 0 O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-30, MUMBAI (CIT(A) FOR SH ORT) DATED 02.08.2011, DISMISSING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S .143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A. Y.) 2006-07 VIDE ORDER DATED 15.12.2008. 2 ITA NO.7715/MUM/2011 (A.Y. 2006-07) ACHYUT RAMCHANDRA SAMANT VS. ASST. CIT 2. THE ISSUE ARISING IN THE INSTANT APPEAL, PROJECT ED BY THE ASSESSEE PER GROUND NUMBERS 1 TO 4 OF ITS APPEAL, IS THE DEDUCTIBILITY IN LAW U/S.54 OF THE VARIOUS EXPENSES INCURRED BY HIM, CLAIMED TO BE IN RESPECT OF THE PU RCHASE AND SALE OF THE RESIDENTIAL PROPERTY; THE ASSESSEE PURCHASING A RESIDENTIAL FLA T (THE NEW FLAT/ASSET) AND SELLING ANOTHER RESIDENTIAL PROPERTY (THE TRANSFERRED ASSE T HEREINAFTER) DURING THE RELEVANT PREVIOUS YEAR, BY INVESTING THE SALE PROCEEDS OF TH E LATTER, SO THAT HE WAS ENTITLED TO THE BENEFIT OF SECTION 54 OF THE ACT. THE MATTER BEING PRINCIPALLY FACTUAL, WE SHALL TAKE UP EACH OF THE DEDUCTIONS IN DISPUTE IN SERIATIM. 3. THE FIRST DEDUCTION UNDER REFERENCE IS FOR RS.1, 65,000/- PAID BY WAY OF LEGAL FEES OSTENSIBLY TOWARD PURCHASE OF THE NEW ASSET. THE AS SESSEE STOOD DENIED DEDUCTION IN ITS RESPECT BY THE ASSESSING OFFICER (A.O.) IN THE ABSE NCE OF PROPER DETAILS AS TO THE PURPOSE FOR WHICH THE SAME STOOD INCURRED. EVEN AS STATED B Y THE LD. CIT(A), ALL THAT THE RECEIPT THEREFOR STATES IS: AGREEMENT TO BE ENTERED INTO F OR PURCHASE OF FLAT IN WILFRED APARTMENTS. BEFORE US THE LD. AR WOULD STATE THAT A PERSON PURC HASING A PROPERTY WORTH RS.170 LACS WOULD NOT MIND SPENDING A FRACTION OF SUM TOWA RD SATISFYING HIMSELF QUA THE LEGAL TITLE OF THE PROPERTY BEING PURCHASED, AND THAT, TH EREFORE, THE SAID SUM COULD NOT BE CONSIDERED AS EXCESSIVE. WE AGREE. BUT THE PURPOSE FOR WHICH THE FEES STANDS PAID CANNOT BE A MATTER OF PRESUMPTION, AND HAS TO BE ESTABLISH ED AS A FACT FIRST. THE RECEIPT (PB PG.33) MENTIONS THE BILL NO. (AS 0175/2005) AND MATTER AS 686/1/05, SO THAT THE WORK IS WELL DOCUMENTED. WHAT, THEREFORE, PREVENTS THE ASSESSEE FROM CLARIFY ING THE MATTER ON THE WORK UNDERTAKEN, WE FAIL TO UNDERSTAND ? ON BEING QUERIED BY THE BENCH THAT THE LAWYERS, IN CASE OF VERIFICATION OF TITLE (AS SOUGHT TO BE P ROJECTED DURING HEARING), FURNISH A SEARCH/TITLE REPORT, THE LD. AR WOULD SUBMIT THAT T HIS (THE RECEIPT AFORESAID) IS ALL THAT THE ASSESSEE CAN FURNISH. IN FACT, THE SELLER-BUILDER W OULD KEEP AT HAND ALL THE APPROVALS, CLEARANCES, TITLE DEEDS, NOC, ETC., SO AS TO ALLAY ANY APPREHENSION OF THE BUYERS QUA THEIR LEGAL ANTECEDENTS AND COMPETENCE TOWARD EXECUTION O F THE SALE AGREEMENT, AS INDEED WE FIND IT TO BE IN THE INSTANT CASE AS WELL (ANNEXURE A TO THE AGREEMENT FOR SALE). FURTHER, 3 ITA NO.7715/MUM/2011 (A.Y. 2006-07) ACHYUT RAMCHANDRA SAMANT VS. ASST. CIT THE AGREEMENT SPECIFICALLY PROVIDES FOR THE PREPARA TION OF THE AGREEMENT AND CONVEYANCE. NO DOUBT WE OBSERVE THAT THE SUBJECT MATTER OF THE RECEIPT CONFIRMS OF IT AS TOWARD AGREEMENT TO BE ENTERED INTO IN RESPECT OF THE NEW ASSET. HOWEVER, EVEN AS CONFIRMED BY THE LD. AR DURING HEARING, AND EVEN OTHERWISE APPAR ENT FROM THE RECORD, THE AGREEMENTS ARE ENTERED IN PREDETERMINED STANDARDIZED FORMATS A S CRYSTALLIZED BY THE BUILDER-SELLERS, AS BUILDERS WOULD NOT ALLOW THE BUYERS TO DISTURB T HEIR SPECIMEN AGREEMENTS. IN ANY VIEW OF THE MATTER, IN THE ABSENCE OF ANY EVIDENCE WITH REGARD TO THE ACTUAL WORK UNDERTAKEN, WE ARE UNABLE TO CONSIDER THIS AMOUNT AS FORMING PA RT OF THE COST OF PURCHASE OF THE NEW ASSET AND, THEREFORE, AS BEING ENTITLED FOR DEDUCTI ON U/S.54. THE ASSESSEE FAILS ON ITS GROUND NO.1. 4. THE SECOND GROUND IS IN RESPECT OF DISALLOWANCE OF EXPENDITURE FOR RS.15,14,415/-, I.E., ON THE HOUSE PROPERTY ACQUIRED. WHILE THE ASS ESSEE CLAIMS IT TOWARD CIVIL WORK, THE REVENUE CLAIMS IT TO BE FOR INTERIOR DESIGNING AND RENOVATION, SO THAT THE SAME COULD NOT BE CONSIDERED AS QUA PURCHASE OF THE NEW ASSET, WHICH ONLY IS EXIGIBLE FOR DEDUCTION U/S.54, I.E., APART FROM COST OF CONSTRUCTION, WHIC H IS NOT APPLICABLE IN THE INSTANT CASE; THE ASSESSEE HAVING ADMITTEDLY PURCHASED THE RESIDENTIA L FLAT FROM THE BUILDER. IN THIS REGARD, WE FIND, STRANGELY THOUGH, THAT BOTH THE PARTIES RE LY ON THE SAME BILL (I.E., DATED 21.07.2006) BY ONE, SHRI PRASAD SOHONI, ARCHITECT A ND INTERIOR DESIGNER (PB PGS.39, 40 TO 43). THE MATTER, THEREFORE, IS PURELY FACTUAL . SO HOWEVER, BEFORE WE PROCEED TO ANALYZE THE FACTS, IT WOULD BE RELEVANT TO STATE THE LAW IN THE MATTER, WITH REFERENCE TO WHICH THE MATTER WOULD THEN BE DECIDED, GIVEN THE FACTUAL FINDINGS. THIS BECOMES RELEVANT IN OUR VIEW OF BOTH THE PARTIES HAVING RELIED UPON CASE LAW. THE CASE LAW ADVERTED TO BY BOTH THE SIDE S HAS BEEN PERUSED AND, IN OUR CONSIDERED VIEW, THE EXPRESSION USED IN SECTION 54 (AS ALSO SECTION 54F) IS PURCHASE, IN CONTRADISTINCTION TO THE COST OF ACQUISITION IN S ECTION 48. THE SCOPE OF THE SAID WORD IS IMPLICIT THEREIN, AND WOULD EXTEND TO ACQUIRING A H OUSE PROPERTY, I.E., IN AN INHABITABLE STATE BY DEFINITION, INASMUCH AS A HOUSE WHICH IS N OT INHABITABLE OR IN A LIVABLE CONDITION CANNOT BE CONSIDERED TO BE A HOUSE IN THE FIRST PLA CE OR, IN ANY CASE, IS NOT ONE AS 4 ITA NO.7715/MUM/2011 (A.Y. 2006-07) ACHYUT RAMCHANDRA SAMANT VS. ASST. CIT CONTEMPLATED BY THE PROVISION. ANY FURTHER AMOUNT E XPENDED BY THE ASSESSEE, I.E., AFTER THE ACQUISITION OF THE HOUSE PROPERTY IN A HABITABL E STATE, CANNOT BE CONSIDERED AS TOWARDS ITS PURCHASE COST OR COST OF CONSTRUCTION, AS THE C ASE MAY BE. THE SAME MAY BE TOWARD PROVIDING FURTHER AMENITIES OR ADDITIONS THERETO, O R RENOVATION, ETC., EITHER QUALIFYING AS COST OF IMPROVEMENT OR NOT SO. BUT, THE SAME CANN OT BE CONSIDERED AS PART OF THE PURCHASE COST, WHICH IS APPLICABLE IN THE INSTANT C ASE. COMING TO THE FACTS OF THE PRESENT CASE, THE ASSES SEE BY OWN ADMISSION SHIFTED TO THE NEW PREMISES IN OCTOBER, 2005. THE PROPERTY WAS INSPECTED THEREAFTER BY THE ARCHITECT, SHRI PRASAD SOHONI, IN NOVEMBER, 2005. A LETTER FROM HIM DATED 29.10.2008, IS PLACED ON RECORD (PB PG.38), STATING THAT THE BUILD ING HAVING BEEN KEPT UNUSED AND UNOCCUPIED FOR A FEW YEARS, WAS POORLY MAINTAINED A ND NOT SAFE FOR HABITATION OR USE. CIVIL WORK COMPRISING RE-PLASTERING, RE-TILING, WAT ERPROOFING, RE-WIRING AND INSTALLATION OF FULL LENGTH GRILLS FOR SAFETY, WAS REQUIRED. THE SA ME HAS BEEN FOUND BY THE REVENUE AS FOR THE INTERIOR WORK AND RENOVATION. WE FIRSTLY OBSERV E THAT WHILE THE INSPECTION REPORT IS DATED 29.10.2008, THE INSPECTION HAS ADMITTEDLY BEE N CARRIED OUT IN NOVEMBER, 2005, I.E., THREE YEARS EARLIER. THE SAID LETTER IS, THUS, PREP ARED SOLELY OUT OF MEMORY, AND CANNOT THEREFORE BE CONSIDERED AS A CREDIBLE EVIDENCE. TWO , THE INSPECTION, PECULIARLY ENOUGH, IS CARRIED OUT BY AN INTERIOR DESIGNER, AND NOT THE CI VIL CONTRACTOR OR STRUCTURAL ENGINEER. FURTHER, THE WORK WAS ADMITTEDLY CARRIED OUT FROM N OVEMBER, 2005 ONWARDS, OVER THE NEXT FEW MONTHS. IT IS ONLY AFTER ENSURING THE INHA BITABLE STATUS OF THE HOUSE, BY CAUSING TO REMOVE STRUCTURAL AND/OR CONSTRUCTIONAL DEFICIEN CIES, IF ANY, THAT A PERSON WOULD SHIFT, THEN CALLING THE ARCHITECT/INTERIOR DESIGNER FOR BE TTER AMENITIES. WHEREAS, AS AFORE-STATED, THE ASSESSEE BY OWN ADMISSION HAS ADMITTEDLY SHIFTE D TO THE NEW PREMISES IN OCTOBER, 2005. THE OCCUPANCY CERTIFICATE (OC) OF THE BUILDIN G HAD BEEN OBTAINED BY THE BUILDER MUCH EARLIER, SIGNIFYING SAFE, INHABITABLE STATE OF THE BUILDING. THE AGREEMENT FOR SALE (AFS) (COPY ON RECORD) FURTHER CLARIFIES OF COMPLIA NCE OF ALL THE TERMS AND CONDITIONS OF THE SANCTION OF THE BUILDING PLAN AS LAID DOWN BY T HE MUNICIPAL CORPORATION. ANNEXURE D TO THE AFS, EVEN AS POINTED OUT BY THE A.O., STATES THE SPECIFICATIONS AND AMENITIES PROVIDED FOR, AND IN SUFFICIENT DETAIL, AND WHICH C LEARLY EXHIBIT PROVISION OF ALL AMENITIES, 5 ITA NO.7715/MUM/2011 (A.Y. 2006-07) ACHYUT RAMCHANDRA SAMANT VS. ASST. CIT EXTRACTING THE SAID ANNEXURE AS A PART OF HIS ORDER (REFER PARAS 4.6 & 4.7 THEREOF). FURTHER, CLAUSE 13 OF THE AFS PROVIDES THAT ANY DEFICIENCY I N THE CONSTRUCTION OF THE FLAT/BUILDING OR OTHERWISE BROUGHT TO THE NOTICE OF THE BUILDER W ITHIN ONE YEAR OF TAKING THE POSSESSION SHALL BE DULY ATTENDED TO AT HIS COST. IT IS, THERE FORE, INCONCEIVABLE THAT WHILE THE BUILDER IS OBLIGED BY CONTRACT TO REMOVE THE DEFICIENCY IN THE CONSTRUCTION, THE ASSESSEE NOT ONLY CHOOSES NOT TO BRING THE SAME TO HIS NOTICE, BUT AL SO MOVES INTO AN UNINHABITABLE FLAT. THE VERY FACT OF HIS LIVING FOR MONTHS THEREAFTER WHILE WORK WAS BEING CARRIED OUT ITSELF CONFIRMS THAT THE MODIFICATIONS BEING MADE DID NOT IMPACT INHABITABLE STATE OF THE RESIDENTIAL FLAT. THE ARCHITECT, IN ANY CASE, DOES LITTLE BY WAY OF STRUCTURAL MODIFICATION. THE WORK DONE, AS A PERUSAL OF THE BILL WOULD SHOW, IS TOWARD UPGRADING INTERIORS, INTERIOR DESIGNING, EXTENDING TO CURTAINS, EXPENDITURE IN RE SPECT OF WHICH THOUGH HAS NOT BEEN CLAIMED. THE TOTAL EXPENDITURE ON WATERPROOFING WOR KS TO RS. 0.44 LACS. THE IMPUGNED SUM HAS ACCORDINGLY RIGHTLY BEEN CONSIDERED BY THE REVENUE AUTHORITIES AS TOWARD INTERIOR DESIGNING AND RENOVATION. WE DO OBSERVE THAT IN A DECISION BY THE TRIBUNAL, I .E., SHRINIVAS R. DESAI VS. ASST. CIT (OSD) [2013] 35 TAXMANN.COM 170 (AHD.), IT HAS BEEN STAT ED THAT THE IMPROVEMENTS EFFECTED TO BRING THE HOUSE PROPERTY TO A MORE IMMA CULATE CONDITION AFTER PURCHASE, AS TO MAKE IT TO THE BUYERS TASTE, WOULD BE A DEDUCTIBLE EXPENDITURE. THE SAID DECISION IS WITHOUT REFERENCE TO ANY PRECEDENTS; THE PREDOMINAN T VIEW AS EXPRESSED BY THE DECISIONS CITED BEFORE US, LISTED AS UNDER, BEING OF THE SCOP E OF THE WORD PURCHASE BEING LIMITED TO BRINGING AN INHABITABLE HOUSE PROPERTY INTO EXISTEN CE, OR, TO PUT IT IN MORE BROAD TERMS, THE THING BOUGHT IN A FUNCTIONAL STATE. THAT IS, TH E INTERPRETATION BEING SOUGHT, APART FROM BEING SUBJECTIVE AND OF INDEFINITE SCOPE, DOES NOT MEET THE MANDATE OF LAW: I. MRS. N. SHIRIN PETIGARA VS. THIRD ITO [1987] 28 TTJ 324 (BOM.) II. MRS. SONIA GULATI VS. ITO [2001] 115 TAXMANN 232 (MUM) (MAG.) III. MRS. GULSHANBANOO R. MUKHI VS. JT. CIT [2002] 83 ITD 649 (MUM) IV. JT. CIT VS. SMT. ARMEDA K. BHAYA [2005] 95 ITD 313 (MUM) V. DY. CIT VS. UDAY S. KOTAK [2005] 96 ITD 177 (MUM) VI. SALEEM FAZELBHOY VS. DY. CIT [2007] 106 ITD 167 (MUM) 6 ITA NO.7715/MUM/2011 (A.Y. 2006-07) ACHYUT RAMCHANDRA SAMANT VS. ASST. CIT FURTHER, THE INTERPRETATION AS PROVIDED ACCORDS WIT H THE COMMON UNDERSTANDING OF THE WORD; IT SIGNIFYING A PRACTICAL DAILY LIFE PHENOMEN ON AND, THUS, A DEFINITE PERCEPTION AND MEANING, AND WE FIND NO REASON TO STRETCH IT BEYOND ITS REGULAR AND DAILY USER PARAMETERS. IN FACT, THE MATTER SHOULD BE REGARDED AS WELL SETT LED; THE WORD PURCHASE, AND IN THE CONTEXT OF SECTION 54 ITSELF, ALSO REFERRED TO BY T HE TRIBUNAL IN SOME OF THE DECISIONS AFORE- CITED, HAS BEEN EXPLAINED BY THE HONBLE APEX COURT IN CIT VS. T. N. ARAVINDA REDDY [1979] 120 ITR 46 (SC) AS BEING REQUIRED TO BE CONS TRUED AS PERMITTED BY ITS ORDINARY MEANING. IN ITS WORDS (AT PG.48): WE FIND NO REASON TO DIVORCE THE ORDINARY MEANING OF THE WORD 'PURCHASE' AS BUYING FOR A PRICE OR EQUIVALENT OF PRICE BY PAY MENT IN KIND OR ADJUSTMENT TOWARDS AN OLD DEBT OR FOR OTHER MONETAR Y CONSIDERATION FROM THE LEGAL MEANING OF THAT WORD IN SECTION 54(1). AS EXPLAINED BY THE HONBLE APEX COURT IN PRAKASH NATH KHANNA VS. CIT [2004] 266 ITR 1 (SC), RELIED UPON BY THE REVENUE, A STATUTORY PRO VISION, WHICH IS PLAIN AND UNAMBIGUOUS, CANNOT BE THE SUBJECT MATTER OF AN INT ERPRETATION INTERFERING WITH THE PLAIN MEANING. FURTHER, THE INTERPRETATION SHOULD AVOID T HE DANGER OF A PRIOR DETERMINATION OF THE MEANING WITH ONES OWN PRECONCEIVED NOTIONS. THE ASSESSEE, ACCORDINGLY, WOULD NOT SUCCEED ON ITS GROUND NO.2. 5. THE NEXT DISALLOWANCE CLAIMED (PER GD. # 3) IS A T RS. 4.0 LACS PAID TO THE BUILDER- SELLER VIDE TWO CHEQUES OF RS. 2.0 LACS EACH DATED 30.10.2005, I.E., THE DATE OF THE SALE AGREEMENT (PB PG. 46). THE SAME IS DISALLOWED AS, T HOUGH CLAIMED AS TRANSFER CHARGES, NO MATERIAL TO SUPPORT THE CLAIM STANDS LED BY THE ASSESSEE, SO THAT THE PURPOSE FOR WHICH THE MONEY IS GIVEN IS NOT KNOWN. THE POSITION CONTI NUES TO BE THE SAME BEFORE US AS WELL. EVEN A SPECIFIC QUERY RAISED BY THE BENCH DURING HE ARING IN THIS REGARD ELICITED NO RESPONSE. IN FACT, CLAUSE 15 OF THE AGREEMENT (AFS) PROVIDES FOR LEGAL CHARGES AND SECURITY TO BE DEPOSITED BY THE BUYER WITH THE OWNE R-BUILDER. THE LEGAL CHARGES ARE TO COVER THE COST FOR FORMATION OF THE (HOUSING) SOCIE TY AND IT REGISTRATION, AND FOR THE PREPARATION OF THE AFS AND CONVEYANCE (CL. 16). THE ASSESSEES CLAIM FOR DEDUCTION OF 7 ITA NO.7715/MUM/2011 (A.Y. 2006-07) ACHYUT RAMCHANDRA SAMANT VS. ASST. CIT RS. 4 LACS IS TOTALLY UNSUBSTANTIATED, AND THE REVE NUES ACTION IN DENYING ITS CLAIM CANNOT BE FAULTED WITH. WE DECIDE ACCORDINGLY. 6. FINALLY, PER GROUND # 4, THE ASSESSEE CLAIMS DED UCTION FOR RS. 7 LACS STATED TO BE INCURRED ON THE IMPROVEMENT OF THE HOUSE PROPERTY S OLD DURING THE YEAR, IN THE YEAR 1993. THE SAME WAS CONSIDERED UNACCEPTABLE BY THE REVENUE FOR LACK OF EVIDENCE TO ESTABLISH THE CLAIM; THE ASSESSEE FURNISHING AN AFFIDAVIT AND A LETTER FROM THE CONTRACTOR DATED 15/11/2008 TOWARD THE SAME. EVEN NO PROOF OF PAYMEN T TO THE SAID CONTRACTOR OR HIS PAN, I.E., TOWARD THE GENUINENESS OF THE CONTRACTOR , ETC. HAD BEEN FURNISHED. IN ANY CASE, THE ASSESSEE HAD 24% SHARE IN THE PROPERTY, SO THAT EVEN ADMITTING THE CLAIM WOULD IMPLY IT TO BE VALID FOR RS. 1.68 LACS. THE SAME STOOD RE JECTED UNDER THESE CIRCUMSTANCES. BEFORE US, THE LD. AR WOULD SUBMIT THAT THE PROPERT Y SOLD CAME IN EXISTENCE IN THE YEAR 1945, AND WAS IN THE ASSESSEES OCCUPATION FOR THREE DECADES PRIOR TO THE UNDERTAKING THE RENOVATION, FOR WHICH THE COPY OF THE SALE DEED THE SAME HAVING BEEN ALSO SOLD IN OCTOBER, 2005 - BEARING ITS ANTECEDENTS, HAS BEEN P LACED ON RECORD (PB PGS. 47-56). BANK STATEMENTS ARE NOT PRESERVED FOR SO LONG, AND WHICH EXPLAINS THEIR NON PRESENTATION, EVEN AS THE ASSESSEE HAS STATED THE SOURCE OF PAYMENT AS THE SALE OF ANOTHER PROPERTY AT THE RELEVANT TIME. THE LD. DR WOULD RELY ON THE ORDERS OF THE AUTHORITIES BELOW. AS WE SEE IT, THERE ARE TWO ASPECTS TO THE MATTER; ONE, THE FACTUM OF THE WORK BEING UNDERTAKEN AND, TWO, ITS NATURE. THIS IS AS W HAT QUALIFIES FOR DEDUCTION IS THE EXPENDITURE INCURRED TOWARD THE COST OF IMPROVEMEN T. THE MOST DIRECT AND NORMAL EVIDENCE TOWARD THE SAME WOULD BE THE BUILDING PLAN AT THE TIME OF ACQUISITION OF THE RELEVANT PROPERTY, AND THAT FOR THE MODIFICATION/S UNDERTAKEN, WHICH WOULD NECESSARILY HAVE TO BE, I.E., BY LAW, GOT SIMILARLY APPROVED. T HIS WOULD NOT ONLY SUBSTANTIATE OF THE MODIFICATIONS BEING IN THE NATURE OF ADDITIONS/IMPR OVEMENTS, BUT ALSO PROVIDE MATERIAL TOWARD ESTIMATING ITS COST, WHERE DIRECT EVIDENCE T OWARD THE SAME, AS IN THE INSTANT CASE, IS NOT FORTHCOMING. SO, HOWEVER, AS THE IMPROVEMENT S COULD ASSUME A FORM OTHER THAN BY WAY OF ADDITION/S, OR MAY HAVE BEEN UNDERTAKEN NOT FOLLOWING THE PROPER PROCEDURE, IT MAY NOT BE CORRECT TO FORECLOSE THE ASSESSEES CASE ON THIS BASIS. ANY HOUSE PROPERTY 8 ITA NO.7715/MUM/2011 (A.Y. 2006-07) ACHYUT RAMCHANDRA SAMANT VS. ASST. CIT WOULD NECESSARILY WARRANT BEING KEPT IN A STATE OF GOOD REPAIRS. MERELY BECAUSE REPAIRS ARE NOT CARRIED OUT FOR A NUMBER OF YEARS TOGETHER, LEADING TO INCURRING EXPENDITURE IN LUMPSUM OR IN A HUGE SUM, WOULD NOT BY ITSELF MAKE IT CAPITAL EXPENDITURE. AS IT APPEARS TO US, THE SAME IS ONLY BY WAY OF SUBSTANTIAL REPAI RS, I.E., THAT HAD ACCUMULATED OVER THE PAST DECADES. THE VERY NATURE OF THE EXPENDITURE AN D ITS COST A SIMILAR PROPERTY (AND WHICH WOULD INCLUDE LAND COST AS WELL) FETCHING RS. 9 LACS IN THE YEAR 1994 (PB PGS. 59 62), WOULD EXHIBIT THE COSTS OBTAINING AT THE RELEV ANT TIME, SO THAT THE ASSESSEES CLAIM, EVEN ASSUMING ITS VALIDITY, IS ON A HIGHER SIDE. SO , HOWEVER, AS SOME COST AS BEING TOWARD IMPROVEMENT CANNOT BE DENIED, WE ESTIMATE THE SAME AT RS. 1.50 LACS, I.E., AT AROUND 20% OF THE EXPENDITURE CLAIMED TO HAVE BEEN INCURRED. T HE DOUBT EXPRESSED BY THE REVENUE ON THE GENUINENESS OF THE CLAIM IS TO OUR MIND MISP LACED, AS ANY CLAIM DATING BACK BY OVER 15 YEARS, AND NOT SPECIFICALLY DOCUMENTED FOR POSTERITY, IS BOUND TO SUFFER FROM SOME DEFICIENCIES. AS OBSERVED EARLIER, ANY PROPERT Y WOULD WARRANT REPAIRS, AND THAT IS WHAT LENDS CREDENCE TO THE CLAIM PER SE , SO THAT THE ISSUE IS ESSENTIALLY WITH REGARD TO T HE NATURE OF COST INCURRED. WE ARE ALSO NOT IMPRESSED WITH THE REVENUES ARGUMENT OF THE ASSESSEE OWNING 24% SHARE IN THE PROPERTY WOULD BE ENTITLED TO EXPENDITURE, IF AT ALL, IN THAT RATIO. THIS IS AS THE ASSESSEE WOULD, LIKE ANY NORMAL, PRUDENT PERSON, UNDERTAKE WORK, THE NATURE AND QUANTUM OF WHICH WOULD ALSO VARY FRO M PERSON TO PERSON, INCURRING COST, ONLY IN RESPECT OF THE PROPERTY IN HIS OCCUPATION A ND USER. WE DECIDE ACCORDINGLY, AND THE ASSESSEE GETS PART RELIEF. 7. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY A LLOWED. 1/+23451+' 60) 7 +'+8 ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 23, 20 13 SD/- SD/- (D. MANMOHAN) (SANJAY ARORA) / VICE PRESIDENT / ACCOUNTANT MEMBER ( 9* MUMBAI; : DATED : 23.08.2013 )3 ; ROSHANI , SR. PS 9 ITA NO.7715/MUM/2011 (A.Y. 2006-07) ACHYUT RAMCHANDRA SAMANT VS. ASST. CIT ! ' #$%& ' &$ COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. ( <+ = > / THE CIT(A) 4. ( <+ / CIT - CONCERNED 5. ?)@A$3+3B4 ,B4/ ( 9* / DR, ITAT, MUMBAI 6. A5C* GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , ( 9* / ITAT, MUMBAI