Santoshkumar Sudhakar Khare, Pune V. Income tax Officer,

ITA 97/PUN/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4939 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-05-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 13-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Cost of acquisition
• Section: 143(3); 54

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE , BEFORE MS. SUSHMA CHOWLA, JM ./ ITA NO. 97/PUN/2017 / ASSESSMENT YEAR : 2012-13 MR. SANTOSHKUMAR SUDHAKAR KHARE, NEW ADD : FLAT NO. 1304 BUILDING T-13, BLUE RIDGE, HINJEWADI PHASE-1, PUNE-411 057 PAN : AFSPK6031L ....... / APPELLANT ! / V/S. THE INCOME TAX OFFICER, WARD 7(1), PUNE. / RESPONDENT APPELLANT BY : SMT. M. N. KULKARNI RESPONDENT BY : SHRI M. K. VERMA / DATE OF HEARING : 08.10.2018 / DATE OF PRONOUNCEMENT : 22 .10.2018 ' / ORDER PER SUSHMA CHOWLA, JM THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS), PUNE-10 DATED 07.12.2016 RELA TING TO ASSESSMENT YEAR 2012- 13 AGAINST ORDER PASSED UNDER SECTION 143(3) OF TH E INCOME TAX ACT, 1961 ( IN SHORT THE ACT). 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL:- 2 ITA NO.97/PUN/2017 A.Y.2012-13 1. COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN NOT ALLOWING COST OF ACQUISITION OF RESIDENTIAL FLAT OF RS.21,00,000/- A ND INDEXATION THEREOF FOR COMPUTATION OF CAPITAL GAIN ON THE SAID FLAT. APPEL LANT PRAYS FOR DEDUCTION U/S.48 IN RESPECT OF WHOLE COST INCLUDING INDEXATIO N THEREOF . 2. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN GIVING DIRECTION IN RESPECT OF CLAIM OF APPELLANT U/S.54 OF RS.1,21,10, 536/- FOR VERIFICATION, WHICH ASSESSING OFFICER RESTRICTED TO RS.1,07,41,933/-, I NSTEAD OF ALLOWING IT. APPELLANT PRAYS FOR FULL CLAIM U/S.54 OF RS.1,21,10 ,536/-. 3. APPELLANT PRAYS FOR JUST AND EQUITABLE RELIEF. 4. APPELLANT PRAYS TO CANCEL THE INTEREST CHARGES U /S.234B. 5. APPELLANT PRAYS TO ADD, ALTER, AMEND, MODIFY AND OR WITHDRAW THE GROUND/S DURING THE PROCEEDINGS. 3. THE LD. AR FOR THE ASSESSEE MOVED AN APPLICATION FOR ADJOURNMENT. HOWEVER, ON EARLIER OCCASION, ADJOURNMENT WAS GRANTED TO THE ASSESSEE ON 09.04.2018, 08.05.2018 AND 14.08.2018 AT THE REQUEST OF LD. AR. ACCORDINGLY, ADJOURNMENT APPLICATION DATED 08.10.2018 FILED BY LD. AR FOR TH E ASSESSEE WAS REFUSED AND THE MATTER WAS TAKEN UP FOR ADJUDICATION. THE ASSESSEE HAD FILED WRITTEN SUBMISSIONS. 4. THE LD. DR FOR THE REVENUE PLACED RELIANCE ON T HE ORDER OF CIT(A). 5. THE ISSUE RAISED IN THE PRESENT APPEAL IS WITH R EGARD TO COMPUTATION OF CAPITAL GAIN ON SALE OF RESIDENTIAL FLAT. THE ASSESSEE IS A GGRIEVED BY THE ORDER OF CIT(A) IN NOT ALLOWING COST OF ACQUISITION OF RESIDENTIAL FLA T OF RS.21,00,000/- AND INDEXATION THEREOF. THE ASSESSEE IS FURTHER AGGRIEVED WITH THE DIRECTION OF CIT(A) IN RESPECT OF ASSESSEES CLAIM U/S.54 OF THE ACT WHEREIN THE ISSU E HAS BEEN SENT BACK TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION. THE ASSESSEE AL SO FILED WRITTEN SUBMISSIONS WHICH ARE TAKEN ON RECORD. 6. BRIEFLY IN THE FACTS OF THE CASE, THE ASSESSEE H AD SOLD TWO FLATS BEARING FLAT NO.603A & 603B AT ROYAL RESIDENCY, SHIVAJINAGAR, PU NE-5 FOR TOTAL CONSIDERATION OF RS.2,15,00,000/-. THE SAID FLATS WERE PURCHASED IN THE YEAR 2004 VIDE DEED OF AGREEMENT REGISTERED ON 29.07.2004 AT RS.40,00,000/ -. HOWEVER, IN ORDER TO COMPUTE LONG TERM CAPITAL GAIN, THE NET PURCHASE COST WAS D ECLARED AT RS.60,91,586/- WHICH 3 ITA NO.97/PUN/2017 A.Y.2012-13 INCLUDES SUM OF RS.21,00,000/- WHICH WAS CLAIMED TO HAVE BEEN INCURRED FOR ADDITIONAL AMENITIES IN THE YEAR OF PURCHASING ITSE LF. THE ASSESSING OFFICER OBJECTED TO THE SAID COMPUTATION OF COST OF ACQUISITION SPEC IFICALLY IN RESPECT OF THE MAJOR AMOUNT OF RS.21,00,000/-. THE ASSESSEE FAILED TO FU RNISH ANY COPY OF BILLS/VOUCHERS FOR THE ITEMS SPECIFIED AS ADDITIONAL AMENITIES PRO VIDED BY THE SELLER/ BUILDER ON ACCOUNT OF WHICH AN AMOUNT OF RS.21,00,000/- I.E. M ORE THAN 50% OF THE COST OF THE FLATS WAS CLAIMED TO BE PAID. THE ASSESSEE CLAIMS T O HAVE PAID SOME AMOUNT ON THE BASIS OF MUTUAL AGREEMENT BETWEEN HIM AND BUILDER B UT THE SAID AGREEMENT WAS UNREGISTERED. THE ASSESSING OFFICER, THUS, HELD TH E CLAIM OF THE ASSESSEE TO BE NOT GENUINE AND THE AMOUNT WAS EXCLUDED FROM THE COST O F ACQUISITION OF THE SAID FLAT. THE ASSESSEE HAD FURTHER CLAIMED DEDUCTION U/S.54 O F THE ACT ON ACCOUNT OF INVESTMENT IN ANOTHER FLAT. THE ASSESSEE HAD DECLAR ED THE SAID INVESTMENT IN THE NEW ASSET AT RS.1.21 CRORES WHEREAS, THE ASSESSING OFFI CER RESTRICTED THE SAME AT RS.1.07 CRORES. 7. BEFORE THE CIT(A), ASSESSEE FURNISHED EXPLANATIO N. HOWEVER, THE FIRST ISSUE OF RS.21,00,000/- BEING ADDITIONAL COST OF THE SAID FL AT PAID TO THE BUILDER, WAS NOT ACCEPTED. FURTHER IN RESPECT OF THE SECOND CLAIM OF DEDUCTION U/S.54 OF THE ACT, THE MATTER WAS REMANDED BACK TO THE FILE OF ASSESSING O FFICER FOR VERIFICATION. 8. NOW AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE F ILED APPEAL BEFORE THE TRIBUNAL. 9. ON PERUSAL OF THE RECORD, AND AFTER HEARING THE LD. D.R FOR THE REVENUE AND ALSO PERUSING THE WRITTEN SUBMISSIONS FILED BY THE LD. AR FOR THE ASSESSEE, THE FIRST ISSUE WHICH NEEDS TO BE ADDRESSED IS AGAINST COST O F ACQUISITION OF THE SAID FLAT SOLD BY THE ASSESSEE AND THE SECOND ISSUE IS AGAINST DED UCTION CLAIMED U/S.54 OF THE ACT. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HA D SOLD TWO RESIDENTIAL FLATS BEARING NO. 603A AND 603B IN ROYAL RESIDENCY AT GOK HALE ROAD, MODEL COLONY, PUNE FOR SALE CONSIDERATION OF RS.2,15,00,000/-. T HE ASSESSEE HAD PURCHASED THE 4 ITA NO.97/PUN/2017 A.Y.2012-13 SAID FLATS FOR RS.40,00,000/- VIDE AGREEMENT DATED 29.07.2004. THE ASSESSEE HAD FURTHER CLAIMED TO HAVE MADE CERTAIN ADDITIONAL WOR KS TO THE SAID FLAT WHICH WAS MADE BY BUILDER ITSELF FOR WHICH SUM OF RS.21,00,000/- W AS GIVEN TO THE BUILDER. OTHER AMOUNTS WERE ALSO CLAIMED AS ADDITIONAL EXPENSES TO THE SAID FLATS WHICH HAVE NOT BEEN DISPUTED. THE ASSESSING OFFICER DID NOT ACCEPT THE PLEA OF THE ASSESSEE VIS-A - VIS RS.21,00,000/-. IN ORDER TO SUPPORT ITS CASE RE GARDING PAYMENT OF RS.21,00,000/-, THE ASSESSEE RELIED ON UNREGISTERED DOCUMENT BETWEE N THE BUILDER AND ASSESSEE DATED 04.10.2004 UNDER WHICH THE BUILDER AGREED TO PROVIDE EXTRA FITTINGS AND FIXTURES. THE ASSESSING OFFICER NOTED THAT UNDISPUTEDLY ONUS WAS UPON THE ASSESSEE TO ESTABLISH ITS CASE ON THE CLAIM OF DEDUCTION. IN RE SPONSE, THE ASSESSEE FURNISHED CERTIFICATE DATED 15.07.2004 FROM M/S. BHOSALE MANA S DEVELOPERS OF HAVING RECEIVED RS.65,42,750/- TOWARDS TWO FLATS INCLUDING THE BASI C PRICE, MAINTENANCE DEPOSITS AND OTHER AMENITIES. UNDISPUTEDLY, THE SAID AGREEMENT I S AN UNREGISTERED DOCUMENT BUT THE ASSESSEE HAD FURNISHED CONFIRMATION FROM BUILDE R AND ALSO BREAK-UP OF THE ADDITIONAL SPECIFICATION PROVIDED. THE AMOUNTS WERE PAID BY WAY OF CHEQUE AS PER CERTIFICATE/CONFIRMATION DATED 15 TH JULY, 2004 FROM M/S. BHOSALE MANAS DEVELOPERS. THE ASSESSEE STATED THAT DUE TO AN INADVERTENT MIST AKE OF NOT REGISTERING THE ADDITIONAL AMENITIES AGREEMENT AND ANNEXURE, IT COU LD NOT BE SAID THAT IT IS NOT A COST OF ACQUISITION OF PROPERTY. I FIND MERIT IN THE PLE A OF ASSESSEE, SPECIFICALLY IN THE CIRCUMSTANCES, WHERE THE ASSESSEE HAD FURNISHED CON FIRMATION FROM BUILDER AND HAD ALSO PAID THE AMOUNT FOR ACQUISITION OF RESIDENTIAL FLATS BY CHEQUE. ACCORDINGLY, I HOLD THAT THE COST OF ACQUISITION IN THE HANDS OF ASSESS EE NEEDS TO BE INCREASED BY THE SAID SUM OF RS.21,00,000/- ON WHICH THE ASSESSEE IS ENTITLED TO CLAIM INDEXATION. ACCORDINGLY, THE ASSESSING OFFICER SHALL COMPUTE TH E INDEXATION OF COST OF ACQUISITION AFTER INCLUDING THE SUM OF RS.21,00,000/-. ACCORDIN GLY, GROUND OF APPEAL NO. 1 RAISED BY ASSESSEE IS ALLOWED. 10 . NOW COMING TO THE SECOND ISSUE I.E. CLAIM OF DEDUC TION U/S.54 OF THE ACT WHEREIN THE ASSESSEE HAD CLAIMED AN INVESTMENT IN N EW FLAT AT RS.1.21 CRORES WHICH WAS ALLOWED BY THE ASSESSING OFFICER AT RS.1.07 CRO RES. BEFORE THE CIT(A), THE 5 ITA NO.97/PUN/2017 A.Y.2012-13 ASSESSEE FURNISHED CERTAIN INFORMATION AND THE MATT ER HAS BEEN RESTORED BACK TO THE FILE OF ASSESSING OFFICER BY THE CIT(A) TO GO THROU GH THE CLAIM AND IN CASE THE CLAIM IS FOUND TO BE CORRECT THEN NECESSARY EFFECT IS TO BE GIVEN IN THE ORDER CONSIDERING ALL DOCUMENTARY EVIDENCES AND PROVISIONS OF SECTION 54 OF THE ACT. THE PLEA OF THE ASSESSEE AGAINST THE SAME IS NOT SUSTAINABLE SINCE THE ISSUE HAS BEEN SENT BACK BY THE CIT(A) TO THE FILE OF ASSESSING OFFICER FOR VER IFICATION AND WHO SHALL ALLOW THE CLAIM OF ASSESSEE IN ACCORDANCE WITH THE DIRECTION OF CIT (A). ACCORDINGLY, GROUND OF APPEAL NO. 2 RAISED BY ASSESSEE IS DISMISSED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED ON 22 ND DAY OF OCTOBER, 2018. SD/- (SUSHMA CHOWLA) /JUDICIAL MEMBER / PUNE; / DATED : 22 ND OCTOBER, 2018. SB ' # $%&' ('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS), PUNE-10. 4. THE PR. CIT-4, PUNE. 5. !'# $% , & $% , - '() , / DR, ITAT, SMC BENCH, PUNE. 6. #*+ ,- / GUARD FILE. // TRUE COPY // &. / BY ORDER, / $) /PRIVATE SECRETARY & $% , / ITAT, PUNE.