Nisha Nagar, Jaipur V. DCIT, Room No. 413

ITITA 15/JPR/2022

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8647 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 10-11-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-09-2022
• Assessment Year: misc
• Appeal Filed On: 09-08-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Cost of acquisition; Capital Gains
• Section: 143(3); 144C; 143(2); 139(1); 43; 48

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,’A’ JAIPUR Jh laanhi xkslkbZ] U;kf;d lnL; ,oa Jh jkBkSM deys’k t;arHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@IT(IT) A No. 17/JP/2022 fu/kZkj.k o"kZ@Assessment Year :2019-20 Shri Arun Nagar 103 Athena Building, Sawai Jaisingh Road Bani Park, Jaipur cuke Vs. DCIT Circle (International Taxation) Jaipur. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AESPN 6424 M vihykFkhZ@Appellant izR;FkhZ@Respondent vk;dj vihy la-@IT(IT)A No.15/JP/2022 fu/kZkj.ko"kZ@Assessment Year : 2019-20 Smt. Nisha Nagar 103 Athena Building, Sawai Jaisingh Road Bani Park, Jaipur cuke Vs. DCIT, Circle (International Taxation) Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AOQPN 4881 A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri Mukesh Soni (C.A.) jktLo dh vksjls@Revenue by: Shri P. R. Meena (CIT) lquokbZ dh rkjh[k@Date of Hearing : 27/09/2022 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 11/11/2022 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, A.M. These are the two appeals filed by the assessee aggrieved from the order of the assessment passed u/s. 143(3) r.w.s. 144C(13) [ Here in after 2 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur referred as ld. AO ] for the assessment year 2019-20 dated 21.07.2022 & 28.06.2022 which in turn passed after the directions of given by the Dispute Resolution Panel passed under Section 144C(5) of the Income tax Act, 1961 (in short 'the Act') dated 14.06.2022 & 20.05.2022 respectively. 2. Since the issues involved in these appeals are identical on facts and grounds raised are almost same. Both these appeals were heard together with the agreement of both the parties and these appeals are being disposed off by this consolidated order. 3. At the outset, the ld. AR has submitted that the matter pertaining to Shri Arun Nagar in ITA no. 17/JPR/2022 may be taken as a lead case for discussions as the issues involved in the lead case are common and inextricably interlinked or in fact interwoven and the facts and circumstances of other cases are exactly identical in other case. The ld. DR did not raise any specific objection against taking that case as a lead case. Therefore, for the purpose of the present discussions, the case of ITA No. 17/JPR/2022 is taken as a lead case. Based on the above arguments we have also seen that for both these appeals are similar, facts are similar and arguments were similar and therefore, were heard together and are 3 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur disposed by taking lead case facts, grounds and arguments from the folder in ITA No. 17/JPR/2022. 4. In the lead case in IT(IT)A No. 17/JP/2022 for the A.Y. 2019-20 the assessee has marched this appeal on following grounds: “1. Under the facts and the circumstances of the case and in law, the Impugned Assessment order dated 21.07.2022 passed by the Ld. AO 143(3) r.w.s. 144C(13)of the Income Tax Act, 1961 following the direction of Dispute Resolution Panel is perverse, non-speaking, arbitrary and bad in law. 2. Under the facts and the circumstances of the case and in law, the Ld.AO has grossly erred in: a. making impugned addition of Rs. 7,83,85,106 (indexed value of Rs. 8,50,69,107 comprised in total addition of 11,65,94,547/-) alleging to be interest expenditure claimed by Assessee as against the actual interest expenditure of Rs. 14,55,773/- only (indexed cost Rs. 15,79,908/-) claimed by Assessee, thereby making impugned total addition of Rs. 11,65,94,547/- in respect of alleged indexed cost of interest expenditure on capital asset b. in denying the deduction of indexed cost of acquisition while disallowing interest expenditure claimed by Assessee. 3. Under the facts and the circumstances of the case and in law, the Ld. AO has grossly erred in disallowing indexed cost of interest expenditure incurred on capital asset, which is deductible u/s 48 of the Act. 4. Under the facts and circumstances of the case and in law, the Ld. AO has erred in not allowing amount of Rs. Rs. 82,67,717/- incurred towards settlement of dispute to title of property. 5. Under the facts and the circumstances of the case and in law, the Ld. CIT(A) has erred in levying interest u/s 234B, 234C and 234D of the Act. 6. Under the facts and circumstances of the case and in law, the Ld.AO has grossly erred in initiating penalty proceeding u/s 270A of the Act. 4 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur 7. The appellant craves leave to add, amend and modify all or any ground of appeal on or before the date of hearing.” 5. The fact as culled out from the records is that the Assessee is Non- resident, employed outside India since last several years. For the year under consideration the Assessee has filed return of income u/s 139(1) of the Act dated 31.08.2019 at returned income of Rs. 25,61,200/-, which was subsequently revised on 30.11.2020 wherein the assessee has declared long term capital loss of Rs. 16,01,462/- on the transfer of right in property in the project named "Premier Terraces" of Emaar and Rs. 4,49,15,513/ on the transfer of right in flat/property in the project named "The Magnolias" of DLF, which was jointly acquired by him along with his wife Mrs. Nisha Nagar. The case of the assessee was selected for complete scrutiny under CASS after issuing notice u/s. 143(2) of the Act dated 31.03.2021. Accordingly, various notices were issued from time to time which was compiled by the assessee. 6. In the assessment proceedings the ld. AO observed that the assessee has sold two flats one at Magnolias Gurgaon, Haryana at a gross value of Rs. 18,00,00,000/- and another flat at Palam Drive for gross value of 1,62,00,000/-. The share of the assessee in this property was 50 % so he 5 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur offered a sum of Rs. 9,81,00,000 [50 % of (18,00,00,000+1,62,00,000)] as sale consideration. The ld. AO from the ITR observed that the assessee has claimed indexed cost of acquisition & indexed cost of improvement and resultantly declared Long Term Capital loss of Rs. 4,65,16,975/- on sale of both the properties. On verification of indexed cost of acquisition, it is noticed that the assessee has claimed indexation on Rs. 75,00,000 being the amount of his share for expenses paid for settlement of dispute with Shri Sunil Miglani, the indexed value claimed was worked out at Rs. 82,67,717/-, in support of the claim the assessee submitted settlement agreement. From the said deed ld. AO observed that assessee Shri Arun Nagar and his wife Nisha Nagar has paid Rs. 1,50,00,000/- to Mr. Sunil Miglani towards the settlement of all claims against the property purchase dispute. The ld. AO observed that aforesaid expenses was not incurred on capital assets, therefore, the indexed cost of Rs. 82,67,717/- claimed by the assessee was rejected. The ld. AO has also observed from the ITR that assessee had claimed indexation on interest paid on loan amount taken by him to acquire the property. The assessee has claimed indexation amounting to Rs. 11,65,94,547/- on account of interest paid by him on loan amount. The ld. AO stated that there is a provision in the Income Tax Act which allow the assessee to claim deduction on account of interest paid by 6 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur the assessee on loan taken for the acquisition of home u/s. 24(b) of the Act. Based on these ld. AO taken a view that the indexation of expenses incurred on the loan amount cannot be claimed and thus was disallowed in the draft assessment order. 7. Being aggrieved from the said draft assessment order the assessee filed objection before Hon’ble Dispute Resolution Panel (DRP) on 27.10.2021. The ld. DRP vide its order dated 10.05.2022 issued following direction; “4.2.3 The Panel takes a note as under (i) It is almost a settled law, being upheld by the several courts that interest forms part of the cost of capital assets. (ii) As per Section 24B, interest paid on a home loan shall be allowed as a deduction at the time of computing income from house property. (iii) Sections 48, 49 and 55 of the IT Act suggest the manner of computation of capital gain and the cost which shall be considered for the purpose computing the capital gains. This section does not explicitly state whether the interest paid on a home loan can be considered as a cost of acquisition to compute capital gain on sale of house property. (iv) In other words. Income Tax Act is silent whether an assessee can claim the double benefit of deduction under section 24B as well as adding the same interest in the cost of acquisition at the time of computing capital gain on sale so house property. (v) The position of claiming expenditure under both the head of income would certainly invite litigations. (vi) In view of various judicial pronouncements, the case is strong in favour of assessee when he is not able to claim complete amount of interest paid as a 7 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur deduction from house property, If the excess interest is not allowed as a deduction earlier so it would not amount to double deduction by giving benefit of the indexation of interest paid. (vii) Decision of ITAT Bangalore Bench in case of (Captain B L. Lingaraju Vs. ACIT) in 2016- "The Tribunal's mentioned that the taxpayer should have placed reliance on various other judgments of the Madras High Court, Delhi High Court and of other Tribunals. As there was a judgment of its own jurisdictional High Court the Tribunal did not consider these other judgments as relevant to the case. Moreover, the Tribunal justified that in the case of Shri Hariram Hotels, High Court followed its original judgement in case of MaithreyiPai (CIT v/s MaithreyiPai 1985 152 ITR 247 Karnataka). In the case of Maithreyi Pai, the taxpayer deducts the interest paid on loan received from directors for the purchase of shares, at the time of computing capital gains The High Court held that the interest paid the borrarings for the acquisition of capital assets must fall for deductions as the cost of acquisition. The tribunal followed the rationale behind the decision of the High Court in the case of Maithreyipai and held, in the present case, the taxpayer was not eligible to claim interest paid on home loan as part of cost of acquisition in computing capital gain as the said interest was already allowed as a deduction from house property. No taxpayers under the scheme of the Act could be allowed t deduction of the same amount twice." (viii) A reference is made to the decision of the Apex Court in the case of Escorts Ltd & Another v Union of India (1993) 199 ITR 43 (SC) gave its observations on the possibility of claiming double deductions under the Income-tax statute. "In our view, there was no difficulty at all in the interpretation of the provisions. The mere fact that a baseless claim was raised by some over-enthusiastic assessees who sought a double allowance or that such claim may perhaps have been accepted by some authorities is not sufficient to attribute any ambiguity or doubt as to the true scope of the provisions as they stood earlier..... ......A double deduction cannot be a matter of inference; it must be provided for in clear and express language regard being had to its unusual nature and its serious impact on the revenues of the State." (ix) It is not clear whether the assessee has claimed deduction u/s 24(b) of the Act on account of interest paid. 4.2.3 In view of above discussion, the panel is of the view that the assessee's claim in this regard, is not found correct and also the tenable. The assessee cannot claim for double deduction by claiming indexation of the interest paid. The AO is directed to verify from the records as to whether the assessee has claimed deduction u/s 24(b) of the Act on account of interest paid. However, the AO's action is upheld and the assessee's contention is rejected. The objection in this regard, is disposed of accordingly. 8 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur 4.3 Ground no. 3: This ground is related to issue relating to disallowing the expense incurred by the Assessee towards the settlement of claims against the property i.e. The Magnolias Flat has not been incurred on the capital asset. 4.3.1 Vide synopsis Para 6.3, the assessee has submitted that the property under consideration was subject matter of dispute earlier as before transfer of right in flat in favour of Ravinder Singh Deol, the Assessee has entered into the agreement to sell dated 23.10.2012 with Mr. Sunil Miglani. However, dispute arose between the parties to the agreement and which was settled vide settlement deed dated 22.09.2015 On settlement Assessee had to incur cost of Rs. 1.5 Crore. It is settled law that the said expenditure will also form the part of the cost of acquisition of capital assets or the cost of improvement thereto as contemplated u/s 4801) of the Act as without clearing the dispute on the title, the property could not be transferred with good title. 4.3.2 The AO vide order, Para 8 has merely stated-"...the above claim of the assessee is not found acceptable as I found that the aforesaid expense was not incurred on capital asset, therefore, the indexed cost of Rs. 82,67,717/- claimed by the assessed is hereby rejected." 4.3.3 The Panel has observed that the A has not recorded any reasons while rejecting the assessee's claim which is not justified. However, it will be prudent that the Assessing Officer record the reasons for this purpose and also discussed about the claim in terms of provisions construed in section 48(ii) of the IT Act. The AO is directed to do this exercise and pass a speaking order. The objection in this regard, is disposed of accordingly. 4.4 Ground no 4- This ground of objection is related issue of initiating penalty proceedings under section 270A of the Act. This ground is consequential in nature and premature. Hence, the objection in this regard is rejected. 5. Directions under section 144C of the Income Tax Act: The Assessing Officer is directed to complete the assessment as per the above directions of the Dispute Resolution Panel. The Assessing Officer shall place a copy of these directions as annexure to the final order, to be read as a part of the order. While passing the final order, the Assessing Officer shall incorporate the reasons given by the Dispute Resolution Panel in respect of various objections, at appropriate places. The Grounds of Objections are decided as above.” 8. Based on the directions and findings of DRP an assessment order was made under section 143(3) r.w.s.144C(13) on 21.07.2022 wherein the 9 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur ld. AO disallowed the indexed cost of interest expenses of Rs. 11,65,94,547/- on bank loan from CITI Bank holding that interest expenses incurred on the loan taken cannot be claimed while calculating capital gain income. The claim of expenses incurred for Rs. 1.50 crore [ ½ share of assessee being 75 lakh and indexed value of Rs. 82,67,717/-] being the amount paid on settlement of the dispute by the assessee and claimed accordingly as 50 % of the said amount as joint owner of the property was also disallowed by holding that the expenditure not incurred on the capital assets. 9. As the assessee did not find any favor even after the direction of the DRP the assessee has filed an appeal before this tribunal on the grounds as reiterated in para 4 above. Before us the ld. AR of the assessee submitted a brief of his contentions raised in support of his grounds which reads as under:- 1. There are two cases listed for hearing before your good office, Arun Nagar and Nisha Nagar on 27.09.2022. The issue involved in both the cases are common. 2. The Assessee is Non-resident person, employed outside India since last several years. For the year under consideration the Assessee has filed return of income u/s 139(1) of the Act on 31.08.2019 at income of Rs. 25,61,200/-, which was subsequently revised on 30.11.2020 (PB No. 8). In the said return of income, the Assessee has declared long term capital loss of Rs. 16,01,462/- on the transfer of right in property in the project named “Premier Terraces” of Emaar and long term capital loss of Rs. 4,49,15,513/- on the transfer of right in 10 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur flat/property in the project named “The Magnolias” of DLF, which was jointly acquired by him along with his wife Mrs. Nisha Nagar. 3. That the case of the Assessee was selected for complete scrutiny under CASS after issuing notice u/s 143(2) of the Act dated 31.03.2021. Accordingly various notices were issued from time to time which was duly complied by the Assessee. Thereafter, without adverting to the various reply made by the Appellant draft assessment order was passed u/s 144C of the Act dated 30.09.2021. 4. In the said order, the Ld. AO has disallowed the indexed cost of interest expense of Rs. 11,65,94,547/- on bank loan from CITI Bank and indexed cost of expenses of Rs. 82,67,717/-incurred on settlement of the dispute with Mr. Sunil Miglani, without assigning any reasoning/basis for the said disallowance and rather has given one liner view and conclusion that interest expenses incurred of Rs. 11,65,94,547/1- on the loan taken cannot be claimed while calculating capital gain income. Further, as far as claim of expense incurred of Rs. 1.50 Crore (1/2 share of Assessee being Rs. 75 Lakh, indexed cost Rs. 82,67,717/-) on settlement of the dispute is concerned, the same were disallowed by the Ld. AO in the Draft Assessment Order on a view taken by Ld. AO that aforesaid expense has not been incurred on the capital assets. 5. Aggrieved by the said Draft Assessment Order the Appellant filed his detailed objection along with the prescribed Form No. 35A before the Ld. DRP-1 on 27.10.2021. 6. Thereafter, the Ld. DPR-1 vide its order dated 10.05.2022 issued directions on both issues as follows: • Ld. AO is directed to take a note that interest form part of the cost of capital asset. • Ld. AO need to check whether the Appellant has claimed double deduction u/s 24(b) of the Act as well under Section 48 of the Act. • Against the issue pertaining to the disallowance of settlement of dispute the Ld. AO was directed to discuss the claim of the Appellant as per the provision of Section 48(ii) of the Act. • However, in conclusion, the Ld. DRP-1, though recording findings in favour of the Assessee, dismissed the claim of the Assessee. (The relevant findings are available at Para No. 4.2.3 (Page No. 4-5 and Para No. 4.3.1 to 4.3.3 of Ld. DRP-1, Order at page no. 5-6 of said Order) 7. However, in utter contradictions to the directions issued by the Ld. DRP-1 the Ld. AO passed Impugned Order u/s 143(3) r.w.s 144C(13) of the Act dated 21.07.2022 which is not tenable on the grounds mentioned in appeal memo, against which contentions are given herein below. GROUND NO. 2: 11 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur Erred in denying the deduction of indexed cost of acquisition while disallowing interest expenditure claimed by the Appellant: 1. In this regard, it is submitted that the Ld. AO while making disallowance of Rs. 11,65,94,547/- has also disallowed the amount which is not attributable towards interest expenditure. 2. The Appellant for acquiring right in flat has availed loan from CITI bank for Rs. 5,84,90,000/-. For FY 2007-08 the interest expense incurred by the Appellant is Rs. 14,55,773/- only and not Rs. 7,83,85,106/- as assumed by the Ld. AO. The said facts are supported from the CITI Bank Statement and statement showing details of interest expense paid to CITI Bank (Refer Page no. 47 to 56 of Paper Book). 3. In this context, the relevant portion of the table is reproduced herein below for your goodself kind perusal: GROUND NO. 1: Order dated 21.07.2022 passed u/s 143(3) r.w.s 144C(13) of the Act following the directions of Dispute Resolution Panel is perverse, arbitrary, non-speaking and bad in law: A. Directions with respect to the Issue of Interest expense: 4. That in the directions issued by the Ld. DRP-1 vide its order dated 10.05.2022 wherein the Ld. DRP-1 itself acknowledge the fact that interest forms part of capital assets (Refer Sub Para No.(i) of Para No. 4.2.2of page no. 3 of the directions issued by Ld. DRP-1). However, in the sheer contradiction to the Sr. No Payment Date/Fin ancial Year Particulars Amount Total 50% of Total Cost Remarks for Verification 1 20.10.20 07 DLF Receipt 40,00,000.00 Citi Bank letter dated 02.02.2016 for Loan Account No. 122431 and DLF Receipt dated 23.10.2007 2 22.11.20 07 DLF Receipt 1,44,39,333 Citi Bank letter dated 02.02.2016 for Loan Account No. 122431 and DLF Receipt dated 22.11.2007 3 05.12.20 07 DLF Receipt 5,84,90,000. 00 Citi Bank Sanction Letter/ Loan Statement and DLF receipt Dated 05.12.2007 4 2007-08 Interest Paid to Citi Bank 14,55,773.00 7,83,85, 106.00 3,91,92,5 53.00 Interest Paid as per Citi Bank Statement 12 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur directions issued by the Ld. DRP-1, the Ld. AO vide order dated has disallowed the interest cost incurred by the Appellant on the impugned reason that the interest cost incurred by the Assessee in home loan taken cannot be considered as cost of acquisition. 5. Further, the Ld. AO himself has stated that the Appellant has not claimed any deduction u/s 24(b) of the Act, therefore, it is otherwise not a case of double deduction. Therefore, claim of interest expenditure of Rs. 3,96,65,214/- deserves to be allowed to Appellant. 6. Beside this it is apposite to highlight that the department in the case of the Assessee for AY 2012-13 vide order dated 11.02.2015 has itself contended that the interest cost is allowable in the case of capital asset. Relevant Para is reproduced herein below for your kind perusal: “The contention of the Ld.AR are carefully examined and are not found acceptable because, Interest expenses are not direct expenses as far as cost of stock in trade is concerned. What Ld. AR is contending can be true in the case of capital asset...” [Refer Page No.17 of assessment order dated 11.02.2015 for AY 2012-13] 7. Further the Hon’ble bench in the case of the Assessee for AY 2012-13 vide order dated 17.08.2022 in Appeal No. ITITA 04/JP/2018 has affirmed the fact that the interest cost forms part of the cost of acquisition of the capital asset. 8. Therefore, contrary stand is being taken by the department which is not justifiable and accordingly interest cost shall be allowed. 9. Thus, the order dated 21.07.2022 is not legally tenable as the same is passed without following the directions issued by the Hon’ble DRP-1 and against the well settled judicial principles. B. Directions with respect to the issue of disallowance of settlement of dispute 10. Further, as far as issue of disallowance of settlement of dispute for the effective transfer of right in flat is considered, it is submitted that the Appellant has incurred the expense of Rs. 82,67,717/- on settlement of dispute with Sunil Miglani. The fact that the said expense had been incurred on capital asset is evident from the settlement deed which has not been considered rather vague findings basis the same have been given in Impugned Order (Refer Page no. 74 to 79 of Paper Book). 11. The Ld.AO vide impugned order dated 21.07.2022 has rejected the genuine claim of the Appellant on the whimsical ground that whether the other party has paid taxes on the settlement amount or not. In this regard, it is submitted that whether the other party has paid taxes or no cannot form the basis for deciding 13 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur whether the Appellant has incurred the said expenditure on capital asset or not, Thus, rejection of claim made by the Appellant against the law is not justified. GROUND NO. 3 : Grossly erred in disallowing indexed cost of interest expenditure incurred on capital asset which is deductible u/s 48 of the Act: 12. In this regard it is humbly submitted before your goodself that it is settled law that, for the purpose of calculating capital gain income, expenditure incurred towards cost of acquisition of capital asset is allowable deduction and interest is the expense incurred in connection with the acquisition of the property under provision of Section 48 of the Act. The actions of the Ld. AO is in grave violation to the provision of Section 48 of the Act. 13. In support of the above, contention, the Appellant places reliance on the following judicial pronouncements which are as follows: • Commissioner of Income-tax v. Sri Hariram Hotels (P.) Ltd. [2010] 188 Taxman 170 (Karnataka) • Commissioner of Income-tax v. K. Raja Gopala Rao Taxman 465 (Delhi) [24.07.2000] • Commissioner of Income-tax v. Mithlesh Kumari [1973] 92 ITR 9 (Delhi) • INCOME-TAX OFFICER v. SMT. PUSHPABEN B. WADHWANI [1986] 16ITD704 (AHD.) • Addl. Commissioner of Income-tax v. K.S. Gupta [1979] 119ITR372 (Andhra Pradesh) • Ajmal Fragrances & Fashions (P.) Ltd. v. Assistant Commissioner of Income tax, Circle 13(1), Mumbai [2009] 34 SOT 57 (Mumbai) • Parwati Devi Totlani Vs. The ITO, Ward-7(2) MANU/IJ/0071/2020 [Kindly refer case compilation] 14. The principle laid down above have been accepted by the Ld. AO while passing the Assessment Order for AY2012-13 and also by the Ld. DRP-1 in Para No. 4.2.3 while relying upon judgment of ITAT Bangalore in case of (Captain B L Lingaraju vs. ACIT) in 2016. Kindly refer Page No.17 of assessment order dated 11.02.2015 for AY 2012-13 and Para No. 4.2.3 of Page No. 3 of the Ld. DRP order dated 10.05.2022. GROUND NO. 4: Arbitrarily disallowed the of claim of Settlement amount paid of Rs. 82,67,717/-: 15. That, the property under consideration was subject matter of dispute earlier, as before transfer of right in flat in favour of Ravinder Singh Deol, during the year under consideration, the Assessee has entered into the agreement to sell dated 23.10.2012 with Mr. Sunil Miglani. However, dispute arose between the parties to the agreement, and which was settled vide settlement deed dated 22.09.2015. 14 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur On settlement Assessee had to incur cost of Rs. 1.5 Crore. The said facts are established by settlement deed available at Page No. 74 to 70 of Paper Book. 16. In pursuance to the settlement deed for clearing the title in the property, in other words for removing of the obstruction before sale, the Assessee and his wife incurred Rs. 1,50,00,000/- towards the settlement of all claims of by Mr. Sunil Miglani. 17. It is settled law that the said expenditure will also form the part of the cost of acquisition of capital assets or the cost of improvement thereto as contemplated u/s 48(ii) of the Act as without clearing the dispute on the title, the property could not be transferred with good title. 18. In support of the above, contentions, the Appellant places reliance on the following judicial pronouncements which are as follows: • Kaushalya Devi vs. Commissioner of Income Tax [2018] 92 taxmann.com 335(Delhi) • N.Rajarajanv.Assistant Commissioner of Income Tax, Corporate Circle XIV, Chennai[2020] 120 taxmann.com 402 (Madras). • Satyabrata Dey Vs. Deputy Commissioner of Income-tax, Circle-33, Kolkata I.T.A No. 1112/Kol/2011. [Kindly refer case compilation] 19. In view of the fact and circumstance of the present case the Appellant respectfully prays before Hon’ble Income Tax Appellate Tribunal for issuing appropriate direction for deleting the addition made by the AO of Rs. 12,48,62,264/- made vide the Impugned order passed u/s 143(3) r.w.s 144C(13) of the Act and accordingly allow consequential relief including any other relief, which may be deemed fit.” 10. The ld. AR of the assessee submitted following judicial decisions in support of the grounds raised by him of various Hon’ble Courts and the gist of the same is submitted before us to drive home to the contentions raised by him which is summarized as under:- CASE COMPILATION S.N. Case Title Gist of case law Page No. INTREST COST IS PART OF COST OF ACQUISITION 15 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur 1. Commissioner of Income-tax v. Sri Hariram Hotels (P.) Ltd. [2010] 188 Taxman 170 (Karnataka) We are unable to agree with the arguments advanced by the learned Counsel for the revenue for the simple reason on facts that even the Commissioner of Income-tax (Appeals) has held that interest had accrued as on 31-3-2003 and therefore, the Tribunal is justified in granting the relief to the assessee since the property has been purchased out of the loan borrowed from the Directors and any interest paid thereon is to be included while calculating the cost of acquisition of the asset. Therefore, question No. 1 has to be answered against the revenue. [Para No.7] 1-2 2. Commissioner of Income-tax v. K. Raja Gopala Rao Taxman 465 (Delhi) [24.07.2000] The cost of acquisition to the assessee was not merely the amount that he had paid to the vendor but also the cost of the borrowing made by him for the purpose of paying the vendor and obtaining the sale deed. The fact that the mortgage was executed after the sale deed was obtained even though both the documents were signed and registered on the same day, did not render the mortgage and the borrowing made thereunder irrelevant to the task of determining the cost of acquisition. Without the money borrowed, the assessee would not have been in a position to buy the property. The purchase not having been made with his own funds, he was required to pay interest for the borrowed fund and secure the borrowing by creating a mortgage. Such mortgage could not have been created earlier as he had to first acquire title before encumbering the same. Payment of consideration for the sale indisputably having been made with the borrowed funds, the borrowing was directly related to the acquisition and, interest paid thereon would form part of the cost of acquisition. Therefore, the Tribunal was right in holding that the mortgage expenses incurred in connection with the acquisition of the property and the interest payable on the mortgaged amounts which had been utilised as part of the consideration, would form part of the cost of acquisition of the property for the purpose of computation of capital gains. 3-5 16 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur 3. Commissioner of Income-tax v. MithleshKumari [1973] 92 ITR 9 (Delhi) In the instant case, the assessee in order to purchase the land had not only to borrow the amount which was the consideration for the purchase of the land, but also had to pay interest on the amount borrowed by her. The amount of loan plus the interest paid by the assessee constituted the actual cost to the assessee of the land. The fact that the amount of loan was paid by the assessee to the vendor and the amount of interest was paid to a different person, namely, her mother-in-law, did not make any difference so far as the assessee was concerned in respect of the actual cost of the land to her. It would not also make any difference whether the interest was paid on the date of the purchase or whether it was paid subsequently. Therefore, the Tribunal was right in adding the interest amount towards the actual cost of the land. 6-11 4. INCOME-TAX OFFICER v. SMT. PUSHPABEN B. WADHWANI [1986] 16ITD704 (AHD.) In the present case, the ITO failed to appreciate the assessee's case in proper perspective vis-a-vis the definitions of 'cost of improvement' and 'cost of acquisition' contained in section 55(1)(b) and section 55(2), read with section 48(ii). The restriction about the disallowance of interest is in respect of 'cost of improvement' and not in respect of 'cost of acquisition'. Therefore, the assessee would be entitled to claim that the interest paid by her should be considered in determining the 'cost of acquisition' of the asset sold by her. But from the ITO's order it was not clear as to when the assessee acquired the flat in question and whether she was allowed deduction of interest payments in computing the income from the said flat under the head 'Income from house property' in earlier years. If that be so, then the interest paid on the loan could not be treated as part of 'the cost of acquisition'. However, if the assessee had not been allowed such deduction in earlier years, then in view of the decision in the case of CIT v. Maithreyi Pai [1985] 152 ITR 247(Kar.) the interest should form part of 'the cost of acquisition' of the asset sold by her. Since that aspect of the matter required investigation the matter was remanded to the ITO. 12-16 17 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur 5. Addl. Commissioner of Income- tax v. K.S. Gupta [1979] 119ITR372 (Andhra Pradesh) In order to find out what was the cost of acquisition to the assessee in respect of those plots, one had to take into account not only the original price paid by the assessee for these two plots of land, but also to include in that cost of acquisition the capitalised interest paid by him on the borrowings by him for paying the purchase price when he originally purchased the two plots. The basic principle, in cases of this kind, is to ascertain the actual cost of acquisition to the assessee, and, in arriving at the figure of actual cost of acquisition the interest which has been capitalised must be included; otherwise, from the commercial point of view and the principles of accountancy, one cannot get a correct idea of the cost of acquisition. The Tribunal, in the instant case, had, therefore, applied the correct principle and come to the correct conclusion. Under these circumstances, it was obvious that the amount of the interest was part of the actual cost of acquisition for purposes of determining the capital gains. 17-21 6. Ajmal Fragrances & Fashions (P.) Ltd.* v. Assistant Commissioner of Income tax, Circle 13(1), Mumbai [2009] 34 SOT 57 (Mumbai) The above contention raised by the assessee was correct. In the instant case, it was clear that interest had to be paid on two counts, viz. (i) the interest which was embedded in the instalments; and (ii) the interest paid on the delayed payment of instalments. The said interest would constitute cost of acquisition and, therefore, it was viewed that the Commissioner (Appeals) had correctly directed the Assessing Officer to allow the interest portion and there was nothing wrong in the order of the Commissioner (Appeals) directing the Assessing Officer to recompute the capital gains after capitalizing interest paid on delayed payment of instalments. [Para 5] 22-31 Payment for the settlement of dispute is also cost of acquisition 7. N.Rajarajan v. Assistant Commissioner of Income Tax, Corporate Circle XIV, Chennai [2020] 120 taxmann.com 402 (Ma dras) 17. Therefore, while there is no doubt that the said contribution of the Assessee to the extent of the land settled in his favour would be part of cost of acquisition or cost of improvement of the asset acquired by him as per Section 48 and Section 55 of the Act, the computation of the same deserves to be gone by the Tribunal, being a fact finding body, to find out whether the said sum of Rs. 1,06,76,905/- vide the Table quoted above is correct amount or not and whether the advance of Rs. 4 Crores received from the Purchaser M/s. Martin Group on 19-8-2009 vide Demand Draft payable to ASREC (India) Limited is correct fact or not. 32-47 18 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur 8. Satyabrata Dey Vs. Deputy Commissioner of Income-tax, Circle-33, Kolkata I.T.A No. 1112/Kol/2011 From the above proposition of law laid down by Hon’ble Supreme Court and considering the facts of the present case, we are of the view that where the title is defective, incomplete or imperfect, the cost of making the title complete and perfect can be treated as the ‘cost of acquisition’ falling u/s. 48 of the Act. In such circumstances, we allow the claim of the assessee as deductible u/s. 48 of the Act. We order accordingly. [Para 8] 48-56 INTREST COST IS PART OF COST OF ACQUISITION 9. Parwati Devi Totlani Vs. The ITO, Ward-7(2) MANU/IJ/0071/2020 12. We therefore find that there is a consistent view among various Hon'ble High Courts and which has been consistently followed by the various Benches of the Tribunal that the assessee is entitled to include interest as part of the cost of the assets while computing the capital gains U/s. 48 of the Act. In the absence of any contrary authority brought to our notice, the Assessing Officer is directed to allow the interest expenses of Rs. 3,93,898/- paid to LIC Housing Finance Ltd. subject to appropriate indexation while computing capital gains u/s. 48 of the Act. In the result, the appeal of the assessee is allowed. [Para No.12] 57-61 11. Au contraire, the ld. DR appearing on behalf of the revenue relying on the provisions of section 48 r.w.s. 55 submitted that both claims made by the assessee is not in accordance with the provision of the law and same is not within the meaning of cost of any improvement or acquisition. Moreover, the housing loan interest is deductible u/s. 24(b) of the Act is allowable year to year and assessee cannot claim interest as part of cost of improvement or acquisition. The decision relied upon by the ld. AR of the assessee are distinguishable on facts. The fact that the assessee has received a sum of Rs. 2 cr from where the dispute is arises is not appearing from the records 19 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur and assessee has not produced any evidence on it specifying that in fact, he has received any money from Mr. Sunil Miglani so as to confirm the averments of the assessee. Based on these arguments the ld. DR relied upon the findings of the ld. AO made in the order under challenge. The ld. DR also relied upon the following judicial decisions. Compilation of Case Law(s) Index S. No. Case law Gist of the decision 1 [2014] 124 taxmann.com 442 (Madras) Hon’ble High Court of Madras, Smt. T.A.H. Zubaida Ummal v/s Income Tax Officer Ward-1 (1), Nagapattivam, December 21, 2020 Where property was mortgaged by assessee after he had acquired property, amount paid by assessee to clear mortgage prior to transfer of said property would not entitle him to claim same as deduction under section 48. 2 [1997] 93 taxman 389 (SC) Hon’ble Supreme Court of India, V.S.M.R Jagadischandran v/s Commissioner of Income-tax, July 9, 1997 “Section 48, read with section 256(2), of the Income-tax Act, 1961- Capital gains- computation of –Assessment year 1975-76 – whether in case where property was not mortgaged by previous owner but by assessee himself, then amount paid to discharge mortgage debts could not be treated as cost of acquisition so as to allow same as deduction-Held, yes.” 12. In the rejoinder the ld. AR of the assessee submitted the fact that the money has been received from Mr. Sunil Miglani by an account payee cheque and is duly reflected in the bank statement filed by the assessee and this receipt recorded in the normal bank account cannot be disputed at this stage. As regards the cost of interest claimed the ld. AR of the 20 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur assessee submitted that when the assessee purchased the property under construction and the cost including the interest of construction period by the assessee was capitalized and thus, interest is not claimed on year to year. This important fact is not denied or controverted. Not only that the ld. AO in the case of the assessee himself taken a view in the assessment proceeding for A.Y. 2012-13 the same is extracted here in below:- “The contentions of the Ld AR are carefully examined and are not found acceptable because, Interest expenses are not direct expenses as far as cost of stock in trade is concerned. What Ld AR is contending can be true in the case of capital asset. But if the income of assessee is treated as business income then the flats held by the assessee come under the category of stock in trade. As per Accounting Standard-2, the interest relatable to purchase of stock in trade cannot be included in the cost of stock. Further the interest expenses are indirect expenses which are debited in the profit and loss account. Interest is never clubbed to the cost of stock in trade. The assessee has never claimed any interest expense in the previous years and therefore the interest from F.Y 2007- 08 cannot be allowed as the assessee himself has not claimed it. Interest expenses of the current year are therefore allowed in the computation.” Based on the above the ld. AR of the assessee submitted that the view taken by the ld. AO is contradictory and therefore, the claim of the interest which is claimed as cost of improvement is in accordance with the law and is also supported by the various judicial decisions relied upon. 13. We have considered the rival contention and perused the orders of the lower authorities and the material available on record, arguments 21 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur advanced by both the parties and also gone through the judicial decision relied upon by both the parties. It is not disputed that the assessee has invested in the flats, the said flat was under construction and for making this investment he has availed the loan. We are of the considered view based on the arguments and judicial precedent cited before us that the interest expenditure incurred by the assessee on during the period where the property was under construction interest paid by the assessee is allowable as part of cost of acquisition considering the various judgement cited before us. Whereas the decision relied upon by the ld. DR are related the interest incurred after the property acquired and interest on that mortgage loan and interest thereon, whereas in this case the interest was paid for the period the property was under construction. Being, consistent on the finding of this coordinate bench decision in the case of Parwati Deve Tolani Vs. ITO in ITA no. 120/JPR/2019 where in the bench has taken a view that assessee is entitled to include interest as part of the cost of the assets where it is directly related to the acquisition of that particular asset. The relied upon finding in this case is reiterated as under: “11. We have heard the rival contentions and perused the material available on record. The Coordinate Bench in case of Gayatri Maheshwari vs. ITO (supra) has considered the decision of Hon'ble Delhi High Court in case of CIT vs. Mithilesh Kumari MANU/DE/0221/1973: (1973) 92 ITR 9 and also the decision of Hon'ble Karnataka High Court in case of CIT vs. Shri Hariram 22 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur Hotels (Purchase) Ltd. MANU/KA/0668/2009 (2010) 188 taxman 170 (Kar) and has held as under: "9. We have perused the case records, analysed the facts and circumstances of the case and considered the judicial pronouncements, which was placed before us. In the case of CIT Vs. Mithilesh Kumari (supra), the Hon'ble High Court has held as under: - "(13) We are in respectful agreement with the observations of the Calcutta and the Bombay High Court in the decisions referred to above. In the present case, we find that the assessed in order to purchase the land had not only to borrow the amount of Rs. 95,000.00 which was the consideration for the purchase of the land but also had to pay interest of Rs. 16, 878.00 on the amount borrowed by her. The amount of Rs. 95,000.00 plus the interest paid by the assessed constitutes the actual cost to the assessed of the land. The fact that the amount of Rs. 95,000.00 was paid by the assessed to the vendor and the amount of interest of Rs. 16,878.00 was paid to a different person, namely, her mother-in-law, does not make any difference so far as the assessed is concerned in respect of the actual cost of the land to her. It will not also make any difference whether the interest was paid on the date of the purchase or whether it is paid subsequently. To exclude the interest amount from the actual cost of the assets would lead to anomalous results. Supposing she had purchased the land for Rs. 1,00,000.00 by raising a loan of that amount and had paid interest of Rs. 20,000.00 on the said loan and had sold the land for Rs. 1,20,000.00. It would be unreasonable to hold under such circumstances by excluding the interest amount from the actual cost of the land that she had made a capital gain of Rs. 20,000.00 when, as a matter of fact, she had not made any profit at all by the transaction. Applying the said observations of the Calcutta and the Bombay High Courts to the present case, we hold that the Tribunal was right in adding the interest amount of Rs. 16,878.00 towards the actual cost of the land." In the case of CIT Vs. Sri Hariram Hotels (Purchase) Ltd. MANU/KA/0668/2009: (2010) 188 Taxman 170 (Kar), the Hon'ble Karnataka High Court has held as under: 23 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur "7. We are unable to agree with the arguments advanced by the learned counsel for the revenue for the simple reason on facts that even the Commissioner of Income-tax (Appeals) has held that interest had accrued as on 31/3/2003 and therefore, the Tribunal is justified int granting the relief to the assessee since the property has been purchased out of the loan borrowed from the Directors and any interest paid thereon is to be included while calculating the cost of acquisition of the asset. Therefore, question No. 1 has to be answered against the revenue." In the case of ACIT Vs C. Ramabrahmam, the ITAT Chennai Bench 'C' in ITA No. 943/Mds/2012 has held that the assessee had purchased house property, availing loan. The house property was subsequently sold and assessee included interest paid on housing loan while computing capital gains u/s. 48. The Assessing Officer was of opinion that since interest in question on housing loan, had already been claimed as deduction u/s. 24(b), the same could not be taken into consideration for computation u/s. 48 and interest amount was added to income of assessee. The CIT(A) reversed the findings of A and held deduction u/s. 24(b) and computation of capital gains u/s. 48 were altogether covered by different heads of income i.e., income from 'house property' and 'capital gains. None of them excludes operative of the other. The interest in question was indeed expenditure in acquiring asset. Since both provisions were altogether different, assessee was entitled to include interest paid on housing loan for computation of capital gains u/s. 48 despite the fact that same had been claimed u/s. 24(b) while computing income from house property. The revenue's appeal was dismissed by the ITAT, Chennai Bench and the order of the ld. CIT(A) was upheld. From these judicial pronouncements, it is very much clear that if the property is purchased from borrowed funds then consideration for the purchased amount, the interest on borrowed fund also has to be paid. The amount of interest paid by the assessee constitutes the actual cost to the assessee for that property. To exclude the interest amount from the actual cost of the assets/property would lead anomalous result. The interest amount should be definitely added to the actual cost of the property. 24 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur Respectfully following these legal propositions and on basis of our observations as held herein, we reverse the findings of the Id. CIT(A) and hold that the interst paid to bank for acquiring capital asset would be eligible as part of cost of acquisition. We hold accordingly. The grounds No. 1 to 4 of the assessee’s appeal are allowed.” 12. We therefore find that there is a consistent view among various Hon'ble High Courts and which has been consistently followed by the various Benches of the Tribunal that the assessee is entitled to include interest as part of the cost of the assets while computing the capital gains U/s. 48 of the Act. In the absence of any contrary authority brought to our notice, the Assessing Officer is directed to allow the interest expenses of Rs. 3,93,898/- paid to LIC Housing Finance Ltd. subject to appropriate indexation while computing capital gains u/s. 48 of the Act. But from the assessing officer’s order for assessment year 2012-13 as submitted by the ld. AR the bench noted as under:- “The contentions of the Ld AR are carefully examined and are not found acceptable because, Interest expenses are not direct expenses as far as cost of stock in trade is concerned. What Ld AR is contending can be true in the case of capital asset. But if the income of assessee is treated as business income then the flats held by the assessee come under the category of stock in trade. As per Accounting Standard-2, the interest relatable to purchase of stock in trade cannot be included in the cost of stock. Further the interest expenses are indirect expenses which are debited in the profit and loss account. Interest is never clubbed to the cost of stock in trade. The assessee has never claimed any interest expense in the previous years and therefore the interest from F.Y 2007-08 cannot be allowed as the assessee himself has not claimed it. Interest expenses of the current year are therefore allowed in the computation.” Thus, it is not clear that the computation of interest claimed by the assessee as cost of improvement in the year under consideration that there exists claim of interest from 2007-08 and in the assessment order for A. Y. 2012-13 as submitted by the assessee it is evident that interest expenses of 25 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur that year was allowed in the computation as observed by the assessing officer. On this issue neither assessee nor the ld. DR has placed before us any factual aspect as to decide as to whether this interest is included in this cost of improvement claimed or not? whether the matter for that year is decided and relevant part of interest in fact allowed or not? Thus, it is not clear as to whether the interest claimed by the assessee is claimed twice in the A. Y. 2012-13 and in the others year or not is not clear from the arguments and working submitted by the assessee. In fact, in the working submitted by the assessee as extracted as Annexure A it is clear that the interest for F. Y. 2011-12 [ relevant to assessment year 2012-13] is claimed by the assessee in the cost of improvement. Thus, it is not clear as to whether the assessee was allowed any part of the interest claimed as cost of improvement or not up to the date of possession received by the assessee whether in fact it is allowed in any of the other years or not? This factual aspect needs to be verified from the records and therefore, we set a side this matter to the file of the assessing officer to consider the amount eligible to be claimed as cost of improvement of the interest on the property as claimed by the assessee. Thus, the ground no. 2 & 3 is allowed and the assessing officer is directed to decide the amount to the assessee as eligible as part of cost of acquisition of the property. 26 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur 27 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur 14. As regards the ground no. 4 raised by the assessee the fact is that the assessee has entered into the agreement to sell dated 23.10.2012 with Mr. Sunil Miglani. Subsequent to this agreement the dispute arose between the parties to the agreement dated 23.10.2012 entered between themselves. The dispute between the parties were settled between themselves vide settlement deed dated 22.09.2015. As per this settlement deed the assessee has to incur cost of Rs. 1.5 crore. The assessee has submitted the settlement deed in his paper book page 74 to 79. The assessee claimed that settlement amount to the extent of Rs. 75,00,000 being the amount of his share for expenses paid for settlement of dispute with Shri Sunil Miglani, the indexed value claimed was worked out at Rs. 82,67,717/-. The ld. AR of the assessee claimed that this expenditure of settlement of disputes paid by the assessee is also form part of the cost of acquisition in addition to the interest paid by him as without settling the dispute property could not be transferred with good tile of the property. In support of these contention he has relied upon the following judicial pronouncements: a) Kaushalya Devi vs. Commissioner of Income Tax [2018] 92 taxmann.com 335(Delhi) 28 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur b) N.Rajarajanv.Assistant Commissioner of Income Tax, Corporate Circle XIV, Chennai[2020] 120 taxmann.com 402 (Madras). c) Satyabrata Dey Vs. Deputy Commissioner of Income-tax, Circle-33, Kolkata I.T.A No. 1112/Kol/2011. 15. On the other hand, the ld. DR relied upon the order of the lower authorities and submitted that it is not clearly evident and disclosed by the assessee. In fact the money to the extent of Rs. 2 crore is received by the assessee or not. The ld. AO has recorded his finding that whether the money of Rs. 2 crore paid by the assessee to other party only to surrender all the rights on the property. It is not clear from the settlement agreement that whether the other party has made expenses of capital nature or not. Further, the assessee has not submitted any documentary evidence regarding expenses claimed. The assessee has also not submitted whether the other party has paid the taxes on the settlement amount paid by the assessee. The ld. DR further submitted that the decision relied upon by the assessee are different on distinguishable facts. 16. We have considered the rival contention and perused the orders of the lower authorities and the material available on record, arguments advanced by both the parties and also gone through the judicial decision 29 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur relied upon by both the parties. The assessee has claimed in 2012 he has entered into an agreement to sale, that agreement is not submitted by the assessee in his paper book but on going through the settlement deed it is observed that that in the settlement deed the reference of the amount Rs. 2 crore and Rs. 1.5 crore is recorded as under: “1. That the Parties have agreed that the Party of the First Part will pay Rs. 2,00,00,000/- (Rupees Two Crore only) i.e. amount received by it towards Earnest money against ATS and Rs. 1,50,00,000/- (Rupees One Crore Fifty Lakh Only) towards the settlement of all claims of Party of the Second Part of whatsoever kind including expenditures incurred by the Party of the Second Part in initiating construction/interior work at the said Property, and interest on amount paid towards Earnest Money for ATS. 2. That the Party of the First Part shall pay the aforesaid amount of Rs. Three Crore Fifty Lakh Only (“Settlement Amount”) in the manner mentioned herein below: S. No. Date Demand Draft No. In favour of Amount (In INR) 1 21.09.2015 007828 of HDFC Bank Sunil Miglani 1,75,00,000/- 2 21.09.2015 007827 of HDFC Bank Anju Miglani 1,25,00,000/- 3 21.09.2015 500259 of ICICI Bank Anju Miglani 50,00,000/- Total 3,50,00,000/- Ongoing through the above understanding it is evident the amount of Rs. 1.5 crore claimed by the assessee consists of settlement of all claims in the property including expenditure incurred on construction/interior work at the 30 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur said property and interest on the amount advanced. Thus, this claim of the assessee is divided into following parts; a) Settlement of the dispute b) Expenditure incurred on construction/interior c) Interest on the amount advanced On due consideration on the rival contentions and submission made before us we found that the assessee has not produced any breakup of the said expenditure as the same is divided into the parts as stated in the agreement. Thus, it would be interest of the justice to set a side this issue of allowability of the claim of the assessee paid by him to the extent of Rs. 1.5 crore to the file of the assessing officer, who will call for the details from the assessee or from the payee in accordance with the law and after allowing sufficient opportunity of being and may considered the cliam of the assessee in accordance with the law. Thus, the ground no. 4 raised by the assessee is allowed for statistical purpose. 17. Since, we have considered the grounds 2,3 & 4 on merits ground no 1 being technical and educative in nature does not require any adjudication. As the assessee has not alter or amended any ground therefore, ground no 7 raised by the assessee is considered as not pressed and the ground no. 5 31 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur & 6 are consequential in nature and does not require adjudication at this stage. 18. The fact of the case in ITA No. IT(IT)A No.17/JP/2022 is similar to the case in ITA No. IT(IT)A No.15/JP/2022 and we have heard both the parties and persuaded the materials available on record. The bench has noticed that the issues raised by the assessee in this appeal No. IT(IT)A No.17/JP/2022 is equally similar on set of facts and grounds with that of the case in IT(IT)A No.15/JP/2022. Therefore, it is not imperative to repeat the facts and various grounds raised by the assessee in ITA No. IT(IT)A No.15/JP/2022. Hence, the bench feels that the decision taken by us in ITA No. IT(IT)A No.17/JP/2022 for the Assessment Year 2019-20 shall apply mutatis mutandis in the ITA No. IT(IT)A No.15/JP/2022 for assessment year 2019-20. In the results appeal of the assessee in ITA No. IT(IT)A No.15/JP/2022 stands allowed for statistical purpose as per the detailed finding recorded by us in ITA No. IT(IT)A No.17/JP/2022 here in above. 19. In the result both the appeals filed by the assessee are allowed, for statistical purpose. 32 IT(IT)A Nos. 17 & 15/JP/2022 Sh. Arun Nagar vs. DCIT(IT), Jaipur Order pronounced in the open court on 11/11/2022. Sd/- Sd/- ¼ lanhi xkslkbZ ½ ¼ jkBkSM deys’k t;arHkkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 11/11/2022 *Ganesh Kumar vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Shri Arun Nagar, Jaipur Smt. Nisha Nagar, Jaipur 2. izR;FkhZ@ The Respondent- DCIT, Circle, International Taxation, Jaipur. 3. vk;djvk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZQkbZy@ Guard File (IT(IT)A Nos. 17 & 15/JP/2022) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar