2018 (12) TMI 1843 - AT - Income Tax

Disallowance of expenditure for providing modern kitchen in the flat as cost of acquisition - assessee, submitted that the cost of modern kitchen has to be considered as cost of asset, therefore, the CIT(Appeals) is not justified in confirming the order of the AO - HELD THAT - Both the authorities below rejected the claim of the assessee on the ground that there was no evidence available on record for providing modern kitchen. Even before this Tribunal, no evidence is produced for providing modern kitchen after purchase of flat. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. - Decided against assessee.

Summary

Issues involved:
1. Condonation of delay in filing the appeal by the Revenue.
2. Maintainability of the appeal based on the tax effect.
3. Disallowance of expenditure for providing a modern kitchen in the flat as a cost of acquisition.

Condonation of Delay:
The Revenue filed an appeal with a delay of 19 days, seeking condonation. The Tribunal considered the reasons for the delay and found a sufficient cause for not filing the appeal within the stipulated time. Consequently, the delay was condoned, and the appeal was admitted.

Maintainability of the Appeal:
During the hearing, the Departmental Representative acknowledged that the tax effect in the case was less than ?20 lakhs. The Tribunal noted that the circular issued by the CBDT set a monetary limit for filing appeals before the Tribunal. As the tax effect was below the specified limit, the Tribunal deemed the appeal not maintainable based on the circular.

Disallowance of Expenditure for Modern Kitchen:
The cross-objection by the assessee primarily contested the disallowance of expenditure for a modern kitchen in the flat as a cost of acquisition. The assessee argued that the modern kitchen should be considered a cost of the asset. However, both the assessing officer and the CIT(Appeals) rejected the claim due to the lack of evidence for the modern kitchen's provision. The Tribunal upheld the lower authorities' decision, emphasizing the absence of evidence even during the Tribunal proceedings, leading to the dismissal of both the Revenue's appeal and the assessee's cross-objection.

In conclusion, the Tribunal addressed the delay in filing the appeal by the Revenue, the maintainability of the appeal based on the tax effect, and the disallowance of expenditure for a modern kitchen as a cost of acquisition. The Tribunal condoned the delay, but found the appeal not maintainable due to the tax effect falling below the CBDT's specified limit. Additionally, the Tribunal upheld the decision to disallow the expenditure for the modern kitchen, as no evidence was presented to support the claim. Consequently, both the Revenue's appeal and the assessee's cross-objection were dismissed.