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2022 (9) TMI 291 - AT - Income TaxDeduction u/s 54F - assessee had computed the LTCG on sale of the property - Expenditure incurred on sale - HELD THAT - We concur with the claim of the AR that now when it is proved beyond doubt that the expenditure involved towards purchase of stamp duty papers and registration expenses had been incurred by the assessee i.e. the seller, therefore, the lower authorities had grossly erred in declining her aforesaid claim for deduction of the said expenses. We, thus, in terms of our aforesaid observations allow the assessee s claim for deduction of expenditure incurred towards stamp duty expenses - Although we have observed that the assessee s claim for deduction of registration expenses is also to be allowed, however, in the absence of the requisite details before us we restore the issue to the file of the A.O with a direction to him to allow the same after making necessary verifications. Cost of Transfer - Admittedly, it is a matter of fact borne from record that the respective payments to the aforementioned persons have been made through banking channel. However, as observed by the A.O, and rightly so, we too are unable to comprehend as to why services of four persons would have been required to facilitate transfer of the property in question by the assessee. Although the confirmations of the aforementioned persons had been made available on record but the same does not inspire much of confidence. As is discernible from the aforesaid stereotype confirmations, it transpires that the same have been prepared by the assessee and had simply been signed by the persons concerned without mentioning a word about the services which were rendered by them as regards the sale transaction under consideration. We though are not oblivious of the fact that the payments to the aforementioned persons have been made through banking channel, however, the said fact on a standalone basis would not irrefutably substantiate the authenticity of the transaction under consideration. Apart from that the fact that the payments have been made to the aforementioned persons on 20.07.2011 i.e. much prior to 6 months from the date of execution of the sale transaction on 31.03.2012 also raises serious doubts as regards the veracity of the aforesaid claim of the assessee. Considering the aforesaid facts a/w the fact that the department have not carried the aforesaid issue any further in appeal before us, we finding no merit in the claim of the assessee for allowing her claim of deduction of the balance amount of commission/brokerage expenses reject the same and uphold the order of the CIT(Appeals) to the said extent. Claim of deduction u/s.54F - We are of the considered view that the assessee s claim for deduction u/s.54F w.r.t investment made towards furnishing/additions/alteration of the new residential house for rendering the same habitable is in order and as per mandate of law. At the same time, we may herein observe that as the aforesaid claim of the assessee was principally rejected by the AO, therefore, he had no occasion to verify the genuineness and authenticity of the claim of expenditure that was incurred by the assessee. We, thus, in terms of our aforesaid observations though principally concur with the claim of the Ld. AR that that the expenditure incurred by her after purchase of the house for rendering it habitable would be considered as having been incurred for purchase of the said house and would be eligible for deduction u/s 54F, but restore the same to the file of the A.O for the limited purpose of verifying the veracity of the aforesaid claim of the assessee and limit her said claim of deduction to the extent the expenditure in question is incurred for rendering the new residential house habitable. Accordingly, the Ground of appeal No.2 is partly allowed for statistical purposes in terms of our aforesaid observations. Appeal of the assessee is partly allowed.
Issues Involved:
1. Legality of the CIT(A)'s order. 2. Sustaining addition on account of Long Term Capital Gains (LTCG) under Section 54F. 3. Excessiveness of the addition. 4. Liability to interest under Section 234C. 5. Other reliefs/deductions. Detailed Analysis: 1. Legality of the CIT(A)'s Order: The assessee contested the legality of the CIT(A)'s order, claiming it was "bad in law as well as on facts." The Tribunal did not provide a separate detailed analysis on this issue, as it was inherently addressed through the discussion of specific grounds of appeal. 2. Sustaining Addition on Account of Long Term Capital Gains (LTCG) under Section 54F: The assessee had disclosed LTCG of Rs. 1,54,45,297/- from the sale of land and claimed various deductions. The AO disallowed several claims due to lack of substantiation, including brokerage expenses and cost of improvement. The CIT(A) partially upheld the AO's disallowances but allowed some deductions after verification. A. Expenditure Incurred on Sale: The Tribunal allowed the assessee's claim for deduction of stamp duty expenses of Rs. 16,40,530/- incurred on the sale of the property, which was initially disallowed by the AO and CIT(A). The Tribunal restored the issue of registration expenses to the AO for verification. B. Cost of Transfer: The Tribunal upheld the CIT(A)'s decision to restrict the deduction of brokerage expenses to Rs. 3 lakhs out of Rs. 11 lakhs claimed by the assessee, due to lack of convincing evidence and the improbability of requiring four brokers for a single transaction. C. Cost of Improvement: The assessee's claim for deduction of certain expenses was not pressed, and the Tribunal acknowledged that the CIT(A) had already allowed the boundary wall expenses of Rs. 1,50,000/-. D. Claim of Deduction under Section 54F: The Tribunal analyzed the assessee's claim for deduction under Section 54F, focusing on: - The utilization of the sale consideration before the due date of filing the return under Section 139(4). - The eligibility of expenses incurred for rendering the new residential house habitable. The Tribunal held that the assessee's claim for deduction under Section 54F was valid, as the investment was made before the due date of filing the return under Section 139(4). The Tribunal cited judicial precedents supporting the interpretation that the "date of furnishing the return of income under Section 139" includes the extended period under Section 139(4). 3. Excessiveness of the Addition: The Tribunal addressed the excessiveness of the addition by partially allowing the assessee's claims and restoring some issues to the AO for verification. The Tribunal's detailed analysis and partial relief granted indicate a balanced approach to the issue of excessiveness. 4. Liability to Interest under Section 234C: The assessee denied liability to interest under Section 234C, but the Tribunal did not provide a separate detailed analysis on this issue. It appears to have been implicitly addressed through the overall assessment and adjustments made. 5. Other Reliefs/Deductions: The Tribunal dismissed the general grounds of appeal (1, 3 to 6) as not pressed, indicating that the primary focus was on the specific issues related to LTCG and Section 54F deductions. Conclusion: The Tribunal's order resulted in partial relief for the assessee by allowing certain deductions, restoring some issues for verification, and upholding the CIT(A)'s partial disallowances. The detailed analysis of each issue reflects a thorough examination of the facts, adherence to legal provisions, and consideration of judicial precedents. The appeal was partly allowed, providing a balanced resolution to the disputed matters.
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