9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2007 (9) TMI 294 - AT - Income TaxIndexed cost of acquisition - Long-term capital gain from sale of immovable property - Disallowance u/s 48 - Expenses incurred on transfer of the asset. HELD THAT - We are in agreement with the contentions of the learned counsel for the assessee that the reference to the DVO can be made u/s 55A of the Act only when the AO is of the opinion that the value claimed by the assessee is less than its fair market value. In the case on hand the DVO valued the property at Rs. 6,06,046 which is less than the fair market value claimed by the assessee and the AO accepting the same proves that the AO referred it to the Valuation Officer as he was of the opinion that the assessee's claim was more than its fair market value. Therefore, we are satisfied that the ratio propounded in the case of Ms. Rubab M. Kazerani v. Jt. CIT 2004 (7) TMI 649 - ITAT MUMBAI is applicable to the case in hand. Respectfully following the decision, we dismiss this ground of appeal raised by the Revenue. Disallowance u/s 48 - Expenses incurred on transfer of the asset - HELD THAT - We find that the assessee's claim of incurring expenses for the transfer of the asset is accepted by the authorities below and the AO has allowed 50 per cent of expenses. The CIT(A) has restricted it to the actual payment made by the assessee. We find that the CIT(A) has considered the factual matrix of the case and also the bank account of the assessee to arrive at the figure of Rs. 10,70,000. It has also been observed that the expenses have been incurred out of the bank account of the assessee and out of the sale consideration received and that the other joint owners have not claimed any deduction on account of such expenditure over and above Rs. 10,70,000. Therefore, we do not see any reason to interfere with the order of the CIT(A) as the assessee has not been able to file any evidence before us either, in support of her claim for the balance of the expenditure. In the result, this ground of appeal of the assessee is rejected. Cross-objection is partly allowed.
Issues:
1. Discrepancy in indexed cost of acquisition calculation. 2. Validity of reference to District Valuation Officer (DVO) under section 55A. 3. Disallowance of expenses claimed by the assessee. Issue 1: Discrepancy in indexed cost of acquisition calculation: The Revenue filed an appeal against the order of the CIT(A) directing the AO to allow the indexed cost of acquisition at Rs. 37,98,219 instead of Rs. 24,60,546 calculated by the AO. The AO had referred to the DVO under section 55A of the IT Act to value the property for determining capital gains tax. The DVO valued the property at Rs. 6,06,046, leading to the AO determining the indexed cost of acquisition at Rs. 24,60,546. The CIT(A) directed the AO to adopt the cost of acquisition at Rs. 9,35,522 and the indexed cost of acquisition at Rs. 37,98,219. The Tribunal dismissed the Revenue's appeal, stating that the reference to the DVO can be made only if the AO believes the value claimed by the assessee is less than its fair market value, which was not the case here. The Tribunal upheld the CIT(A)'s decision. Issue 2: Validity of reference to District Valuation Officer (DVO) under section 55A: The assessee raised a cross-objection challenging the validity of the reference to the DVO under section 55A. The Tribunal found the reference invalid based on the previous decision and directed the AO to adopt the cost of acquisition as claimed by the assessee. The Tribunal allowed the cross-objection on this ground. Issue 3: Disallowance of expenses claimed by the assessee: The assessee claimed expenses of Rs. 15,40,000 incurred in connection with the transfer of a property. The AO disallowed 50% of the expenses, stating that the expenses should be shared proportionately among co-owners. The CIT(A) restricted the disallowance to Rs. 10,70,000. The Tribunal upheld the CIT(A)'s decision, noting that the expenses were incurred out of the bank account of the assessee and the joint owners did not claim any deduction beyond Rs. 10,70,000. The Tribunal found no reason to interfere with the CIT(A)'s order, rejecting the ground of appeal raised by the assessee. In conclusion, the Appellate Tribunal ITAT BOMBAY-K addressed the discrepancies in the indexed cost of acquisition calculation, the validity of the reference to the District Valuation Officer under section 55A, and the disallowance of expenses claimed by the assessee. The Tribunal dismissed the Revenue's appeal regarding the indexed cost of acquisition, allowed the cross-objection on the validity of the DVO reference, and upheld the CIT(A)'s decision on the disallowance of expenses.
|
