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TMI Blog2010 (8) TMI 820X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 1995-96 in which the said flat was allotted by the DLF Universal Ltd. to the appellant vide sale agreement dt. 27th Sept., 1995; and b)the financial years 1995-96, 1996-97, 1997-98, 1999-2000 and 2001-02 in which the payments of instalments of the cost of the flat along with interest and other payments were made to builder DLF Universal Ltd. by the appellant and the total payment of the flat was Rs. 55,81,062; ii)by considering only the sum of Rs. 45,51,720 as cost of acquisition of the said flat and in not considering the following amounts for the purpose : a)interest of Rs. 8,67,048 paid to DLF Universal Ltd. by the appellant on loan taken by him for acquiring the said flat, and b)fire fighting charges (Rs. 34,916), generator charges (Rs. 46,941) and processing fee and miscellaneous charges (Rs. 80,437) paid to DLF Universal Ltd. in connection with acquisition of the said flat. 2. The assessee sold a flat No. F-011, Richmond Park, DLF City Phase IV, Gurgaon vide sale deed dt. 30th Nov., 2006 for a sum o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered to be the cost of acquisition of the property and the amount incurred on the stamp duty of Rs. 5,05,752 was not considered as cost which sum was stated in the purchase deed itself. Thirdly, the assessee objected to the index factor applied by the AO at 497 which, according to the assessee, should have been 519 being financial year 1996-97 in which the property was sold. Fourthly, the assessee objected to the computation of AO for application of s. 50C. 6. Additional grounds were also raised before the CIT(A) in which the assessee claimed that interest paid by the assessee amounting to Rs. 8,67,048 on the purchase price of flat which was paid in instalments over the period of about 5 years should also be considered to be cost. Second additional ground was in respect of claim of other charges as cost being (i) fire fighting charges -Rs. 34,916; (ii) generator charges Rs. 46,941; and (iii) processing fee and miscellaneous charges Rs. 80,437. The cost was described in the table filed before the CIT(A) which is as under : Sl. No. Particulars F.Y. 1995-96 F.Y. 1996-97 F.Y. 1997-98 F.Y. 1999-02 F.Y. 2001-02 Total 1. Purchase price as per conveyance deed 12,72,702 74, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see from financial year 1995-96 does not arise. Distinguishing the cases relied upon by learned Authorised Representative, it is observed by learned CIT(A) that the asset was in existence and possession had taken place at the time of agreement, thus, those cases were distinguishable. Thus, the reason assigned by the CIT(A) to give the cost indexation benefit from 2001-02 is based on the fact that the asset did not exist in financial year 1995-96 from where the assessee was claiming the cost indexation benefit. 11. So far as it relates to additional grounds raised by the assessee, learned CIT(A), referring to the decision of Karnataka High Court in the case of CIT vs. Maithreyi Pai (1984) 43 CTR (Kar) 88 : (1985) 152 ITR 247 (Kar) has denied the claim of interest to the assessee from being considered as cost of acquisition. Similarly, the other charges, namely, fire fighting charges, generator charges and processing fee and miscellaneous charges were not held to be allowable as cost by the CIT(A) on the ground that those were not substantiated by any evidence of payment and they being part of the cost of acquisition and in this manner, learned CIT(A) has rejected the additional gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT v. K.S. Gupta [1979] 119 ITR 372 (AP); (iv) SAS Hotel Ltd. v. ITO [1983] 4 ITD 297 (Mad.); (v) CIT v. Sri Hariram Hotels (P) Ltd. [2010] 34 DTR 162 (Kar.). 16. He submitted that reliance by the CIT(A) on the decision in the case of CIT v. Maithreyi Pai (supra) is wrong as in the said case the assessee had claimed the expenditure against other income and, thus, it was held by the Court that no double deduction was permissible and the matter was remanded for verification. He submitted that in the present case no such deduction was claimed and it is also not the case of the Revenue that the assessee has claimed double deduction. He referred to the decision of Karnataka High Court in the case of CIT v. Sri Hariram Hotels (P) Ltd. (supra) to contend that such interest is an allowable deduction. 17. Coming to the second issue of date from which the indexation benefit is to be allowed, it was submitted by learned Authorised Representative that the flat was allotted to the assessee vide allotment letter dt. 2nd Aug., 1995 and agreement was executed on 27th Sept., 1995. He drew our attention towards copy of agreement which is placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal in the case of Asstt. CIT v. Credit Rating Information Services of India Ltd. (ITA No. 9396/Mum/2004, order dt. 30th April, 2008). Thus, he submitted that the orders of AO and CIT(A) on this issue should be reversed and the AO may be directed to give the indexation benefit from the date of allotment. Thus, it was submitted by the learned Authorised Representative that the appeal of the assessee should be allowed. 20. On the other hand, it was submitted by learned Departmental Representative that the other cost claimed by the assessee to the tune of Rs. 10,29,342 has rightly been disallowed by the AO and CIT(A). He submitted that these items cannot be considered to be cost as the same were not incurred on the construction, etc. Similarly, he argued that for interest also learned CIT(A) has rightly rejected the claim as it is not clear that whether the assessee has claimed the said deduction under any other section and if it is so, the interest cannot be allowed to him again in these proceedings. 21. On the issue of indexation, relying upon the orders of the AO and CIT(A) he submitted that the asset came into existence only on the date of conveyance deed and, therefore, lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um paid for processing fee and other miscellaneous charges is Rs. 80,437. The assessee has also enclosed the receipts issued by the builder in respect of each item at pp. 18 to 38 of the paper book. Each of the payments made by the assessee is in respect of flat purchased by him and is issued by DLF Universal Ltd. It is not the case of the Revenue that the assessee did not make any extra payment apart from what was mentioned in the title deed as sale consideration. It is a known fact that the builder and developer of a property would charge from the assessee various charges which are as per the agreement entered into by the assessee for allotment of a particular property. 25. According to the scheme of capital gain, as per s. 48, while computing the capital gain, the assessee is entitled to get deduction from the sale value of the asset liable for capital gain, the amount of cost of acquisition of asset and the cost of any improvement thereon. Without making the payment of the amounts to the builder the assessee could not have obtained the conveyance deed. Therefore, we are of the opinion that the AO is wrong in taking the cost of acquisition only as stated in the conveyance deed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i)any stock-in-trade, consumable stores or raw materials held for the purposes of his business or profession; (ii)personal effects, that is to say, movable property (including wearing apparel and furniture) held for personal use by the assessee or any member of his family dependent on him, but excludes- (a)jewellery; (b)archaeological collections; (c)drawings; (d)paintings; (e)sculptures; or (f)any work of article." 29. According to the aforementioned definition, capital asset means property of any kind held by an assessee whether or not connected with the business or profession and it excludes certain items which while considering the facts of the present case are not relevant. Therefore, it has to be seen that whether by entering into an agreement vide which the assessee was allotted a particular flat by allotment letter whether the assessee has held any asset or not. By entering into an agreement to allot a flat, the assessee has identified a particular property which he i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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