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TMI Blog2016 (8) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... income of Rs. 1,02,16,180/-. During the year under consideration, the assessee has sold a property along with her brother and sister and the share of each co-owner is 1/3rd. The assessee, while calculating her share of capital gain arises on sale of said property, claimed an expenditure of Rs. 8,50,000/- towards travelling in connection with the said transaction, under section 48(i) of the IT Act. The AO asked the assessee to furnish justification regarding claim of travelling expenses against capital gain. In compliance, the assessee submitted her reply which was considered by the AO but he could not found it acceptable. The AO observed that in various judicial decisions it has been held that travel expenditure is not allowable expenditure in connection with transfer of property. In support, he placed reliance on the cases of B.N. Pinto vs. CIT (1974) 96 ITR 306 (Mys.) and Sah Roop Narain vs. CIT (1987) 63 CTR (Raj.) 362. In view of the above, the AO disallowed the claim of the assessee and made the addition of Rs. 8,50,000/- to the total income of the assessee. 3. Being aggrieved by the order of AO, the assessee carried the matter before ld. CIT (A) who confirmed the action of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions, which were very well filed before him with full details and supporting. It is evident from the fact that while discussing the said reply in para 2.4 of his order, he had not discussed said part of the submission and neither rejected the evidence and submissions made by the assessee in this regard anywhere in his order. 4.1 The ld. A/R further submitted that the order of ld. CIT (A) is based on certain suspicion, surmises, conjectures and presumptions. The ld. CIT (A) has doubted the status of assessee as NRI. In this regard he submitted that it is an admitted fact that Income tax return has been filed by the assessee declaring her residential status as Non-Resident India, which has neither doubted by the AO nor the ld. CIT (A) herself. Therefore, to that extent observations of ld. CIT (A) is contradictory. 4.2 The ld. A/R further submitted that the property under consideration is co-owned and one of the co-owners is Appellant. A co-owner is having his/her economic interest in the property to the extent of his/her share. In this materialistic world, it is unreasonable to expect that the revenue will be shared equally, whereas efforts of the different co-owner would be uneq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tterly failed to appreciate the facts that they have at one hand disallowed the entire travelling expenditure, which includes for meeting, executing MOU, Conveyance Deed, Sale Deed, etc. on the other hand, they have not denied the requirements of the presence of the Appellant to sign different documents executed on different dates and for such purpose, necessity to come from Japan to India. Under the facts even if for sake of arguments the doubts of the CIT(A) considered correct, the entire expenditure cannot be disallowed. 4.5 LR AR further submitted that the Appellant under consideration is living in Japan without her presence in India, none of the events of the transaction under consideration could have been completed. However, as far as execution of MOU, Conveyance Deed, Sale Deed, Affidavit and other documents executed in relation to said transactions. Her presence was must or forceful to complete the said transaction. This part of the fact of the instant case has neither been addressed by Ld. AO or by Ld. CIT(A). This fact itself at prima-facie establishes that to complete the transaction under consideration, her travelling from Japan to India was necessary and was in connec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and could not be accepted. The AAC as well as the Tribunal upheld order of the ITO. On reference, it was held that: "The breakup of the amount given by the assessee itself implied that the amount was part of the consideration for the release, though she tried to apportion a part of the total consideration as representing lawyer's fees, etc. It was not claimed that there was any evidence on record in support of the plea that certain amount represented lawyer's fees, etc., apart from her own assertion to that effect. In the circumstances referred to by the ITO in his order, such a plea could not be accepted. The Tribunal was, therefore, correct in proceeding on the basis that there was no evidence in support of the assessee's contention. Even assuming that what the assessee represented was correct, the deduction was not permissible in terms of section 48(i). What can be deducted under section 48(i) is expenses incurred wholly and exclusively in connection with the transfer. The damages for mental worry and suffering on account of wrongful withholding and detention of her property could not, by any stretch of imagination, be said to be expenses incurred wholly and exclus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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