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TMI Blog1984 (1) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 of the Incometax Act, 1961, while computing the capital gain in the hands of the assessee ? The assessee, Smt. Ujjambai, was the owner of an immovable property at Jabalpur which was self-occupied. One-third of this property was sold for a sum of rupees three lakhs during the accounting period relevant to the assessment year 1973-74. After making various deductions including the selling expenses and the cost of the property, the assessee offered a sum of Rs. 44,620 as capital gain from this property. On the other hand, the ITO worked out the amount of capital gain at a sum of Rs. 1,21,220. The difference arose on account of the fact that the assessee estimated the cost of improvement to the property during the periods 1959 to 1964 at a su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld the order of the ITO by holding that during all these years there have been additions and alterations and the expenditure incurred was borne by the landlord as well as by the tenant, i.e., the firm, Mohanlal Hargovinddas. Only the expenditure incurred by the assessee has been rightly allowed while computing the capital gain and in their opinion the expenditure incurred by the tenant has rightly been disallowed. Under s. 55(1)(b) of the Act, which is applicable in this case, cost of improvement " means capital expenses incurred in making any additions or alterations to the capital asset of the assessee incurred by the owner of the said property. In this case, expenses incurred for the improvement of the building were partly debited to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the I.T. Act, 1961, and the G.T. Act, 1958, are parts of an integral scheme of taxation and the same amount which is chargeable as gift could not be intended to be charged also as capital gains and so it should have been held that the expenses incurred for making additions and improvements in the building borne by the other partner, Jadobai, be treated as a gift to the assessee in view of the definition of " gift " in s. 2(12) of the G.T. Act. He further contended that though this question is not referred by the Tribunal, it is open to this court to resettle or reframe the question formulated by the Tribunal before answering it so as to bring out the real issue between the parties. Shri B. K. Rawat, learned counsel for the Department, su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he interest paid by the assessee on money borrowed for purchase of a land constituted part of actual cost of assessee for the purpose of determining the capital gain derived from the sale of the land, but this ruling has no relevance to the facts of the present case. We agree with the Tribunal that only those expenses which have been actually incurred by the assessee in making additions and improvements in the property ought to be taken into consideration while computing capital gains under s. 55(1)(b) of the Act. The expenses incurred by the firm which came to the share of the assessee has been allowed while those which came to the share of the other partners have been rightly disallowed. Since it was a self-acquired property of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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