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TMI Blog2022 (9) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is excessive high and be reduced reasonably. 4. That the appelant denied her liability to interest chargfed uner section 234C of the Income Tax Act, 1961 which the Ld. CIT(A) failed to adjudciate. 5. That any other releif/deduction which the Hon'ble Court may deem fit be granted to yoru appellant. 6. That the appellant craves leave, to urge, add, amend, alter, enlarge, modify, substitute, delete any of the ground or grounds and to adduce fresh evidence at the time of the hearing the appeal." 2. Succinctly stated, the assessee had filed her return of income for the assessment year 2012-13 on 20.03.2013, declaring an income of Rs.23,67,189/-. The return of income filed by the assessee was initially processed as such u/s.143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny assessment u/s.143(2) of the Act. 3. During the course of the assessment proceedings, it was observed by the A.O that the assessee had disclosed Long Term Capital Gain (LTCG) of Rs.1,54,45,297/- on sale of land situated at Village: Gondwara on 30.03.2012 for a consideration of Rs.2,11,00,000/-. It was observed by the A.O that the assessee had purchased the aforesaid land in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owner of the property i.e. the assessee. Accordingly, the A.O being of the view that the assessee had failed to substantiate her claim of having paid the aforesaid brokerage expenses of Rs.11 lac to facilitate the sale of the property, thus, disallowed the same. 5. As regards the claim of the assessee of having paid an amount of Rs.1 lac towards brokerage/commission for purchase of the new residential house, the same too did not find favor with the AO. It was observed by the A.O that now when the assessee had purchased the new residential house from a famous builder/developer, therefore, there was no reason for her to have availed the services of a commission agent. Accordingly, the A.O disallowed the assessee's claim for deduction of brokerage expenses of Rs.1 lac that was stated to have been incurred for purchase of the new residential house. 6. Adverting to the assesee's claim of deduction u/s.54F of the Act, it was observed by the A.O that the assessee had invested an amount of Rs.38,85,378/- towards purchase of the new residential house. The AO was of the view that as the assessee had filed a belated return u/s.139(9) of the Act, and thus, had failed to utilize the net sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payment of brokerage; and (iii) it was beyond comprehension that for a single deal the assessee would have paid commission/brokerage to four persons, thus, restricted her claim for deduction of brokerage expenses to an amount of Rs.3 lac and upheld the disallowance of the balance amount. As regards the assessee's claim of having incurred stamp duty expenses w.r.t the registered sale deed of the property sold by her, the CIT(Appeals) was of the view that as per the prevailing practice the stamp duty a/w. registration charges were borne by the purchaser of the property, therefore, the aforesaid unsubstantiated claim of the assessee did not merit acceptance. Adverting to the assessee's claim for deduction u/s.54F of the Act i.e. towards her investment made in the new residential house, it was observed by the CIT(Appeals) that as the assessee had purchased the property from a reputed builder/developer, therefore, as observed by the A.O, and rightly so, there was no justification for her to have paid a brokerage of Rs.1 lac in respect of the said purchase transaction. As regards the assessee's claim for deduction u/s. 54F in respect of the expenditure that was claimed by her to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowing her claim for deduction of expenditure that was incurred towards stamp duty/registration charges of the registered sale deed dated 31.03.2012. On a perusal of the aforesaid registered sale deed dated 31.03.2012, Page 13-17 of APB, it transpires that as per the mutual consent of the purchaser and the seller i.e the assessee, the entire registration expenditure, stamp duty etc. was incurred by the assessee, viz. Smt. Kiran Agrawal. For the sake of clarity the relevant extract of the registered sale deed is culled out as under: On the basis of the aforesaid facts we concur with the claim of the Ld. 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 of Rs.16,40,530/-. Although we have observed that the assessee's claim for deduction of registration expenses is also to be allowed, howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 amountof commission/brokerage expenses of Rs.8 lac [Rs. 11 lac (-) Rs. 3 lac] reject the same and uphold the order of the CIT(Appeals) to the said extent. (C) Cost of improvement: - 15. Adverting to the assessee's claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der that he had deposited the amount of such unutilized amount of net sale consideration in a CGAS account with a specified bank by the 'due date' contemplated under Sec. 139(1) of the Act. Further, in a case where any part of the net sale consideration had already been utilized by the assessee for the purchase or construction of the new asset, then, the amount of such utilization along with the amount so deposited in the CGAS account shall be deemed to be the cost of the new asset. We are of the considered view that the outer limit for the purchase or construction of the new asset as per sub-section (4) of Sec. 54F is the date of furnishing of the 'return of income' by the assessee under Sec.139. On a plain and literal interpretation of the aforesaid statutory provision it can safely be gathered that the conscious, purposive and intentional providing by the legislature of the "date of furnishing the return of income under Sec.139" cannot be substituted and narrowed down to Sec.139(1) of the Act. We are of the considered view that the date of furnishing of the return of income under Sec.139 would safely encompass within itself the time limit provided for filing of the 'return of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee sold her house property on 13-1-2006 while filed her return on 28-3-2007 claiming deduction under section 54 on ground that she had purchased another property jointly on 2-1- 2007 for higher sum - Assessing Officer declined said claim - One of grounds was that assessee had failed to purchase house property before due date of filing return of income under section 139(1), i.e., prior to 31-7-2006 - According to assessee, due date of filing return of income in her case was not as specified in section 139(1) but as specified in section 139(4) i.e., 31-7-2007 - Whether due date for furnishing return of income as per section 139(1) is subject to extended period provided under sub-section ('4) of section 139 and, if a person had not furnished return of previous year within time allowed under sub-section (1), assessee could file return under sub-section (4) before expiry of one year from end of relevant assessment year - Held, yes - Whether, therefore, Section 5, deduction could not be denied to assessee on this count - Held, yes [In favour of assessee]" Also a similar view had been taken by the coordinate benches of the Tribunal, viz. (i) Kishore H. Galaiya Vs. ITO (2012) 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icted the said claim of the assessee to an amount of Rs. 15 lac. On a specific query by the Bench that now when the entitlement of the assessee for claiming deduction u/s.54F ends up with the purchase or construction of the residential house, then, on what basis the expenditure that was incurred thereafter towards furnishing of the new residential property i.e. after purchasing the same would be eligible for deduction u/s.54F, it was submitted by the Ld. AR that the assessee after purchasing the new residential house had in order to render the same as habitable carried out the required additions, alterations and improvements which duly qualified for deduction u/s.54F of the Act. In support of his aforesaid contention the Ld. AR had relied on the judgment of the Hon'ble High Court of Karnataka in the case of M/s. Rahana Siraj Vs. CIT-1, Bangalore, (2015) 58 taxmann.com 333 ( Kar.) and the order of the ITAT, Mumbai in the case of Mrs. Sonia Gulati Vs. ITO in ITA No.1300/Mum/1998 dated 03.10.2000. It was submitted by the Ld. AR that as the assessee had claimed deduction of expenditure that was incurred for rendering the new residential house habitable, therefore, the same was duly eli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost of the new asset would be cost of land plus (+) cost of construction. On the same analogy, even though he purchased a new asset, which is habitable but which requires additions, alterations, modifications and improvements and if money is spent on those aspects, it becomes the cost of the new asset and therefore, he would be entitled to the benefit of deduction in determining the capital gains. The approach of the authorities that once a habitable asset is acquired, any additions or improvements made on that habitable asset is not eligible for deduction, is contrary to the statutory provisions. The said reasoning is unsustainable. To that extent, the impugned order passed by the Tribunal as well as the Lower authorities require to be set-aside and it is to be held that in arriving at cost of the new asset, Rs. 18 lakhs spent by the assessee for modification, alterations and improvements of the asset acquired is to be taken note of. Thus, the second substantial question of law is answered in favour of the assessee and against the Revenue. Hence, we pass the following order: Appeal is allowed in part." Also, we find that a similar view had been taken by the ITAT, Mumbai (SMC) i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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