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TMI Blog2024 (6) TMI 1352X X X X Extracts X X X X X X X X Extracts X X X X ..... n connection with cost of improvement to promotion of business activities which ultimately resulted in efficiently carrying on day-to-day business. The facts of cost of construction of bridge have been supported with the site plan and the photograph which is a matter of record, which has never been controverted either by the AO or by the CIT(A) or the CIT(DR), to disprove that the cost of improvement/construction incurred in 2009-10 has never been incurred by him. Such, disallowance, of the cost of construction by the AO, merely based on presumption is not tenable in the eyes of laws. Considering the factual matrix, and judicial precedents, we accept the grievance of the appellant as genuine. Accordingly, we hold that the cost of improvement to shop by construction of rivulet was capital expenditure and the cost of in taxation of rivulet would be allowable deduction as claimed by the appellant. We, therefore, delete the addition. Appeal filed by the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant craves leave to add or amend the grounds of appeal before the appeal is heard and disposed off." 3. The grounds of appeals are inter-connected to each other wherein the appellant challenged the common issue of confirming the addition of Rs. 368918/- on account of re-computation of long term capital gain ignoring the cost of improvement of Rs. 195000/- incurred in the FY 2009- 10 [AY 2010-11] for construction of a concrete bridge on the rivulet in front of the shop for the purpose of providing more accessibility to the shop from the road. Therefore, all the grounds are adjudicated together for brevity. 4. At the outset, the Ld. Counsel for the appellant submitted that the assessment was completed under section 153A r.w.s 144 of the Income Tax Act, 1961 ('the Act') vide order dated 26.09.2021making an addition of Rs. 368918/- by not allowing the benefit of Rs. 195000/- [Indexed cost Rs. 368918/-] incurred on construction of rivulet in the year 2009-10 by alleging that since the appellant had been conducting business since 2005-06, as such, the construction got completed in FY 2005-06 (APB, Pgs.97- 112).The Hon'ble CIT(A) confirmed the addition made by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y merely relying upon the fact and presumption that the appellant had been running the business in the shop and therefore, there cannot be improvement in the building in the running business ignoring the fact that the expense was not incurred for the improvement of the shop itself but was in fact incurred to improve accessibility to the shop to enhance the business of the appellant. In this regard the appellant had duly furnished the site plan and the photograph of the shop to prove the contention (APB, Pg. 26 and 27). In support, he placed reliance on various judicial precedent placed on record. He prayed that, it is very humbly submitted to delete the addition as confirmed by CIT(A). 7. Per contra, the Ld. CIT(A) stands by the impugned order. However, he failed to rebut the contentions of the counsel. 8. We have heard the rival contention, perused the material on record, impugned order and case law cited before us. Admittedly, the total amount incurred on cost of construction for the approach road/bridge was to the tune of Rs195000/- in the financial year 2009 -10 which has been sold as a part of sale transaction of the shop and shown capital gains in the return of income accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ARNATAKA in the case of Commissioner of Income-Tax v. Karnataka Power Corpn. Ltd. 205 ITR 511 observed as per head note as follows: Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/rate of - Whether approach roads form part of buildings and, thus, entitled for depreciation allowance Held, yes Section 32A of the Income-tax Act, 1961 - Investment allowance - Whether generating station will have to be treated as a 'plant' for purpose of investment allowance - Held, yes Section 80J of the Income-tax Act, 1961 - Deductions - Profits and gains from new industrial undertakings, ships, hotels, etc. - Whether where assessee-company commissioned new units and maintained separate accounts of it, assessee was entitled to deduction under section 80J - Held, yes 11. The ITAT JAIPUR BENCH 'B' in the case of Assistant Commissioner of Income-Tax v. Sjyaraj Singh [2020] 117 taxmann.com 424 (Jaipur - Trib.) observed that where assessee transferred land alongwith wells, baories, road, boundary wall etc. then proportionate cost of these structures (after indexation) against full value of consideration in terms of sale deed so executed would be allowable to ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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