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TMI Blog2024 (10) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... ble method. Hence, in this situation, the reverse indexation method cannot be allowed. AR could not controvert this. Consequently, we do not find any error in the order of AO in accepting FMV of Rs. 4,43,000/- reported by DVO. Accordingly, this ground is also dismissed. Restricting the cost of improvement as against the cost of improvement claimed by assessee - We find that even while giving benefit of assessee s own withdrawals, the CIT(A) has made a mistake. Admittedly, the assessee has incurred cost of Rs. 94,136/- in FY 1989-90, Rs. 1,59,494/- in FY 1990-91 and Rs. 81,440/- in FY 1991-92 but the CIT(A) has allowed deduction of first two items only and not allowed deduction of Rs. 81,440/- incurred by assessee during the FY 1991-92. Therefore, to that limited extent, there is a mistake in CIT(A) s order. Hence, we allow claim of cost of Rs. 81,440/- incurred by assessee during the FY 1991-92 with indexation benefit in addition to what has already been allowed by AO and CIT(A). AR pointed out that the AO has made a mathematical mistake and allowed deduction of total indexed cost of improvement at Rs. 3,01,627/- (+) 4,82,863/- = Rs. 6,41,370/- whereas the total comes to Rs. 7,84,4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the explanation advanced by assessee and in absence of any contrary fact or material on record, the assessee is found to have a sufficient cause for delay in filing present appeal. We find that section 253(5) of the Act empowers the ITAT to admit an appeal after expiry of prescribed time, if there is a sufficient cause for not presenting appeal within prescribed time. It is also a settled position by Hon ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387 that whenever substantial justice and technical considerations are opposed to each other, the cause of substantial justice must be preferred by adopting a justice- oriented approach. Thus, taking into account the provision of section 253(5) and the decision of Hon ble Supreme Court, we take a judicious view, condone delay, admit appeal and proceed with hearing. 3. This is the 2nd round of litigation by assessee before us. The background facts are such that the assessee filed return of income for AY 2008-09 on 31.07.2008 declaring a total income of Rs. 4,13,910/- which included long-term capital gain of Rs. 3,61,414/- from sale of a residential house. The case was selected for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on the basis of FMV as on 01.04.1981. The assessee worked FMV at Rs. 7,50,000/-. But the AO made a reference to DVO for determining correct amount of FMV. The DVO reported FMV at Rs. 4,43,000/- in his report dated 08.12.2010. Then, the AO allowed deduction of cost of acquisition adopting the FMV of Rs. 4,43,000/- as against the FMV of Rs. 7,50,000/- claimed by assessee. 7. Ld. AR next submitted that the assessee, in its ground, has raised a legal objection that the AO s reference to DVO was itself illegal and bad in law. Ld. AR drew us to certain papers filed in Paper-Book in an attempt to show as to how and why the reference made by AO was illegal. Per contra, Ld. DR for revenue made a strong opposition against raising of this ground itself. He submitted that this is the 2nd round of litigation and in 1st round, the ITAT, in its aforesaid order dated 25.09.2017, has remanded to AO only Ground No. 2, 3 and 4 raised by assessee therein for adjudication afresh. Those Ground No. 2, 3 and 4 remanded by ITAT do not involve the issue of illegality of reference. Further, the assessee has not raised the issue of illegality of reference even in the consequential proceeding undertaken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to DVO and the DVO has given a detailed working of his estimation (Page 135 of Paper-Book) and in Para 7.1 of his report (Page 133 of Paper-Book) the DVO has also mentioned the method of valuation adopted by him as FMV by Collectors Guidelines for registration of immovable property . Therefore, there is a good working done by DVO on the basis of a strong undisputable method. Hence, in this situation, the reverse indexation method cannot be allowed. Ld. AR could not controvert this. Consequently, we do not find any error in the order of AO in accepting FMV of Rs. 4,43,000/- reported by DVO. Accordingly, this ground is also dismissed. Ground No. 3: 11. In this ground, the assessee claims that the CIT(A) has erred in confirming action of AO in restricting the cost of improvement at Rs. 2,53,600/- (correct amount should be Rs. 2,53,650/-) as against the cost of improvement claimed by assessee at Rs. 15,24,870/-. 12. The facts apropos to this ground are such that in the return of income filed, the assessee claimed deduction of cost of improvement at Rs.8,95,000/-. The AO, however, rejected assessee s claim fully. The assessee carried this issue before ITAT, Indore in 1st round by raisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etail for scope of work. The AO therefore held that expenditure of Rs. 8,95,000/- was huge amount in F.Y. 1993-94 and it was not realistic that the appellant had not maintained any record of such investment. The AO therefore disallowed the claim of improvement of Rs. 8,95,000/- by the appellant ..The AO accepted the claim of withdrawal of Rs. 94,136/- and Rs. 1,59,494/- in F.Y. 1990-91 and 1991-92 respectively towards construction of the house and allowed this as cost of improvement after due indexation. However, the AO did not allow the remaining claim of appellant i.e. Rs. 8,95,000 (-) Rs. 94,136 (-) Rs. 1,59,494 = Rs. 6,41,370/- for want of adequate proof. Now, the appellant submits that the appellant has provided entire details of expenses incurred towards improvement/construction of the residential house by him and his other family members in the course of the assessment proceedings. The appellant claims that major expenses were through family concern M/s. India Motor Cycle Agency. The appellant submits that he has submitted entire documents. The claim of the appellant is summarized as under: S.No Name of the person Amount 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 Rs. 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd therefore claim of improvement has to be restricted to the extent of expenses incurred by the appellant. In view of all the facts as enumerated above, I agree with the view adapted by the AO in his order u/s 143/254 dated 14.09.2018 allowing cost of improvement to the extent of withdrawal demonstrated by the appellant amounting to Rs. 2,53,630/- with indexation benefit thereon. Appellant s appeal on these grounds is therefore dismissed. 14. Ld. DR for revenue raised a preliminary objection that the assessee claimed cost at Rs. 8,95,000/- in return of income; that during 1st round of proceeding up to ITAT the assessee contested cost at Rs. 8,95,000/- only whereupon the ITAT remanded this issue to AO for adjudication afresh. However, the assessee has escalated his claim to Rs. 15,24,870/- in consequential proceeding before AO which is very much wrong. He submitted that when the assessee s claim itself was Rs. 8,95,000/- in the return of income and to that extent only ITAT remanded to AO, how could assessee claim cost at Rs. 15,24,800/- in 2nd round. He submitted that entertaining claim of Rs. 15,24,800/- by this Bench will go beyond what was remanded/adjudicated by Co-ordinate Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been shifting his stand very frequently. Initially the claim was Rs. 8,95,000/- only which has now increased to Rs. 15,24,870/-. Initially the expenses were made by the appellant and a family firm and some unnamed family members. But later by affidavit firm name was withdrawn and 3 family members names were introduced. Proof of withdrawal from claimed account has not been submitted. Proof of expenditure made on construction/ improvement has not been submitted and therefore the additional claim of the appellant cannot be entertained. It is also to be kept in mind that we are dealing with the assessment of the appellant and therefore claim of improvement has to be restricted to the extent of expenses incurred by the appellant. In view of all the facts as enumerated above, I agree with the view adapted by the AO in his order u/s 143/254 dated 14.09.2018 allowing cost of improvement to the extent of withdrawal demonstrated by the appellant amounting to Rs. 2,53,630/- with indexation benefit thereon. Appellant s appeal on these grounds is therefore dismissed. On a careful consideration, we are in agreement with the Ld. CIT(A) that the assessee has changed not only the quantum of cost ..... X X X X Extracts X X X X X X X X Extracts X X X X
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