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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 ..... plied his own email address '[email protected]' in Form No. 35 filed to CIT(A). Therefore, the impugned order was not communicated to assessee. It is only when the present counsel of assessee on going through e-proceeding tab of e-filing portal of department came across about the fact of passing of order by CIT(A) and advised the assessee to file next appeal to ITAT that the assessee became aware of impugned order. The assessee immediately paid appeal fee and arranged to file appeal. Therefore, the delay has occurred in such circumstance. Ld. AR very humbly submitted that there is no deliberate lethargy, negligence, mala fide intention or ulterior motive of assessee in making delay and the assessee does not stand to derive any benefit because of delay of 63 days. Hence, a judicious view should be taken and the delay should be condoned. Ld. DR for revenue did not raise any objection and left the matter to the wisdom of Bench. We have considered 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pting fair market value as on 01.04.1981 to be Rs. 4,43,000/- on the basis of value worked by the DVO without computing FMV using reverse indexation method. 3. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the Ld. AO in restricting the cost of improvement of house at Rs. 2,53,600/- as against cost of improvement claimed by the appellant of Rs. 15,24,870/-. Ground No. 1: 5. In this ground, the assessee precisely claims that the CIT(A) has erred in confirming action of AO in adopting Fair Market Value (FMV) of sold house at Rs. 4,43,000/- as on 01.04.1981 on the basis of report of Departmental Valuation Officer (DVO) as against FMV of Rs. 7,50,000/- declared by assessee even when the reference to DVO was itself illegal and bad in law. 6. Apropos to this ground, Ld. AR for assessee briefed the factual matrix that while computing taxable gain, the assessee opted for deduction of cost of acquisition 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Being so, we find merit in the submission of Ld. DR that the ground raised by assessee is not maintainable before us. Consequently, this ground is dismissed. Ground No. 2: 9. In this ground, the assessee claims that the CIT(A) has erred in confirming action of AO in adopting Fair Market Value (FMV) as per DVO's report without computing FMV using 'reverse indexation method'. 10. Ld. AR's only contention is such that the lower-authorities ought to have computed FMV on the basis of 'reverse indexation method'. Undisputedly, there is no such method prescribed in Income-tax Act, 1961. But the modus in this method is such that the present 'sale-consideration' of sold asset is divided by present inflation index and multiplied by inflation index as on 01.04.1981. During hearing, we have clearly indicated to Ld. AR that this method is the last resort when there is no other basis available for determination of FMV as on 01.04.1981. And in the present case, the AO has made a reference 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng term capital gains. The claim of expenses incurred by family members of Rs. 6,41,370/- cannot be accepted as the assessee has not filed the adequate proof of expenditure and their copy of ITR in support of the claim." CIT(A)'s order: "3.......Regarding the cost of improvement, the appellant filed copy of capital account for the F.Y. 1990-91 wherein drawing for house construction was shown as Rs. 1,59,414/-. The appellant shown capital account for F.Y. 1989-90 wherein drawing were shown at Rs. 94,136/-. The appellant further claimed that Rs. 6,00,000/- were incurred by the firm and his family members and thus total cost of improvement was Rs. 8,95,000/- by the year 1993-94 and that should be accepted. The AO referred the matter to the DVO for ascertaining fair market value as on 01/04/1981. The DVO vide his report dated 08/12/2010 determined the cost of house as on 01/04/1981 at Rs.4,43,000/-. Regarding the cost of improvement, the DVO informed that the appellant has not produced any document or detail 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 rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al expenditure towards improvement/construction was not Rs. 8,95,000/- as claimed earlier rather Rs. 15,24,870/-. This claim is shared between appellant, his wife and two sons. The appellant now claims to have spent Rs. 3,35,070/- with additional Rs. 81,440/- being expenses in F.Y. 1991-92. Rs. 1,14,000/- is claimed to be spent by his wife in F.Y. 1993-94. Rs. 1,25,800/- is claimed to be spent by his son Shailendra Joshi in F.Y. 1990-91 & 1991-92 and Rs. 9,50,000/- is claimed to be spent by his son Bhupendra Joshi in F.Y. 1994-95. Facts on record and appellant's submissions have been examined. The appellant has 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 ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... racted from books of account of M/s India Motor Cycle Agency or M/s Baba Motor Cycle Agency (partnership firms in which the assessee/wife/sons of assessee were partners) to demonstrate that all figures of costs as mentioned in the Table of CIT(A)'s order are tallied with corresponding Capital A/cs and that they were met by respective persons from withdrawals made from those partnership firms. Ld. AR showed that there are debit entries with the caption "House construction" in the Capital A/cs of respective persons. On perusal, we find that the assessee has incurred only 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 aggregating to Rs. 3,35,070/- and a large chunk of cost amounting to Rs. 11,89,800/- is being claimed to have been incurred by family members of assessee. The AO has already allowed cost of Rs. 94,136/- in FY 1989-90 and Rs. 1,59,494/- in FY 1990-91 incurred by assessee and the CIT(A) has confirmed AO's order. The CIT(A) has passed a very specific and stringent order taking into account the case history of assessee. Even at the cost of repetition, we extract the last para of the order of CIT(A): "Facts on record and appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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). 16. Ld. AR has also pointed out a mistake in AO's calculation of taxable gain in assessment-order. For an immediate reference, the working given by AO is re-produced below: ".....Thus, long term capital gain will be worked out as under: Date of acquisition 01/04/1976 Date of transfer 10/09/2007 Sale proceeds Rs. 85,00,000/- Less: Cost of acquisition as on 01.04.1981 443000 x 551/100 Rs. 24,40,930/- Cost of improvement in F.Y. 89-90 94156 x 551/172 = 3,01,627/- Cost of improvement in FY 90-91 159494 x 551/182 = 4,82,863/- Rs. 6,41,370/- Rs.30,82,300/- Long Term Capital Gain Rs.54,17,700/ Ld. AR pointed out that the AO has mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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