SURESH S SHAH, MUMBAI v. ITO 24(2)-2, MUMBAI

ITA 4233/MUM/2011 | 2007-2008
Pronouncement Date: 30-03-2012 | Result: Dismissed

Appeal Details

RSA Number 423319914 RSA 2011
Assessee PAN ASHPS1947H
Bench Mumbai
Appeal Number ITA 4233/MUM/2011
Duration Of Justice 10 month(s) 6 day(s)
Appellant SURESH S SHAH, MUMBAI
Respondent ITO 24(2)-2, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 30-03-2012
Assessment Year 2007-2008
Appeal Filed On 24-05-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI P.M.JAGTAP ACCOUNTANT MEMBER & SHRI VIVEK VERMA JUDICIAL MEMBER. I.T.A. NO. 4233/MUM/2011. ASSESS MENT YEAR : 2007-08. MR. SURESH S. SHAH THE INCOME-TAX OFFICER A-72 KAVERI APPTS. VS. WARD NO. 24(2)-2 LINK ROAD MALAD (W) MUMBAI. MUMBAI 400064. PAN ASHPS1947H APPELLANT. RESPONDENT. APPELLANT BY : SHR I ANIL THAKRAN. RESPONDENT BY : SHRI PARTHASARTHI NAIK. DATE OF HEARI NG : 26-03-2012. DATE OF PRONOUNC EMENT : 30-03-2012 O R D E R PER P.M. JAGTAP A.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LEARNED CIT(APPEALS)-34 MUMBAI DATED 22-03-2011 AND THE GR OUNDS RAISED BY THE ASSESSEE THEREIN READ AS UNDER : 1. THE LD. OFFICER IS ERRED IN DISALLOWING RS.4 90 000/- WHICH WAS CLAIMED BY APPELLANT TOWARDS COST OF IMPROVEMENTS A ND ACCORDINGLY ERRED IN NOT ALLOWING THE INDEXATION ON THE SAME. 2. THE LD. OFFICER IS ALSO ERRED IN DISALLOWING A B ROKERAGE AMOUNTING TO RS.47 000/- AND PROFESSIONAL EXPENSES OF RS.35 670/ - INCURRED ON THE SALE OF PROPERTY AT MALAD. 2 ITA NO.4233/MUM/2011 2. AT THE TIME OF HEARING BEFORE US THE LEARNED CO UNSEL FOR THE ASSESSEE HAS NOT PRESSED GROUND NO. 2 RAISED BY THE ASSESSEE IN THIS APPEAL. THE SAME IS ACCORDINGLY DISMISSED AS NOT PRESSED. 3. AS REGARDS THE ISSUE RAISED IN GROUND NO.2 THE RELEVANT FACTS ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE YEAR UN DER CONSIDERATION ON 03-02-2009 DECLARING TOTAL INCOME OF RS.1 45 917/-. IN THE SAI D RETURN LONG TERM CAPITAL GAIN ARISING FROM SALE OF HIS PROPERTY IN MALAD (WEST) W AS DECLARED BY THE ASSESSEE AT NIL. FROM THE WORKING OF THE SAID CAPITAL GAIN AS F URNISHED BY THE ASSESSEE THE AO NOTICED THAT DEDUCTION WAS CLAIMED BY THE ASSESSEE FROM SALE CONSIDERATION OF RS.46 60 000/- ON ACCOUNT OF INDEXED COST OF ACQUIS ITION AND INDEXED COST OF IMPROVEMENT. SINCE THE PROPERTY WAS ACQUIRED BY THE ASSESSEE BEFORE 01-04-1981 THE VALUATION OF THE SAME AS ON 01-04-1981 AS MADE BY THE GOVERNMENT APPROVED VALUER AT RS.4 79 330/- WAS ADOPTED BY THE ASSESSEE AND THE SAME WAS CLAIMED AS DEDUCTION AFTER INDEXATION. A FURTHER DEDUCTION WAS ALSO CLAIMED BY THE ASSESSEE ON ACCOUNT OF INDEXED COST OF IMPROVEMENT WHICH WAS CLAIMED TO BE INCURRED AT RS.4 90 000/- IN THE FINANCIAL YEAR 1981-82. IN SUP PORT OF HIS CLAIM FOR HAVING INCURRED THE COST OF IMPROVEMENT A COPY OF BILL IS SUED BY ONE SHRI MISTRY CHUNILAL MOHANBHAI DATED 17-02-1980 WAS FILED BY THE ASSESSE E. ON VERIFICATION OF THE SAID BILL THE FOLLOWING OBSERVATIONS/FINDINGS WERE RECO RDED BY THE AO : I) IT IS SEEN THAT THE BILL IS DATED 17.2.1980 AND IT CLEARLY PERTAINS TO WORK DONE BEFORE 1.4.1981 I.E. BEFORE THE FAIR MARKET V ALUATION AS ON 1.4.1981. II) IN THE SUBJECT OF THE SAID BILL IT IS MENTIONED FOR THE REPAIRING WORK LABOUR WITH MATERIAL FOR YOUR BUILDING KNOWN AS ARV ING NIWAS GROUND PLUS THREE STOREY BUILDING AT SA ROAD OPP. BANK OF INDIA MALAD (WEST). FROM THE BILL IT IS NOT CLEAR WHETHE R THE COST OF IMPROVEMENT PERTAINS TO FULL BUILDING OR 1/3 RD SHARE OF TOTAL COST OF IMPROVEMENT SINCE THE ASSESSEE HAS 1/3 RD SHARE IN THE BUILDING. 3 ITA NO.4233/MUM/2011 III) SINCE THE DATE OF BILL (I.E. 17.2.1980) FOR CO ST OF IMPROVEMENT IS THE DATE PRIOR TO THE FAIR MARKET VALUE AS ON 1.4.1981 THE COST OF IMPROVEMENT IS ALREADY COVERED IN THE VALUE OF FAIR MARKET VALUE AS ON 1.4.1981. UNDER THE FACTS AND CIRCUMSTANCES THE AS SESSEES CLAIM ON ACCOUNT OF COST OF IMPROVEMENT CANNOT BE ALLOWABLE. ON THE BASIS OF ABOVE FINDINGS/OBSERVATIONS THE AO DISALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION ON ACCOUNT OF INDEXED COST O F IMPROVEMENT FOR THE PURPOSE OF COMPUTATION OF LONG TERM CAPITAL GAIN AND ACCORD INGLY THE LONG TERM CAPITAL GAIN CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE FROM THE SALE OF PROPERTY AT MALAD (WEST) WAS COMPUTED BY THE AO AT RS.21 72 277/- IN THE ASSESSMENT COMPLETED U/S 143(3) VIDE AN ORDER DATED 23-12-2009. 4. AGAINST THE ORDER PASSED BY THE AO U/S 143(3) A N APPEAL WAS FILED BY THE ASSESSEE BEFORE THE LEARNED CIT(APPEALS) AND IT WAS SUBMITTED ON HIS BEHALF BEFORE THE LEARNED CIT(APPEALS) THAT THERE WAS A MISTAKE O N THE PART OF THE CONCERNED CONTRACTOR TO PUT THE DATE ON BILL AS 17-02-1980. I T WAS SUBMITTED THAT THE WORK WAS ACTUALLY DONE BY THE SAID CONTRACTOR ONLY AFTER 01- 04-1981 AND EVEN PAYMENT FOR THE SAME WAS RECEIVED BY HIM ONLY AFTER 01-04-1981. IT WAS CONTENDED THAT THE ASSESSEE THUS WAS ENTITLED FOR DEDUCTION ON ACCOUNT OF INDEXED COST OF IMPROVEMENT AS THE SAID IMPROVEMENT WAS DONE ONLY A FTER 01-04-1981. IN SUPPORT OF THIS CONTENTION AN AFFIDAVIT OF THE CONCERNED C ONTRACTOR WAS ALSO FILED BY THE ASSESSEE BEFORE THE LEARNED CIT(APPEALS). 5. THE LEARNED CIT(APPEALS) DID NOT FIND MERIT IN T HE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE ON THIS ISSUE AND UPHELD TH E ORDER OF THE AO DISALLOWING THE CLAIM OF THE ASSESSEE FOR DEDUCTION ON ACCOUNT OF I NDEXED COST OF IMPROVEMENT FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAIN FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 4 OF HIS IMPUGNED ORDER : 4 ITA NO.4233/MUM/2011 I HAVE GONE THROUGH THE CONTENTS OF IMPUGNED ASSE SSMENT ORDER GROUNDS OF APPEAL AND WRITTEN SUBMISSIONS OF THE AP PELLANTS AUTHORIZED REPRESENTATIVE ALONG WITH THE CASE LAWS RELIED UPON BY HIM ON THIS ISSUE. I FIND NO MERIT IN THE ARGUMENTS AND SUBMISSIONS OF L D. AUTHORIZED REPRESENTATIVE. THE ASSESSING OFFICE HAS RIGHTLY CO NCLUDED THAT THE IMPUGNED EXPENDITURE IS INCURRED PRIOR TO 01/04/81 AND HAS RIGHTLY TAKEN THE VALUE AS ON 01/04/81 AS PER VALUATION REPORT SUBMIT TED BY THE APPELLANT HIMSELF AND GIVEN INDEXATION THEREON WHILE COMPUTIN G THE CAPITAL GAINS. HENCE I DO NOT FIND ANY LEGAL INFIRMITY IN THE ACT ION OF THE ASSESSING OFFICER AND THEREFORE THE SAME IS UPHELD. THE APPEAL FAILS ON THIS GROUND. 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. THE LEARNED COUNSEL FOR THE ASS ESSEE HAS REITERATED BEFORE US THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE BEFORE T HE AUTHORITIES BELOW THAT THE WORK OF IMPROVEMENT TO THE PROPERTY WAS ACTUALLY DO NE ONLY AFTER 01-04-1981. THE LEARNED DR ON THE OTHER HAND HAS INVITED OUR ATTE NTION TO THE COPY OF BILL OF THE CONCERNED CONTRACTOR SHRI MISTRY CHUNILAL MOHANBHAI PLACED AT PAGE NO. 3 OF THE ASSESSEES PAPER BOOK. AS RIGHTLY POINTED OUT BY TH E LEARNED DR THE SAID DOCUMENT DATED 17-02-1980 WAS ISSUED BY THE CONCERNED CONTRA CTOR AS BILL-CUM-RECEIPT CLEARLY INDICATING THAT NOT ONLY THE IMPROVEMENT WO RK WAS DONE MUCH BEFORE 01- 04-1981 BUT EVEN PAYMENT AGAINST THE SAID WORK WAS ALSO RECEIVED BY THE CONTRACTOR FROM THE ASSESSEE. ALTHOUGH THE LEARNED COUNSEL FOR THE ASSESSEE HAS MADE AN ATTEMPT TO SUBMIT THAT THE SAID DOCUMENT WA S ONLY AN ESTIMATE ISSUED BY THE CONCERNED CONTRACTOR IT IS DIFFICULT TO ACCEPT THE SAME KEEPING IN VIEW THAT THE AMOUNT INDICATED THEREIN AT RS.4 90 000/- HAS BEEN ACTUALLY CLAIMED BY THE ASSESSEE HIMSELF AS COST OF IMPROVEMENT. MOREOVER NO EVIDENCE WHATSOEVER HAS BEEN FILED BY THE ASSESSEE TO SUPPORT AND SUBSTANTI ATE HIS CASE THAT THE IMPROVEMENT WORK WAS ACTUALLY DONE ONLY AFTER 01-04-1981 AND EV EN THE PAYMENT FOR THE SAID WORK WAS MADE TO THE CONTRACTOR ONLY AFTER THAT DAT E. EVEN THE AFFIDAVIT OF THE CONCERNED CONTRACTOR IS ONLY A SELF SERVING EVIDENC E AND THE SAME EVEN OTHERWISE CANNOT BE RELIED UPON SINCE THE FACTS STATED THEREI N ARE CONTRADICTORY TO THE BILL- 5 ITA NO.4233/MUM/2011 CUM-RECEIPT ISSUED BY THE DEPONENT. AS SUCH CONSI DERING ALL THE FACTS OF THE CASE WE AGREE WITH THE AUTHORITIES BELOW THAT THE IMPROV EMENT WORK WAS DONE BY THE ASSESSEE PRIOR TO 01-04-1981 AND SINCE DEDUCTION WA S ALREADY CLAIMED AND ALLOWED TO THE ASSESSEE FOR THE FAIR MARKET VALUE OF HIS PR OPERTY AS ON 01-04-1981 AS ESTIMATED BY THE GOVERNMENT APPROVED VALUER ON AS I S WHERE IS BASIS WHICH DULY COVERED THE COST OF IMPROVEMENT INCURRED PRIOR TO 0 1-04-1981 THE ASSESSEE WAS NOT ENTITLED FOR ANY DEDUCTION ON ACCOUNT OF COST O F IMPROVEMENT FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAIN. IN THAT VIEW O F THE MATTER WE UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(APPEALS) ON THIS ISSUE AND DISMISS GROUND NO. 1 OF THE ASSESSEES APPEAL. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED ON THIS 30 TH DAY OF MARCH 2012. SD/- SD/- (VIVEK VERMA) (P.M. JAGTAP) JUDICIAL MEMBER ACCO UNTANT MEMBER MUMBAI DATED: 30 TH MARCH 2012. COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR E-BENCH. (TRUE COPY) BY ORDER ASSTT. REGISTRAR ITAT MUMBAI. WAKODE