ITO, New Delhi v. K.B. Ghaneshan (HUF), Gurgaon

ITA 4817/DEL/2010 | 2005-2006
Pronouncement Date: 30-03-2012 | Result: Dismissed

Appeal Details

RSA Number 481720114 RSA 2010
Assessee PAN OFMAY2000F
Bench Delhi
Appeal Number ITA 4817/DEL/2010
Duration Of Justice 1 year(s) 4 month(s) 27 day(s)
Appellant ITO, New Delhi
Respondent K.B. Ghaneshan (HUF), Gurgaon
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 30-03-2012
Date Of Final Hearing 26-03-2012
Next Hearing Date 26-03-2012
Assessment Year 2005-2006
Appeal Filed On 03-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI SHAMIM YAHYA ITA NO. 4548/DEL/2010 ASSESSMENT YEAR: 2005-06 K.B. GANESH (HUF) VS. INCOME-TAX OFFICER 268 SECTOR 17A HUDA WARD 24(2) GURGAON (HR.). NEW DELHI. (PAN: AAAHG268L) (APPELLANT) (RESPONDENT) ITA NO. 4817/DEL/2010 ASSESSMENT YEAR: 2005-06 INCOME-TAX OFFICER VS. K.B. GANESH (HUF) WARD 24(2) 268 SECTOR 17A HUDA NEW DELHI. GURGAON (HR.) (PAN: AAAHG268L) (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI YK KAKK AR DR ASSESSEE BY: SHRI MP RAS TOGI ADV. DATE OF HEARING : 29.03.2012 DATE OF PRONOUNCEMENT : 30.03.2012 ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE AND REVENUE ARE IN CROSS APPEALS BEFO RE US AGAINST THE ORDER PASSED BY THE LEARNED CIT(APPEALS) DATED 30.0 8.2010 FOR ASSESSMENT YEAR 2005-06. 2. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES WE HAVE GONE THROUGH THE RECORD CAREFULLY. IT EMERGES OUT FROM THE RECO RD THAT ASSESSEE HAS FILED ITS RETURN OF INCOME ON 5.7.2005 DECLARING AN INCOM E OF RS.4 57 556. THE ASSESSEE HAD ENTERED INTO AN AGREEMENT WITH M/S. AD ARSH DEVELOPERS PROP. 2 OF SHRI B.M. JAYASHANKERR ON IST OF MAY 2000 FOR PU RCHASE OF PLOT IN A RESIDENTIAL LAY OUT BY THE NAME OF PALM MEADOWS AT WHITEFIELD BANGALORE. ACCORDING TO THE AGREEMENT ASSESSEE AGREED TO PURC HASE PLOT NO. 5 FOR A TOTAL CONSIDERATION OF RS. 31 71 000. THE ASSESSEE HAS SOLD THIS CONSTRUCTED HOUSE DURING THE ACCOUNTING YEAR RELEVANT TO THIS A SSESSMENT YEAR. A DISPUTE AROSE WHETHER FOLLOWING AMOUNTS SHOULD BE TREATED A S PART OF ACQUISITION COST OR NOT:: I) SHORTALL IN ORIGINAL COST OF CONSTRUCTION RS.9 2 2 175.00 II) INTEREST OF DELAYED PAYMENTS RS.2 41 484.00 III) REGISTRATION CHARGES SALES TAX ON RS.3 44 1 41.00 CONSTRUCTION KHATA AND TAX. IV) KARNATAKA ELECTRICITY BOARD WATER & RS.2 04 7 50.00 SANITARY DEPOSIT. V ) MAINTENANCE CHARGES OF VILLA RS.1 04 067.00 VI) MAINTENANCE DEPOSIT. RS.4 91 400.00 3. ACCORDING TO THE ASSESSING OFFICER THESE AMOUNT S DO NOT FORM PART OF THE ACQUISITION COST AND THEREFORE HE DID NOT PER MIT THE ASSESSEE TO COMPUTE THE CAPITAL GAIN BY TREATING THESE AMOUNTS AS COST OF ACQUISITION. HE MADE AN ADDITION OF RS.23 07 107. 3 4. ON APPEAL LEARNED FIRST APPELLATE AUTHORITY HAS PERMITTED THE ASSESSEE TO TREAT THE AMOUNT FROM SR. NOS. 1 TO 4 A S PART OF THE ACQUISITION COST HOWEVER HE HELD THAT MAINTENANCE CHARGES OF THE VILLA AND MAINTENANCE DEPOSITS CANNOT BE TERMED AS COST OF AC QUISITION FOR THE PURPOSE OF THE COMPUTATION OF CAPITAL GAIN. 5. THE ASSESSEE IN ITS APPEAL IS IMPUGNING THE EXCL USION OF TWO AMOUNTS NAMELY RS.1 04 067 PAID TOWARDS MAINTENANCE CHARGE S OF VILLA AND RS.4 91 400 DEPOSITED WITH THE BUILDER TOWARDS MAIN TENANCE. THE REVENUE IN ITS APPEAL IS IMPUGNING THE INCLUSION OF FOUR AMOUN TS EXTRACTED AT SR. NOS. 1 TO 4 IN THE COST OF ACQUISITION FOR THE PURPOSE OF COMPUTATION OF THE CAPITAL GAIN. 6. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTA NCES WE FIND THAT THE REASONS ASSIGNED BY THE ASSESSING OFFICER FOR NOT T REATING THESE AMOUNTS AS PART OF THE COST OF THE ACQUISITION IS THAT TERMS O F AGREEMENT BETWEEN THE ASSESSEE AND M/S. ADARSH DEVELOPERS DO NOT AUTHORIZ E ANY SUCH PAYMENT. LEARNED FIRST APPELLATE AUTHORITY HAS REFERRED CLAU SES NOS. 5 TO 7 OF THE AGREEMENT AND OBSERVED THAT ASSESSING OFFICER FAILE D TO CONSTRUE THE AGREEMENT IN RIGHT PERSPECTIVE. WE HAVE GONE THROUG H THESE CLAUSES AVAILABLE ON PAGE NOS. 12 TO 14 OF THE PAPER BOOK. IN OUR OPINION LEARNED 4 FIRST APPELLATE AUTHORITY HAS RIGHTLY OBSERVED THAT THESE ARE THE EXPENSES INCURRED BY THE DEVELOPER ON BEHALF OF THE ASSESSEE AND THE VENDEE HAS DIRECTLY PAID THESE AMOUNTS TO THE DEVELOPER. IT IS A CONSTRUCTIVE PAYMENT ON BEHALF OF THE ASSESSEE AND IT IS FOR THE CONSTRUCTI ON OF THE HOUSE PROPERTY THEREFORE WE DO NOT FIND ANY FORCE IN THE APPEAL O F THE REVENUE. LEARNED FIRST APPELLATE AUTHORITY HAS RIGHTLY HELD THAT THE AMOUNTS EXTRACTED AT SR. NOS. 1 TO 4 FORMS PART OF THE ACQUISITION COST. 7. AS FAR AS THE APPEAL OF THE ASSESSEE IS CONCERN ED LEARNED COUNSEL FOR THE ASSESSEE DOES NOT DISPUTE FOR ACQUISITION OF MA INTENANCE CHARGES FROM THE ACQUISITION COST BUT HE SUBMITTED THAT THE MAIN TENANCE DEPOSIT IS A ONE TIME DEPOSIT. IT SHOULD BE TREATED AT PAR WITH THE ACQUISITION OF CAPITAL ASSETS. HOWEVER WE DO NOT FIND ANY FORCE IN HIS ARGUMENTS BECAUSE EVEN IF ONE TIME PAYMENT IS BEING MADE THEN IT WILL NOT CHANGE THE NATURE OF THE EXPENSE E.G. IF ASSESSEE HAS CONTRIBUTED IN THE EXPENSES FO R COMMON PURPOSE I.E. FOR KEEPING A WATCHMAN GARDENER SWEEPER ETC. MONTHLY THEN WOULD THAT AMOUNT BE ACCUMULATED TOWARDS THE COST OF ACQUISITI ON. IN OUR UNDERSTANDING THE REPLY TO THIS QUESTION IS SIMPLY NO . THE MAINTENANCE DEPOSIT WAS MEANT FOR THE AMENITIES REQUIRED TO BE ENJOYED BY THE RESIDENTS. IT HAS NOTHING TO DO WITH THE COST OF CONSTRUCTION OR THE COST OF THE LAND. IN 5 VIEW OF THE ABOVE DISCUSSION WE DO NOT FIND ANY ME RIT IN THE APPEAL OF THE ASSESSEE ALSO. 8. IN THE RESULT BOTH THE APPEALS ARE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 30.03.20 12 SD/- SD/- ( SHAMIM YAHYA ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30/03/2012 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR