Tribunal partially allows appeal, remands exemption issue for further examination, upholds property sale commission disallowance.

The tribunal partly allowed the appeal, setting aside the disallowance of construction expenses and remanding the exemption issue under section 54 for further examination. The disallowance of the commission on the property sale was upheld due to lack of documentary evidence.

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Issues:
1. Disallowance of construction expenses claimed by the assessee.
2. Disallowance of commission on the sale of property.
3. Disallowance of exemption under section 54 of the Act.

Analysis:
1. Construction Expenses Disallowance:
The assessee claimed construction expenses related to a property sold, supported by a valuation report. The CIT(A) accepted 75% of the value estimated by the registered valuer, rejecting the claimed cost. The tribunal found that the assessee had provided details of the construction cost and valuation report. As there was no contrary material, the estimation by the CIT(A) was unjustified. The tribunal set aside the CIT(A)'s decision, allowing Ground No. 2.

2. Commission Disallowance:
The assessee contested the disallowance of a commission paid on the property sale, arguing it was a common practice and reasonable. However, no documentary evidence was presented regarding the payment. As evidence was lacking, the tribunal upheld the CIT(A)'s decision to confirm the disallowance of the commission expenses, dismissing Ground No. 3.

3. Exemption under Section 54 Disallowance:
Regarding the disallowance of exemption under section 54 of the Act, the assessee purchased a property using a mix of own and borrowed funds. The tribunal noted that proper verification of whether the investment was made through borrowed or own funds was lacking. Therefore, the issue was remanded back to the Assessing Officer for a fresh decision after considering all relevant documents. Ground No. 4 was partly allowed for statistical purposes.

In conclusion, the tribunal partly allowed the appeal of the assessee, setting aside the disallowance of construction expenses and remanding the issue of exemption under section 54 back to the Assessing Officer for further examination. The disallowance of the commission on the property sale was upheld due to the lack of documentary evidence.

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