Amenities charges under a separate agreement form part of flat acquisition cost for capital gains computation.

Amenities charges paid under a separate amenities agreement were treated as part of the cost of acquisition of a flat for capital gains computation. The Tribunal noted that the claim had already been accepted in principle, subject only to a limited remand to verify whether similar agreements existed for other flat owners. Once the subsequent enquiry showed comparable agreements with other owners, the authorities could not reject the claim again on genuineness grounds. The inclusion of the charges in the assessee's balance sheet also supported the claim. The disallowance was therefore unsustainable.

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Issues: Whether amenities charges paid under a separate amenities agreement formed part of the cost of acquisition of the flat for computation of capital gains.

Analysis: The claim had earlier been accepted in principle, with only a limited remand to verify whether similar amenities agreements existed in respect of other flat owners. On the subsequent enquiry, the records showed that some other flat owners had also entered into similar agreements. The authorities below nevertheless rejected the claim on the ground that its genuineness was not established. The Tribunal held that the agreement and the surrounding material had already established the claim, and the limited remand could not justify a fresh disallowance once comparable agreements were found. The fact that the charges had been reflected in the assessee's balance sheet also supported the claim.

Conclusion: The amenities charges were allowable as part of the cost of acquisition and the disallowance was unsustainable.

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