AI Drafter 
TaxTMI 
TaxTMI 
2010 (8) TMI 820
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....bsp; a)the financial year 1995-96 in which the said flat was allotted by the DLF Universal Ltd. to the appellant vide sale agreement dt. 27th Sept., 1995; and b)the financial years 1995-96, 1996-97, 1997-98, 1999-2000 and 2001-02 in which the payments of instalments of the cost of the flat along with interest and other payments were made to builder DLF Universal Ltd. by the appellant and the total payment of the flat was Rs. 55,81,062; ii)by considering only the sum of Rs. 45,51,720 as cost of acquisition of the said flat and in not considering the following amounts for the purpose : a)interest of Rs. 8,67,048 paid to DLF Universal Ltd. by the appellant on loan taken by him for acquiring the said flat, and b)fire fighting charges (Rs. 34,916), generator charges (Rs. 46,941) and processing fee and miscellaneous charges (Rs. 80,437) paid to DLF Universal Ltd. in connection with acquisition of the said flat. 2. The assessee sold a flat No. F-011, Richmond Park, DLF City Phase I....
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....dly, the calculation of the AO was objected to for the reason that only a sum of Rs. 40,45,968 was considered to be the cost of acquisition of the property and the amount incurred on the stamp duty of Rs. 5,05,752 was not considered as cost which sum was stated in the purchase deed itself. Thirdly, the assessee objected to the index factor applied by the AO at 497 which, according to the assessee, should have been 519 being financial year 1996-97 in which the property was sold. Fourthly, the assessee objected to the computation of AO for application of s. 50C. 6. Additional grounds were also raised before the CIT(A) in which the assessee claimed that interest paid by the assessee amounting to Rs. 8,67,048 on the purchase price of flat which was paid in instalments over the period of about 5 years should also be considered to be cost. Second additional ground was in respect of claim of other charges as cost being (i) fire fighting charges -Rs. 34,916; (ii) generator charges Rs. 46,941; and (iii) processing fee and miscellaneous charges Rs. 80,437. The cost was described in the table filed before the CIT(A) which is as under : Sl. No. Particulars F.Y. 1995-96 F.Y. 1996....
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....ndexed cost of acquisition, learned CIT(A) has referred to Expln. (iii) which defines "indexed cost of acquisition" and has observed that the flat came into existence only in financial year 2001-02, hence, the question of holding the same as an "asset" by the assessee from financial year 1995-96 does not arise. Distinguishing the cases relied upon by learned Authorised Representative, it is observed by learned CIT(A) that the asset was in existence and possession had taken place at the time of agreement, thus, those cases were distinguishable. Thus, the reason assigned by the CIT(A) to give the cost indexation benefit from 2001-02 is based on the fact that the asset did not exist in financial year 1995-96 from where the assessee was claiming the cost indexation benefit. 11. So far as it relates to additional grounds raised by the assessee, learned CIT(A), referring to the decision of Karnataka High Court in the case of CIT vs. Maithreyi Pai (1984) 43 CTR (Kar) 88 : (1985) 152 ITR 247 (Kar) has denied the claim of interest to the assessee from being considered as cost of acquisition. Similarly, the other charges, namely, fire fighting charges, generator charges and processing fee....
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.... the interest paid of Rs. 8,65,032 to the builder is also part of the cost of acquisition and he placed reliance on the following decisions : (i) CIT v. Mithlesh Kumari [1973] 92 ITR 9 (Del.); (ii) CIT v. K. Raja Gopala Rao [2002] 172 CTR (Mad.) 533/[2001] 252 ITR 459 (Mad.); (iii) Addl. CIT v. K.S. Gupta [1979] 119 ITR 372 (AP); (iv) SAS Hotel Ltd. v. ITO [1983] 4 ITD 297 (Mad.); (v) CIT v. Sri Hariram Hotels (P) Ltd. [2010] 34 DTR 162 (Kar.). 16. He submitted that reliance by the CIT(A) on the decision in the case of CIT v. Maithreyi Pai (supra) is wrong as in the said case the assessee had claimed the expenditure against other income and, thus, it was held by the Court that no double deduction was permissible and the matter was remanded for verification. He submitted that in the present case no such deduction was claimed and it is also not the case of the Revenue that the assessee has claimed double deduction. He referred to the decision of Karnataka High Court in the case of CIT v. Sri Hariram Hotels (P) Ltd. (supra) to contend that such....
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....indexation benefit from the date of allotment despite the fact that the property came into existence after construction and it was held by the Tribunal that the assessee was holding asset from 7th Aug., 1993 i.e., date of allotment letter and indexation benefit was required to be given from that date. He submitted that the said decision has been applied in another decision by the Tribunal in the case of Asstt. CIT v. Credit Rating Information Services of India Ltd. (ITA No. 9396/Mum/2004, order dt. 30th April, 2008). Thus, he submitted that the orders of AO and CIT(A) on this issue should be reversed and the AO may be directed to give the indexation benefit from the date of allotment. Thus, it was submitted by the learned Authorised Representative that the appeal of the assessee should be allowed. 20. On the other hand, it was submitted by learned Departmental Representative that the other cost claimed by the assessee to the tune of Rs. 10,29,342 has rightly been disallowed by the AO and CIT(A). He submitted that these items cannot be considered to be cost as the same were not incurred on the construction, etc. Similarly, he argued that for interest also learned CIT(A) has right....
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....6, according to which the payment made as per conveyance deed is a total sum of Rs. 40,45,968. The payment made on account of stamp duty is a sum of Rs. 5,05,752. The payment made in respect of interest is a total sum of Rs. 8,65,032. The payment made for fire fighting charges is an aggregate sum of Rs. 34,960. The payment made for generator charges is an aggregate sum of Rs. 46,941 and aggregate sum paid for processing fee and other miscellaneous charges is Rs. 80,437. The assessee has also enclosed the receipts issued by the builder in respect of each item at pp. 18 to 38 of the paper book. Each of the payments made by the assessee is in respect of flat purchased by him and is issued by DLF Universal Ltd. It is not the case of the Revenue that the assessee did not make any extra payment apart from what was mentioned in the title deed as sale consideration. It is a known fact that the builder and developer of a property would charge from the assessee various charges which are as per the agreement entered into by the assessee for allotment of a particular property. 25. According to the scheme of capital gain, as per s. 48, while computing the capital gain, the assessee is entitl....
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....ed. 28. Explanation (iii) to s. 48 refers to the words 'the asset'. It means some capital asset which is subject-matter of sale on which long-term capital gain is to be computed. The capital asset is defined in s. 2(14) as under : "2(14) 'capital asset' means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include- (i)any stock-in-trade, consumable stores or raw materials held for the purposes of his business or profession; (ii)personal effects, that is to say, movable property (including wearing apparel and furniture) held for personal use by the assessee or any member of his family dependent on him, but excludes- (a)jewellery; (b)archaeological collections; (c)drawings; (d)paintings; (e)sculptures; or (f)any work of article." 29. According to the aforementioned definition, capital asset means property of any kind held by an assessee whether or not connected with ....