2015 (2) TMI 500

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ts spent by the assessee were towards acquisition of a capital asset, during the relevant year, and that the amount spent towards improvements was deductible. 2. The assessee, in the return for the Assessment Year (AY) 2009-10 reported sales of two capital assets in the form of half shares in a residential property in Marine Drive, Mumbai and half share in a Kashmere Gate, property. The assessee claimed that a sum of Rs. 73,27,000/- (hereinafter called as "Acquisition Cost") was used to acquire another property within a period stipulated in Section 54, i.e. MC 1-901 Moon Court Apartment, Jay Pee Green, Greater Noida (UP). It also claimed, inter alia, that a sum of Rs. 25,14,700/- (hereinafter referred as "improvement expenses") was spent t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

...., also ground no. 1 taken by the revenue is dismissed." 4. With respect to the second ground, it is urged that the ITAT fell into error since the cost of improvement was incorrectly allowed. The ITAT held on this issue as follows:                  "7.1. Apropos ground no. 2 also the case law cited by ld. DR in the case of Kiran Bansal (supra) does not support the case of revenue and we find merit in the contention of ld. Counsel for the assessee and respectfully following the ratio of decisions in the cases of B.B. Sarkar and Saleem Fazelbhoy (supra), we are of the view that the investment incurred towards improvement of the new house purchased by the assessee....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... is "held" by the assessee. Necessarily, a capital asset must be transferable. Thus, to undeRs.tand what kind of property can be considered a capital asset, it would be apposite to refer to the definition of transfer in Section 2(47) of the Act. Section 2(47)(v) and (vi), and Explanation 2 make it adequately clear that possession, enjoyment of immovable property, as well as an interest in any asset are all transferable "capital assets". The reference to acquisition "by way of any agreement or any arrangement or in any other manner whatsoever" establishes that it is not conveyance of property or the doctrine of part performance (enacted through Section 53A of the Transfer of Property Act) which result in enforceable rights, for the purposes ....