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TaxTMI 
TaxTMI 
TaxTMI 
2014 (8) TMI 1116
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....peal. 2.2. Being aggrieved with the order of ld. CIT(A), both the assessee as well as the revenue are in appeal before us. Assessee's appeal (ITA no. 1668/Del/2013): 3. The short controversy in assessee's appeal is, whether, assessee is entitled to deduction u/s 54 in respect of second residential unit purchased by him or not. Brief facts apropos this issue are that as per the return, the assessee had shown long term capital gains on sale of property amounting to Rs. 16,13,247/- as exempt. 3.1. The assessee explained that he had sold one residential house property located at house no. 52, Sector 28, Faridabad for a sum of Rs. 42 lacs. He deposited a sum of Rs. 27 lacs in the capital gain scheme account with Punjab & Sind Bank, Karol Bagh, New Delhi. The said sum was utilized for purchase of residential house property viz. Flat no. 3-D, Raj Griha Apartments, Salan for Rs. 11,00,000/-; and residential flat at Doon Apartment, village Gullarwala, Baddi for Rs. 12,50,000/-. Accordingly, it was claimed that the capital gains arising from the transfer of the old asset at Faridabad were exempt u/s 54. The assessing officer, after considering the assessee's reply and the provisions of s....
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....o reason to interfere with the impugned order of the Commissioner of Income-tax (Appeals) qua this issue." 5. Ld. DR relied on the order of CIT(A). 6. We have considered the submissions of both the parties and perused the record of the case. We find that this issue no more res integra in view of various decisions referred by the ITAT in the case of Meher R. Surti (supra). 6.1. Further, we find that amendment ahs been brought in section 54 to limit the exemption u/s 54 to one residential unit, which is applicable from A.Y. 2015-16. therefore, for the year under consideration the assessee was entitled for exemption u/s 54 in respect of more than one flat. In the result, assessee's appeal is allowed. ITA no. 2256/Del/2013 (Revenue's appeal):- 7. Following grounds are raised: "1. The CIT(A) has erred in deleting the addition of Rs. 16,19,400/- made by AO on account of disallowance of cost of improvement. 2. The CIT(A) has erred in deleting the addition of Rs. 19,30,000/- made by AO on account of disallowance of consultancy charges. 3. The CIT(A) has erred in deleting the addition of Rs. 18,87,161/- made by AO on account of disallowance of commission expenses. 4. The CIT(A)....
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....e assessee to produce copy of purchase deed of the property sold and original bills and vouchers for improvements claimed. The assessee, inter alia, explained that he had taken a loan of Rs. 13 lacs from LIC Housing Finance Ltd. and the said amount was utilized for carrying out construction of the residential house at Faridabad. Copy of loan offer letter from LIC Housing Finance Ltd. for the loan sanctioned was also filed. The assessee also produced bills of expenses in this regard. 10.1. The assessing officer did not accept the assessee's contention, inter alia, observing that assessee had failed to produce the copy of purchase deed as well as the original vouchers for improvement claimed. He, accordingly, disallowed the assessee's total claim of Rs. 16,73,110/- on this count. The assessing officer while computing long term capital gains only allowed Rs. 1,90,000/- being the purchase cost of the property on 18-6-1995 and disallowed the balance claim of assessee. 10.2. Before ld. CIT(A) the assessee submitted the documentary evidence in the form of valuation report by registered valuer certifying the cost of construction of the residential house property; occupancy certificate is....
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....officer observed that assessee had paid consultancy to Mr. Surender Pal and Mr. Sachin Sridhar but the assessee neither provided any agreement between the parties and himself nor provided any document to show whether the payments were made in elation to earning the business income. He, accordingly, made the addition of Rs. 19,30,000/- on account of consultancy charges. As regards assessee's claim of commission expenses, the assessing officer did not accept the assessee's contention and pointed out that the assessee's claim was not borne out from the evidence produced by assessee. He pointed out that assessee had failed to explain how the commission expenses debited by him in his P&L a/c were paid to the parties by M/s SKIL Himachal Infrastructure & Tourism Ltd. The confirmations of those parties to whom M/s SKIL Himachal Infrastructure & Tourism Ltd. had made payments did not mention the accounts of the assessee but rather confirmed the accounts of SKIL. He accordingly disallowed the sum of Rs. 16,87,161/- treating the same as bogus commission. 12.1. Before ld. CIT(A) the assessee clarified that the assessing officer had disallowed the expenses as under: S. No. Name of party ....
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....ing receipt of commission income from assessee, Sh. Laxman Singh Rawat, their ITR copies, bank statements, bill copies etc. (iv) M/s SKIL Himachal Infrastructure & Tourism Ltd. has also duly confirmed the fact of making payment to the parties on behalf of assessee. It is common practice that a person instead of receiving payments due from one party asks to make payment on his behalf to another party. The commission payments made by assessee were duly confirmed by all parties. 13. We have considered the rival submissions and have perused the record of the case. The factual findings recorded by ld. CIT(A), on the basis of evidences filed before him, have not been controverted. The assessee had earned consultancy income of 60,11,330/- from the business of real estate. In order to finalise the deal, the assessee met with many persons like professionals and other persons, who had the knowledge about such place and influence over the local residents. Ld. Counsel in course of hearing clarified that in Himachal Pradesh, sale and purchase of land cannot take place without the intervention of Himachal people and therefore the assessee had to take consultancy and advisory services in the m....