TaxTMI 
TaxTMI 
2017 (12) TMI 568
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....ng 50% share in the property as capital gains. The assessee sold property of 328 Sq.yds. of site with 1330 Sqft. in ground floor and 1987 sq.ft. in first floor RCC house at Dr.No.47-10- 7/2, Dwarakanagar, Visakhapatnam for a consideration of Rs. 1,41,33,000/- and admitted his share of capital gains at Rs. 6,31,547/- as per the workings given below: Sale consideration Rs.1,41,33,000/ Less: Cost of acquisition (10-01-2007) Rs.6,00,000/ Selling expenses (stamp duty) Rs.13,42,785/ Cost of improvement (maintenance and demolishing) Rs.1,00,000/- Selling expenses (interest) Rs.9,00,000/- Selling expenses (house tax) Rs.90,000/- / Rs.1,28,69,905/- Net Capital gains Rs.12,63,095/- 50% share of the above Rs.6,31,547/- (2) Another property i.e., 369 sq.yards with 1600 sft. Madras terraced house at D.No.47-10-7/1, Dwarakanagar, Visakhapatnam was sold for a consideration of Rs. 1,40,25,500/- and admitted his share of capital gains at Rs. 11,30,227/- as per....
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....Therefore, the Ld. CIT(A) was of the view that there was no justification for payment of commission for such purchase. Though the ld. A.R. contended that for the assessment year 2007-08, the assessee's case was scrutinized and the assessment was completed u/s 143(3) of the Act and the claims are taken to have been proved, the ld. CIT(A) did not accept the claim of the assessee for deduction of commission, accordingly, dismissed the appeal of the assessee. Aggrieved by the order of the CIT(A), the assessee is in appeal before this Tribunal. 6. Appearing for the assessee, the Ld. Authorised Representative (A.R.) argued that the assessee had made the payment of Rs. 10 lakhs as commission for acquiring the property @ Rs. 5,00,000/- each and in support of the payment of commission, the assessee has furnished confirmation letters from the recipients of the commission. The said commission was recorded in the books of accounts and submitted the returns before the assessing officer during the relevant assessment year 2007-08. Since the A.O. has verified the cost of acquisition of property in the assessment order, the same issue cannot be revisited by the A.O. at the time of the sale of t....
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.....R. submitted that even though the property was purchased through cooperative society, the commission was paid to the concerned individuals who rendered the services at various stages including by giving their expertise in following the bidding process. The expenditure was included in the cost of acquisition and declared in the balance sheet of the year in which it was purchased. The assessee referring to page no.24 of the paper book has shown the values of the properties declared for the assessment year 2007-08. On the other hand, Ld. Departmental Representative (D.R.) supported the order of lower authorities. 7.3 We have gone through the paper book and it is evident that the assessee had declared the cost of acquisition of the property at Rs. 98,07,120/- in the case of 328 sq.yds and Rs. 87,12,470/- in the case of 369 sq.yds. Since the assessee had already declared the cost of acquisition in the assessment year 2007-08 and furnished the relevant balance sheet along with return of income, we do not see any reason to disturb the cost of acquisition declared by the assessee in the return of income. The fact that the cost of acquisition declared by the assessee was not disputed by....
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....n making the impugned disallowance while computing the capital gains. Accordingly, this ground of appeal is dismissed." 10. Aggrieved by the order of the CIT(A), the assessee is in appeal before this Tribunal. Appearing for the assessee, the Ld. A.R. argued that the recipients of commission have rendered the services to the assessee in disposing the property. There were disputes in the property and the purchaser of the property was residing in Delhi and the tenants are not vacating the property, hence Mr. Srinivas, Mr. Udaya Bhaskara Rao and Mr. S. Prakash have acted on behalf of the assessee and rendered the services to dispose of the property. The payment was made through bank cheques, which was debited to the bank account of the assessee. However, the assessee was unable to furnish confirmation letters from the middle men who received the commission. Since the assessee has made the payment through cheque, the Ld. A.R. argued that the payment of commission was genuine, which should be allowed as an addition. 11. On the other hand, the Ld. D.R. argued that the assessee has not established the payment of commission and did not explain the services rendered by the commission a....
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....two properties. These expenses should be borne by the buyer and these expenses should form part of the cost of acquisition of the property for the buyer. However, the assessee had stated that the stamp duty and the registration charges was incurred by the assessee and claimed a sum of Rs. 13,42,785/- for property at Dr.No.47-10-7/2 and a sum of Rs. 13,32,575/- for Dr.No.47-10-7/1 at Dwarakanagar, Visakhapatnam aggregating to Rs. 26,75,360/- as deduction, however, the assessee's share is being 50% out of the above expenses claim was restricted to his share. The assessing officer disallowed the above expenses holding that the expenses required to be borne by the buyer but not by the assessee. Aggrieved by the order of the A.O., the assessee went on appeal before the CIT(A) and the Ld. CIT(A) confirmed the disallowance of expenses as under and dismissed the appeal of the assessee. For ready reference, we extract the relevant part of the Ld. CIT(A) order which reads as under: "7.2 I have considered the submissions and perused the details flied. It is seen that the assessee had entered into a sale agreement with Shri Yedla Vasudeva Rao on 28.3.2008 for the sale of subject prope....
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....as borne this expenses on account of agreement entered with the buyer. The effect of such agreement/arrangement is that it goes to reduce indirectly the value of consideration received by the seller and also violates the mandate specified in Sec.50C of the Act. Such a private agreement/arrangement cannot be considered as an expense incurred wholly and exclusively in connection with the transfer. Therefore, I am of the view that the impugned disallowance of Rs. 26,75,360/- in the computation of capital gains is justified. Accordingly, this ground of appeal is dismissed." 14. Aggrieved by the order of the CIT(A), the assessee is in appeal before this Tribunal. Appearing for the assessee, the Ld. A.R. argued that the property was in litigation and due to pendency of litigation and not vacating the property by the tenant the assessee had agreed to incur the stamp duty expenses also, which is supported by the sale agreement dated 28.3.2008. As per the agreement, the stamp duty and registration charges for the sale deed had to be borne by the vendors and the ld. A.R. further argued that the assessee has paid the above stamp duty expenses through DD and debited to its bank account. As ....
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....ich was sold during the year under consideration. The transaction for sale of the property with M/s. VPL Projects Pvt. Ltd. required to be finalized within 9 months. The proposed sale of property to VPL Projects Pvt. Could not take place and had to pay the compensation for cancellation of the agreement. Since the amount was utilized for the purpose of acquiring the impugned property the assessee claimed the sum of Rs. 6 lakhs paid as compensation. The A.O. disallowed the claim and the Ld. CIT(A) confirmed the addition observing that there was no evidence on record to show the nexus with the sale of impugned property and payment of compensation to M/s. VPL Projects Ltd. to establish that the expenditure was wholly and exclusively incurred in connection with the transfer of the property. The transaction was not a loan transaction and the payment of Rs. 6 lakhs was not admittedly the interest. 18. During the appeal hearing, referring the paper book page No.73 of paper book, the Ld. A.R. argued that the assessee had entered into the agreement for sale of agricultural property with M/s. VPL Projects Pvt. Ltd. for a consideration of Rs. 40 lakhs and received Rs. 30 lakhs on 10.1.2007,....