TaxTMI 
TaxTMI 
TaxTMI 
2018 (6) TMI 365
X X X X Extracts X X X X
X X X X Extracts X X X X
....concerning assessment year 2010- 11. 2. As per its ground of appeal, the Revenue has challenged the act ion of the CIT(A) in reversing the additions made to the long term capital gains on account of cost of acquisition/cost of improvement. 3. Briefly stated, the assessee sold a plot of land at Ranip, Ahmedabad on 08.03.2010 for a consideration of Rs. 95 Lakhs. The assessee had earl ier purchased the aforesaid plot on 06.01.2004 for a consideration of Rs. 1,06,530/-. The assessee also purchased a new residential house at Nagar Sheth Vanda, Gheekanta, Ahmedabad for which payment of Rs. 84,13,719/- was shown by the assessee towards cost of acquisition. While computing long term capital gains (LTCG) arising on sale of plot at Ranip, the asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t allegedly incurred on account of vacating the new property is not a legitimate expenditure for determination of cost of acquisition of new house. 3.2 With reference to the repairs and renovation expenses of Rs. 30,05,429/- claimed to be incurred by the assessee and thus claimed to be part of cost of acquisition of new house, the AO observed that the expenditure claimed is very unreasonable having regard to the original cost of the property of Rs. 19,08,290/-. It was further observed that almost all the payments have been made in cash only and the assessee is showing staggering outstanding payable as on 31.03.2011 at Rs. 14,30,638/-. The AO accordingly proceeded to estimate the cost of possible renovation at 20% of the claim so made. Acco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er than the original cost of acquisition by the assessee owing to tenancy encumbrance. The CIT(A) also simultaneously observed that the tenant was holding legal as well as il legal possession and annual rent of Rs. 582/- was formally paid by the tenant for occupation of the property. On the conspectus of the facts and circumstances, the CIT(A) found that the cost incurred by the assessee to cure the encumbrances and to abandon tenancy right do form part of the cost of acquisition for the purposes of Sect ion 54F of the Act. 4.2 With reference to another expense towards repairs and renovation amounting to Rs. 30,05,429/-, the CIT(A) observed that the AO has not pointed out any defect in the supporting bills towards labour contractor, electr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he orders of the authorities below and material placed on record. The central controversy involved in the present case is towards determination of total cost of acquisition of new house for the purposes of claim of deduction under s.54F of the Act while computing LTCG on sale of plot. The assessee has also included the cost incurred towards vacating the new property from tenant amounting to Rs. 35 Lakhs as well as certain costs incurred towards repairs and renovation of the new house as part of cost of acquisition of new house in addition to original cost incurred for its purchase. The original cost of acquisition of the new house was thus increased by the assessee towards cost of removal of encumbrances and cost of repairs and renovation o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n greater onus on the assessee. The assessee has not discharged the onus ful ly towards incurring of such expenses more particularly the whereabouts of substantial outstanding payments as noted above. The CIT(A) has totally omit ted to address this vital aspect. In these set of facts, the AO has fairly admitted the claim to the extent of 20% on estimated basis which stands at Rs. 6,01,085/- on a property of Rs. 19.08 Lakhs. The CIT(A) has cursorily dealt with the issue and has blamed the AO for non verification which he could have done itself if he found the AO wanting on this score. In the absence of proper evidences before us towards identification of the parties involved and actual work carried out, we are unable to comment any further. ....