2020 (9) TMI 662

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....er (Appeals) in their Appellate Order disallowed the Registered value of gift deed and considered cost of acquisition of the property as per Section 49(1) of Income-tax Act, 1961, but they failed to allow indexation cost as per section 49(1) of Income-tax Act, 1961. Further, here, it is necessary to mention that the benefit of indexation will be allowed in the year in which the property was first acquired by her grandmother. However, the learned Commissioner (Appeals) allowed the indexation from the year when the appellant became owner of the property i.e. 2008-09 which is completely against the law. Due to that reason, index cost of the property was reduced and tax incidence had increased. 2. The learned Commissioner (Appeals) fai....

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....against the actual cost of acquisition of fair market value as on 17-9-1988 when the Donor has acquired the property. The AO accordingly re-calculated the indexed cost by considering the actual cost of acquisition and stamp duty paid by the Grandmother of the assessee at the time of acquisition on 16-9-1988. The AO has also considered the JDA development expenses incurred by the Grandmother as well as the construction cost of the property. However, the AO has taken the indexation only from the date of gift till the sale of the property as against from the date of acquisition of the property by the Grandmother of the assessee. The assessee challenged the action of the AO before the LD. CIT (A) but could not succeed. 3. We have heard the l....

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....uired by the previous owner and not the year of Gift. Accordingly, ground no. 1 of the assessee's appeal is allowed. Ground No. 2 is regarding disallowance of expenditure of Rs. 5,00,000/- claimed by the assessee as Commission paid to the Agent at the time of transfer of the property and, therefore, the assessee claimed that the same is an allowable deduction under section 48 of the IT Act being the expenditure incurred in connection with transfer of the property. 4. The ld. A/R of the assessee has submitted that the assessee has paid Rs. 5,00,000/- as a Commission to the Agent in respect of transfer of the property in question, however, the AO has disallowed the claim for want of documentary evidence. He has referred to an Affida....

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....d, purchase of stamp duty and other documents and formalities require the assistance and help of a person who is well versed and having the experience of such work. Therefore, there is a prevailing practice of charging 2% of the sale consideration by the real estate Agents for providing the service of documentation, scrutiny of the documents and assisting the party in registration of the document. They are also performing the functions as they inter-face between the seller and buyer and ensures fair play between the parties regarding the sale consideration of the property transferred from one party to another as well as the proper title of the seller over the property. Therefore, the property agent is not merely helping in registration of t....