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TaxTMI 
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TaxTMI 
2021 (9) TMI 538
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....of the case. On Quantum of Disallowance and additions 1". The Learned Commissioner of Income Tax (Appeals) -9 erred in law as well as on facts while confirming the following additions: I. Claim of Exemption u/s 54 of the Income Tax Act Claim u/s 54 restricted to Rs. 28,00,000 instead of Rs. 58,00,000/- II. Restriction of Cost of Improvement Cost of Improvement restricted to Rs. 3,50,000 instead of Rs. 3,00,000/- 2. Claim of Exemption u/s 54 of the Income Tax Act 1) The Honorable CIT (A)-9 has erred in overlooking the Provisions of Sec 54 of the Income tax Act where the word used is that the "cost of the residential house So Purchased" and nowhere the section talks about the sale consideration in sale deed or sale agreement. ....
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....s more concerned about the seller's Income Tax Return rather than the factual evidences provided before both ACIT and CIT (A)-9. 9) The Honorable C.I.T (A)-9 erred deciding the consideration as Rs. 28,00,000/- as admitted by the seller in his return by overlooking the consideration received amounting to Rs. 58,00,000/- admitted by the seller in response to the notice u/s133(6) issued by the ACIT and also as per agreement. 10) The Appellant prays to consider the value of consideration as Rs. 58, 00,000/- and not as Rs. 29,00,000/- by considering the grounds placed before the Honorable ITAT and render justice. 3. Restriction of Cost of Improvement u/s 55 1) The Honorable CIT(A) and the Income tax authorities(ACIT) Failed to apprec....
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....had also claimed deduction u/s.54F of the Income Tax Act, 1961 (hereinafter the 'Act' for Rs. 58,00,000/- towards purchase of new residential house from Shri G. Murugesan vide sale agreement and sale deed dated 06.02.2012. The AO has re-computed long term capital gain by restricting cost of improvement to Rs. 3,00,000/- as against Rs. 3,50,000/- claimed by the assessee, on the ground that the assessee has proved source for cost of improvement to the extent of Rs. 3,00,000/- only, by way of loan taken from M/s. Canara Bank. The AO had also allowed exemption u/s.54F of the Act, to the tune of Rs. 28 lakhs as against Rs. 58 lakhs claimed by the assessee, on the ground that though the assessee has paid a sum of Rs. 58 lakhs to Shri G. Murugesan....
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....ire consideration is paid through bank. Merely for the reason that the property was registered for lesser amount as per requirement of stamp and registration Act, total consideration paid for purchase of property cannot be ignored, more particularly when both parties agreed that sale consideration for property was at Rs. 58 lakhs. 5. The ld.DR on the other hand strongly supporting order of the ld.CIT(A) submitted that although the assessee has paid consideration in cheque but, the purpose of payment of excess amount is not discharged because the consideration as per registered sale deed was at Rs. 28 lakhs. Therefore, in absence of any documentary evidence to substantiate the claim of payment of consideration for purchase of property, dedu....
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.... has erred in sustaining addition towards disallowance of exemption claimed u/s.54F of the Act, to the tune of Rs. 30 lakhs towards consideration paid for purchase of property. Hence, we direct the AO to delete addition made towards disallowance u/s.54F of the Act. 7. The next issue that came up for our consideration from Ground No.3 of assessee appeal is restriction of cost of improvement to the tune of Rs. 3 lakhs as against cost of improvement claimed by the assessee for Rs. 3,50,000/-. 8. The assessee has claimed cost of improvement to the property for Rs. 3,50,000/- and the source for cost of improvement has been explained, out of own capital of Rs. 50,000/- and bank finance from Canara Bank of Rs. 3 lakhs. The AO has restricted cost....