TaxTMI 
TaxTMI 
2022 (4) TMI 846
X X X X Extracts X X X X
X X X X Extracts X X X X
....bove said house property for a consideration of Rs. 2,45,20,000/-. The assessee declared nil capital gain after claiming exemption u/s 54 and u/s 54 EC of the Income-tax Act,1961 ['the Act' for short]. The A.O. however computed the longterm capital gain at Rs. 60,32,849/-. The Ld. CIT(A) granted partial relief and hence the assessee has filed this appeal before us. 3. The capital gain workings made by the assessee and by the A.O. are extracted below for the sake of understanding the dispute before us:- (A) Capital gains workings computed by the Assessee:- Sale consideration 2,45,20,000/- Less: Sale Expenses: 5,20,400/- Net Sale consideration: 2,39,99,600/- Acquisition detailsF.Y. Cost of purchase 81-82 6,75,000/- Indexed Cost 6,75,000 x 852/100 - 57,51,000/- (@Rs. 25,000 per cent Cost of improvement - 5,00,000/- Indexed cost of improvement 14,47,980/- 71,98,980/- Capital gains 1,68,00,620/- Less: Exemption : Sec 54 - 1,18,00,620/- Investment in capital gains &n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....restriction of property sale expenses to Rs. 30,000/-. The assessee claimed expenses on sale of house property to the tune of Rs. 5,20,400/-, which consisted of brokerage amount of Rs. 4,92,400/- claimed to have been paid to a broker named Shri K.T. Verghese and advocate fee of Rs. 30,000/-. The AO rejected the claim of payment of brokerage in the absence of any proof. Before the AO, the assessee furnished an acknowledgement of receipt of brokerage signed by Shri K T Verghese. However, the same was on the letter head of the assessee herein and hence the AO did not accept the same. Accordingly, the AO rejected the claim of payment of brokerage in the absence of any proof. Accordingly, he restricted the claim of sale expenses to Rs. 30,000/-. The Ld. CIT(A) also confirmed the same. 5.1 We heard the parties on this issue and perused the record. We notice that the Ld. A.R. could not furnish the address of the above said broker. Since the assessee had obtained acknowledgement for receipt of money from Shri K.T. Verghese on his letter head, the A.O. held that he could not verify the genuineness of the payment. Before us, the assessee could furnish copy of bank statement, wherein it is....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2,45,000/-. 6. The next issue relates to determination of fair market value as on 1.4.1981. The assessee had estimated the fair market value of the land as on 1.4.1981 at Rs. 25,000/- per cent and the fair market value of building as on that date at Rs. 1,00,000/-. The A.O. accepted the fair market of building. However, he adopted the fair market value of land at Rs. 1,000/- per cent, on the basis of details obtained from sub-registrar office. Before A.O. as well as Ld. CIT(A), the assessee furnished copy of a certificate obtained by his father in the year 1981. The Tahsildar, Thrissur had issued a certificate dated 17-12-1981, wherein he had valued the property consisting of 62 cents and building at Rs. 4,52,000/-. The AO did not consider this certificate and proceeded to adopt the value shown in comparable cases during that period obtained from the sub-registrar office. Accordingly, the AO adopted the fair market value of land as on 1.4.1981 at Rs. 1,000/- per cent. 6.1 The Ld CIT(A), however, took cognizance of the certificate issued by the Tahsildar. He noticed that the value of Rs. 4,52,000/- pertained to land having extent of 62 cents and building. The Ld CIT(A) estima....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... parties on this issue and perused the record. We notice that the Ld. CIT(A) has observed that the assessee has not been able to provide any banking transaction in support of purchase of air conditioners. Further, he has observed that the air conditioners are at best categorized as furnishing in order to improve the living condition inside the building and it do not enhance the value of building or longevity of the building per se. Accordingly, on cumulative reasons, he has rejected the claim of Rs. 4.00 lakhs. Before us, the Ld. A.R. could not counter the reasoning given by Ld. CIT(A) that the air conditioners, at best, can be categorized as furnishing for improving living conditions. We also agree with the said view expressed by Ld CIT(A). Accordingly, we are of the view that the tax authorities are justified in rejecting the claim of cost of improvement of Rs. 4 lakhs relating to purchase of air conditioners. Accordingly, we confirm the order passed by Ld. CIT(A) on this issue. 8 The last issue relates to rejection of enhanced claim of deduction u/s 54 of the Act to Rs. 1,48,26,257/-. We noticed earlier that the assessee had claimed deduction u/s 154 at Rs. 1,18,00,620/- in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....atima Bai vs. ITO reported in (2009) 32 DTR (Kar) 243 and in the case of Smt.Vrinda P.Issac (supra). The Hon'ble High Court in the case of Fatima Bai (supra) has held in paragraphs 7 to 12 as under: "7. The s. 54(1) declares that when the assessee sells any long-term capital asset, the assessee should purchase the building within one year before the transfer or within two years after the transfer by investing capital gains. In which event the assessee will not be liable for capital gain tax. 8. The s. 54(2) declares that within one year from the date of transfer if the capital gain is not invested in purchase of building, he should deposit the amount in the 'Capital Gain Account Scheme' or else the assessee should invest the capital gains before filing of return within the permitted period under s. 139. In which event, the assessee will not be liable to pay capital gain tax. 9. The s. 139(4) declares that the assessee should file returns within the time prescribed, if he fails to file returns, he may file returns for any previous year at any time before expiry of one year from the end of relevant assessment year. 10. In the instant ca....