2024 (2) TMI 40

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....nd accordingly, we are adjudicating ground No.3, which is as under:- "3. Ground relating to exemption under section 54 disallowed in respect of expenditure incurred on interiors of new residential house property. 3.1 The learned AO and the CIT(A), NFAC have erred in disallowing exemption under section 54 in respect of expenditure on interiors of new residential house property amounting to Rs.8,65,641/-." 2. The brief facts of the case are that the assessee filed return of income on 22/07/2013 declaring income of Rs.5,49,610/-. The case was selected for scrutiny and statutory notices were issued to the assessee. The assessee submitted reply and it was observed that the assessee sold the residential house vide sale deed dated 15/01/2013....

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....or any other reliable documents for substantiating her claim of expenditure of Rs.8,65,641/- incurred on interiors. Accordingly, he dismissed the appeal of the assessee. 4. Aggrieved from the above order, the assessee fled appeal before the ITAT. 5. The ld.AR reiterated the submissions made before the lower authorities and submitted that the assessee transferred the amount into her husband's bank account of Rs.54,65,641/- on 25/03/2013 out of which Rs.8,65,641/- was towards expenditure for interiors and assessee's husband has incurred it for making the house habitable. The money was not directly incurred by the assessee but her husband has incurred, so it was given on contract basis, therefore, bills and vouchers were kept by the contract....