TaxTMI 
TaxTMI 
2024 (6) TMI 1352
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.... "1. That the Ld. CIT(A) has erred in dismissing the appeal by passing order u/s 250(6) and sustaining the addition made by the AO. 2. That the order passed u/s 250(6) of the Income Tax Act, is bad in law as the same has been disposed off without examining the merits of the case. 3. That the CIT(A) has erred in confirming the addition of Rs. 368918/- on account of re-computation of long term capital gain ignoring the cost of improvement of Rs. 195000/- incurred in the FY 2009-10 [AY 2010-11] for construction of a concrete bridge on the rivulet in front of the shop which provided more accessibility to the shop from the road. 4. That the Ld. CIT(A) has erred in confirming the addition of Rs. 368918/- on the gro....
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....d and disposed off." 3. The grounds of appeals are inter-connected to each other wherein the appellant challenged the common issue of confirming the addition of Rs. 368918/- on account of re-computation of long term capital gain ignoring the cost of improvement of Rs. 195000/- incurred in the FY 2009- 10 [AY 2010-11] for construction of a concrete bridge on the rivulet in front of the shop for the purpose of providing more accessibility to the shop from the road. Therefore, all the grounds are adjudicated together for brevity. 4. At the outset, the Ld. Counsel for the appellant submitted that the assessment was completed under section 153A r.w.s 144 of the Income Tax Act, 1961 ('the Act') vide order dated 26.09.2021making an a....
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....access to the shop from the road and to provide improved accessibility to the shop to facilitate greater footfall in turn. The AR further submitted that the appellant had duly explained during the course of assessment proceeding that the appellant had sold his land & building (Shop) together with all the assets for a total consideration of Rs.16,80,000/- Furthermore, the appellant had duly disclosed the capital gain on sale of such land and building while filing the return of Income. 6. The AR further submitted that the Ld CIT(A) has not doubted the expenses incurred on construction of the bridge/rivulet in front of the shop but has only stated the amount expended is not for any improvement of the shop itself without appreciating the fac....
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....f construction for the approach road/bridge was to the tune of Rs195000/- in the financial year 2009 -10 which has been sold as a part of sale transaction of the shop and shown capital gains in the return of income accordingly. It is seen that the appellant has constructed a concrete bridge on the culvert in front of the shop so that the customers can have direct access to the shop in order to increase business turn over. The counsel explained that the construction expense was incurred out of money borrowed amounting to Rs.2,00,000/- from appellant friend Sh. Govind Lal and the said fact has duly been confirmed by Sh. Govind Lal in the sworn affidavit filed before the AO and also before the Ld. CIT(A) (APB, Pgs. 84- 86). 9. From the reco....
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....resumption that the appellant had been running the business in the shop. In view of that matter, we hold that the documentary evidence on record were sufficient to prove that necessary construction was made. Thus, the decision of the authorities below are infirm and perverse to the facts on record in rejecting the claim of the appellant. 10. The Hon'ble High COURT OF KARNATAKA in the case of Commissioner of Income-Tax v. Karnataka Power Corpn. Ltd. 205 ITR 511 observed as per head note as follows: Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/rate of - Whether approach roads form part of buildings and, thus, entitled for depreciation allowance Held, yes Section 32A of the Income-tax Act, 1961 - Inves....
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....on reason that it was incurred in connection with business activities which ultimately resulted in efficiently carrying on day-to-day business - Held, no - Whether, question of voluntary and/or involuntary payment is material for determining capital/revenue nature of expenditure - Held, no Whether, therefore, on facts, High Court was justified in holding that betterment charges paid was capital expenditure and, thus, disallowable under section 37(1) - Held, yes. 13. In the present case, the capital expenditure would not become revenue expenditure merely for the reason that it was incurred in connection with cost of improvement to promotion of business activities which ultimately resulted in efficiently carrying on day-to-day business. Th....