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TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1154
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....ssessee. Accordingly, we proceed to dispose of these appeals by hearing the ld. D.R. and after pursuing the materials available on the record. 3. Now first we take up the appeal of the assessee in ITA No. 607/Bang/2025 in the case of Vijay Lakshmi Chand Israni for adjudication. The assessee has raised the following grounds of appeal: Grounds of Appeal 10 Grounds of Appeal Tax effect relating to each ground of appeal (see note below) 1 Expenses pertaining to civil work, electrical work, plumbing work and expenses incurred for increasing the area of the plot were claimed as costs of acquisition. It is critical to note that, as cited in the Statement of Facts, the plot purchased jointly by me and my wife Nisha Israni, was a barren and un-inhabitable plot. All of the above expenses, inter-alia, were incurred to make the plot habitable, and were incurred immediately after purchase. Along with the provisions of the I.T. Act, the following case-law judgements, which were decided in favour of the assessee by Honourable Tax Courts in similar circumstances, were relied upon: 1. Komal Gurumukh Sangtani vs ITAT Mumbai 2. Rustom Homi Vakil vs ITAT Mumbai 3. Y. Manjula Reddy....
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....house property situated at Villa No.72, Adarsh Palm Retreat, Bangalore for Rs. 4,02,00,000/- (50% of Rs. 8,04,00,000). The said residential property was purchased jointly with his wife Ms. Nisha Vijay Israni in the year 2005 which was a non-furnished/ dilapidated/ inhabitable plot at the time of purchase. The assessee claimed that soon after the purchase they incurred expenditure for construction of the house and made it habitable by incurring certain capital expenditures and thereby increasing the value of the property. 4.1 From the computation of income, the AO seen that the assessee made an expense of Rs. 25,72,807/- towards items of personal effect such as roof top solar plant, air conditioners, wall speakers, microwave oven etc. which the assessee had claimed as the cost of improvement. Since the assessee had made expenses of Rs. 25,72,807/- towards items of personal effect, the AO accordingly disallowed the same as cost of improvement while computing the capital gain. 4.2 Further, it was come to the notice of the AO that the assessee had claimed an expenses of Rs. 4,99,000/- for travel and courier and claimed it as sale expenses for the purpose of computation of capital....
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....or bill no. or any date of payment is written against any of the payments. III) The table submitted by the assessee shows that it is just a prefinal cost. 6.1 The assessee by way of written submissions before the both the authorities below had submitted that said expenses are very much real and raised by the builder M/s. Akash Infotech and Infrastructure. Further, we take a note of the fact that the assessee claimed to have submitted the complete payment details along with the submissions as detailed below :- Date Particulars of Documents Raised by Amount Share of Assessee Marked as 11.09.09 Statement of payments Builder 2270045/- 1135023/- Annexure-1 04.05.10 Receipt by Builders No. 125 Builder 1763525/- 881763/- Annexure-2 05.05.10 Inter-office Memorandum (Revised Final Charge) Builder 602501/- 301251/- Annexure-3 09.05.10 Possession Certificate and confirmation of Full payment received Builder N.A. N.A. Annexure-4 6.2 Further, the ld. D.R.P-2, Bangalore noted that the assessee had incurred above cost related to the civil work, plumbing and electrical charges for improvement o....
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....ving away the possession of the house, the assessee did not taken a part of these items or remove the said items from the house and property was sold on "as is where is basis". Further, the assessee claimed that all these cost were incurred in order to make the house habitable and proper for living conditions without which no building could ever be categorised as a liveable house. The assessee all along pleaded that the purchase of various items was made in order to make the house habitable and proper for living condition which is very normal and would be incurred by every citizen who is purchasing a property from a builder. The assessee in his written submission stated that without incurring the impugned expenses claimed as cost of improvement, the house constructed by him would not be habitable at all and accordingly claimed that the aforesaid cost would form an integral part of the total amount invested for acquisition of the house property. The assessee placed reliance on the decision of ITAT, "SMC" Bench, Mumbai in the case of Shri. Komal Gurumukh Santani vs ITO in ITA no.1200 and 1201/MUM/2020 in support of his contention. The ld. AO simply brushed aside the entire contention....
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....enses. Further, there is no way the assessee can substantiate that the travelling was made solely for the sale of said property. The assessee had also not provided any supporting submission to substantiate the sale expenses and accordingly, the AO disallowed the sum of Rs. 4,99,000/- claimed as travel and courier expenses. The 1d. D.R.P-2, Bangalore find fit the AO's reasoning for disallowing the claim of assessee amounting to Rs. 4,99,000/-. The assessee by way of written submission stated that section 48(i) of the Act allows the deductions of all the expenditure incurred wholly and exclusively in connection with such transfer. On going through the details of combined expenses incurred by the assessee and his wife claimed to have been incurred wholly and exclusively in connection with the transfer of house property, we take a note of the fact that the assessee had claimed air tickets, boarding cost at Bangalore and Mumbai, meals, local travels and miscellaneous cost, courier fees etc. and claimed the same as incurred in connection with such transfer. We are of the considered opinion that so far as clause (i) of section 48 is concerned, the expression used by the legislature in....
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.... 1 Expenses pertaining to civil work, electrical work, plumbing work and expenses incurred for increasing the area of the plot were claimed as costs of acquisition. It is to be noted that, as cited in the Statement of Facts, the plot purchased jointly by me and my husband, Vijay Israni, was a barren and un-inhabitable plot. All of the above expenses, inter-alia, were incurred to make the plot habitable, and were incurred immediately after purchase. Along with the provisions of the I.T. Act, the following case-law judgements, which were decided in favour of the assessee by Honourable Tax Courts in similar circumstances, were relied upon:1. Komal Gurumukh Sangtani vs ITAT Mumbai 2. Rustom Homi Vakil vs ITAT Mumbai 3. Y. Manjula Reddy Vs. ITO Ward 10(2) ITAT Bangalore In all the above judgements the Tax Courts have maintained the view that all expenses all expenses incurred on the construction of house and work done in the house to made the house habitable should be allowed. Refer annexure Rs. 3075232 2 In AY 2010, I renovated the plot purchased in AY 2005 for residential purposes, incurring capital expenses on items like wall-installed cabinets, wardrobes, and lighting ....