TaxTMI 
TaxTMI 
2026 (5) TMI 1338
X X X X Extracts X X X X
X X X X Extracts X X X X
.... has acquired the property transferred by securing loan on interest, for which assessee has not claimed any deduction under the income from house property and therefore it is eligible to consider the cost of acquisition and deduction at indexed value needs to be granted to the assessee. 3. Meanwhile, it was found that the appeal filed by the assessee against the final assessment order is late by 737 days. The assessee has filed a petition for condonation of delay in filing of the appeal before the Tribunal. 4. The facts show that the draft assessment order was passed on 19.9.2022. The assessee filed his objections before the Dispute Resolution Panel [ld. DRP] on 18.10.2022. The ld. DRP dismissed the objections of the assessee vide direction dated 29.5.2023 and consequent to that on 16.6.2023 the final assessment order was passed. The assessee under a mistaken belief instead of filing the appeal before the ITAT preferred appeal before the ld. CIT(A) within 30 days of the assessment order. The ld. CIT(A) vide appellate order dated 11.7.2025 dismissed the appeal of the assessee on the ground that since the Directions have been issued by the ld. DRP, the CIT(A) does not have any ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unt of Rs. 4,50,000 and expenses towards the travel of Rs. 12,01,299 were reduced from the sale consideration resulting into net sale consideration of Rs. 2,46,48,701. The assessee claimed indexed cost of acquisition of Rs. 1,64,33,923, indexed cost of improvement of Rs. 28,43,316 and also claimed deduction of interest aid on loan of Rs. 37,38,440. Thus Rs. 2,30,15,679 was considered as cost of acquisition and improvement from the net sale consideration of Rs. 2,46,48,701 and offered long term capital gain of Rs. 16,33,022. 9. The ld. AO asked for the details of expenses towards travel of Rs. 12,01,299 and found that maintenance deposit paid by the assessee and other deposits of electricity etc. paid of Rs. 5,66,144 and Rs. 4,24,608 were considered as cost of acquisition and indexed and claimed deduction. The ld. AO also found that assessee has paid interest on housing loan of Rs. 37,38,440 and claimed as deduction. With respect to expenditure, the expenses incurred in foreign travel of Rs. 12,01,299 were claimed as expenses for travel. The AO did not allow the same and further did not consider the interest expenses as cost of acquisitions etc. The AO allowed the brokerage expen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed. The final assessment order was passed on the similar line. 13. The ld. AR, Mr. P.R. Suresh, CA, was heard. A detailed paperbook containing 330 pages was filed. The assessee submitted the detailed of stay expenses, travel tickets, professional fees, housing loan certificates and evidences of his earlier returns where such interest expenditure was not claimed in the return of income. The summary of income tax returns was also filed from AY 2007-08 to 2020-21 to show that assessee has not claimed interest on housing loan as deduction u/s. 24(b) of the Act. With respect to the expenses in relation to transfer of the property, the assessee also submitted that he has paid Rs. 1,50,000 to Povas Financial Consultants which is placed at page 321 of PB for the purpose of professional charges for rendering services in relation to sale of property, drafting of sale deed and advise towards tax matters. Thus the claim of the assessee for the expenditure of travel and consultancy fee was claimed as expenditure in connection with the transfer of property. 14. The assessee relied on the decision of Hon'ble Karnataka High Court in ITA No.58/2009 in the case of Hariram Hotels Pvt. Ltd. date....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ival contentions and perused the orders of the ld. lower authorities and also considered the various judicial precedents relied up on by the ld. AR. 18. According to the provision of section 48 (i) of The Act The income chargeable under the head "Capital gains" shall be computed, by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the amounts, expenditure incurred wholly and exclusively in connection with such transfer. 19. The facts in this case show that assessee is a non-resident who has sold a property in India and offered capital gain thereon. However, while computing capital gain assessee has claimed the expenses towards transfer of Rs. 12,01,299 which is explained for travel from US to India and Boarding expenses incurred by him amounting to Rs. 12,01,299 stating that such travel expenses has to be allowed as deduction to the assessee from the sale consideration in terms of provisions of section 48 (1) of the Act wherein the expenditure incurred wholly and exclusively in connection with such transfer is allowed as a deduction. The assessee has relied upon several judicial precedents including the d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessee is not entitled to claim deduction of the expenditure of travel etc. incurred by him in Nov. 2019 as these were not 'in connection with' such transfer when sale deed was executed on 6.1.2020.. However, the travel expenditure so far air expenditure is concerned which relates to Mr. Santanu Nandi has been incurred by the assessee in connection with such transfer when he arrived in India for registering sale deed. However, there is one more phrase that such expenditure incurred should be wholly and exclusively in connection with such transfer is also required to be satisfied by the assessee. There is no need for elaboration of this phrase. Further it is also part of the provisions of section 37(1) of the Act which allows deduction of expenses while computing business income. Identical phares is employed for granting deduction of expenses while computing capital gains. 21. On careful consideration of the decision relied on by the assessee, there is no discussion on whether such expenses incurred by the assessee in case of Adil Rehman (supra) were wholly and exclusively in connection with such transfer. Therefore, reliance on that decision does not help the case of the assesse....