TaxTMI 
TaxTMI 
2026 (10) TMI 518
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....essing Officer vide his order dated 25.11.2024, consequent to the Directions of the DRP-1, Bengaluru dated 28.10.2024. 3. The Learned DRP-1, Bengaluru and the ITO (INT TAXN)-2, HYD has erred in disallowing - Cost of Improvement of Asset Sold, to bring it, into a residential house, as evidenced by the Purchase Deed a sum of Rs. 7,14,000 on an adhoc basis, disallowing 70% of the claim, allowing only 30% out of total claim of Rs. 10,20,000/-. 4. The Learned DRP-1, Bengaluru and the ITO (INT TAXN)-2, HYD has erred in disallowing - Cost of Improvement of "NEW Asset purchased", to bring it, into a residential house, as evidenced by the Purchase Deed, glass works from M/s. Evora Home Décor Electrical Works, a sum of Rs. 1,31,924, paid in cash and receipt dated 23.04.2021 produced, on the ground the assessee has not produced bank account statements evidencing the payment of the above amount, without dismissing the claim of such work having been actually carried out by the Appellant, on an adhoc basis. 5. The Learned DRP-1, Bengaluru and the ITO (INT TAXN)-2, HYD has erred in disallowing - Cost of Improvement of "NEW Asset purchased", to bring it, into a re....
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....st of Residential Villa Purchased, is not considering as cost of acquisition for the purposes of Section 54/54F of Income Tax Act, 1961. 9. The Learned ITO (INT TAXN)-2, HYD has erred in not considering the Carried forward Short Term Capital Loss, while determining the tax liability, resulting in increased demand, for which the Appellant has filed rectification U/s 154 of Income Tax Act, 1961 vide acknowledgement dated 20/01/2025. 10. The Ld. ITO (INT TAXN)-2, HYD has erred in initiating penalty proceedings U/s 270A, in respect of under reporting of income in consequence of misreporting without specifying the limb under section 270A(9), rendering the invocation of the penalty proceedings as void ab initio, deserves to be set aside. 11. Appellant places reliance on the decision of the Karnataka High Court in M/s. Hariram Hotels Ltd and various judicial decisions in support of the claims of "Cost of improvements" to the "Old (sold) Asset" and "New Asset" and brokerage charges incurred. 12. The Appellant craves leave to add, alter, amend and delete any of the grounds at any time including at the time of hearing, For the above and other grounds to be....
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....sed the orders of the authorities below and the material available on record, as well as considered the judicial pronouncements pressed into service by them. 9. Shri P R Suresh, CA, Learned Authorized Representative (for short, "Ld. AR") for the assessee, at the threshold of hearing of the appeal submitted that the present appeal involves a delay of 305 days. Elaborating on the reasons leading to the delay, the Ld. AR submitted that the same had crept in for the reason that the assessee, remaining under the bona fide belief that the assessment order passed by the AO giving effect to the directions of the Dispute Resolution Panel (DRP), dated 25/11/2024, suffered from a mistake apparent from the record, had filed an application under section 154 of the Act with the ITO (International Taxation)-2, Hyderabad on 20/01/2025, which even as on date is pending disposal. The Ld. AR submitted that the assessee remained under a bona fide belief that the mistake in the assessment order would be rectified by the AO, thus, delaying the filing of the present appeal by 305 days. The Ld. AR submitted that, as the delay in filing the appeal was for bona fide reasons and not due to any lackadaisic....
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....sailed the impugned addition made by the AO. As regards brokerage charges claimed as a deduction of expenses incurred to facilitate the transfer of the property sold by the assessee and her spouse, the assessee has furnished a receipt dated 15.02.2024, issued by Shri S. Prabhudhan Reddy, acknowledging receipt of Rs. 4,20,000/- towards brokerage for facilitating the sale of the property. Considering the receipt and the surrounding facts, we find the claim to be duly supported. Accordingly, the entire brokerage expenditure of Rs. 4,20,000/- is allowed, and the disallowance of Rs. 2,20,000/- sustained by the AO/DRP is deleted. 14. As regards the cost of improvement of the property sold, we find that the assessee had substantiated having incurred expenditure of Rs. 4,00,000/- paid to M/s Sthira Projects and Avenues Private Limited, as evidenced by the supporting documentary evidence placed on record. Accordingly, the said expenditure, to the extent of Rs. 4,00,000/-, merits allowance. As regards the balance expenditure of Rs. 6,20,000/-, we are of the view that, though the assessee had failed to place on record any documentary evidence to support her claim of having incurred the sai....
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....hall be a member-owner and a permanent member of the association for as long as he owns the villa. We, therefore, find that the payment towards corpus fund/membership fee was mandatory and intrinsically connected with ownership of the villa. Accordingly, the same is directed to be included in the cost of the new residential property for the purposes of exemption under Section 54 of the Act. 17. In respect of the glass expenditure, the assessee has furnished an invoice dated 21.07.2022 from M/s NGS Glass Works for Rs. 1,54,307/-. As the purchase is supported by an identified supplier's invoice and there is no material adverse to the expenditure, the entire amount is allowed. 18. In respect of electrical works, the assessee furnished online payment receipt No. 00135 dated 23.04.2021 issued by M/s Evora Home Decor for Rs. 1,31,924/-. In the absence of any material disproving the expenditure, the claim is allowed. 19. Similarly, the assessee furnished an invoice dated 13.06.2022 from M/s Om Marmo World Private Limited evidencing purchase of marble for Rs. 18,691/-. In our view, the mere absence of the corresponding bank statement in the facts of the case cannot justify rejecti....