TMI Blog2014 (1) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... section 55(1)(b) of the Act - In order to claim cost of acquisition - The expenditure should have been incurred in making any additions or alterations to the capital asset that was originally acquired by the previous owner and if the previous owner had mortgaged the property and the assessee and his co-owners cleared off the mortgage so created, it could not be said that they incurred any expenditure by way of effecting any improvement to the capital asset that was originally purchased by the previous owner - Decided against assessee. Applicability of section 50C - Held that: - Following Smt. Farida Alladin V/s. Asst. CIT [2014 (1) TMI 101 - ITAT HYDERABAD] - The claim of the assessee that land has been sold by the an agreement of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the filing of this appeal by the assessee. A petition seeking condonation of delay was filed, explaining the delay as on account of misplacing of appeal papers by the assessee, who was residing at Singapur at the relevant point of time. Considering the reasonableness of the cause and the marginal nature of delay, we condone the delay and proceed to dispose of the appeal on merits. 4. Effective grounds of the assessee in this appeal read as follows- "1. The Commissioner ought to have allowed the expenditure incurred by the assessee for perfecting title and taking possession of the property as cost of acquisition. 2. The Commissioner ought to have allowed consideration paid to confirming party as part of cost of acquisition. 3. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of succession, the cost of acquisition would get restricted only to that in the hands of his ancestors, which excludes the cost of any encumbrance created by them. The Hon'ble Bombay High Court in the case of CIT Vs. RM Merchant Hussien and Fancy Corporation Ltd. held that encumbrance created by the earlier owner was clearly not a part of such of cost of acquisition. In the case of RM Arunachalam Vs. CIT, [1997] 227 ITR 222, the Hon'ble Supreme Court held as follows: "While we are affirming the impugned judgment of the High Court, we are unable to endorse the view of the Kerala High Court in Ambat Echukutty Menon v. CIT [1978] 111 ITR 880 to which reference has been made by the High Court in the impugned judgment. In that case, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the previous owner. This decision has been followed in subsequent decisions of the High Court in Salay Mohamad Ibrahim Sait v. ITO [1994] 210 ITR 700 (Ker) and K.V. Idiculla v. CIT [1995] 214 ITR 386." 6. Therefore, even if the assessee had discharged the liability by making payment to M/s Voltas Ltd, this cannot constitute a part of the cost of acquisition of the property transferred. Therefore, we uphold the order of the CIT(A) on this issue and dismiss the ground of appeal of the assessee. Facts and circumstances of the case being similar in the case on hand as well, we find no infirmity in the impugned order of the CIT(A) in upholding the action of the Assessing Officer in disallowing the claim of the assessee for deductions in re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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