TMI Blog2014 (7) TMI 839X X X X Extracts X X X X X X X X Extracts X X X X ..... ught and the said expenditure was not spent by the assessee and thereby confirmed the disallowance made by the AO. - Held that:- CIT(A) are justified for denying the additional claim, there was no reason to interfere with the decision of the CIT(A) – Decided against Assessee. Income from house property – Held that:- CIT(A) determined the value per month which he considered to be a reasonable value - Neither the AO nor the CIT(A) has estimated the value of property on any reasonable basis - estimation by both the authorities is based on assumptions and presumptions which is not legally tenable - the AO is directed to accept the value shown by the assessee in respect of the property – Decided in favour of Assessee. Expenses of rental & electricity, repairs & maintenances and office expenses – Held that:- The authorities were of the view that the assessee was running the business of bill discounting from the assessee’s house and due to the involvement of personal use, the disallowance has been made/confirmed by the AO/CIT(A) - similar expenses have been accepted in the past and subsequent AYs, no disallowance is warranted on this count - the assessee is running the business of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed her only child, the assessee as her only heir and next kin. The said Will also appointed the assessee as the sole executrix of the said Will and of her Estate. According to the assessee, she had incurred an expenditure of ₹ 43,86,789/- (in various years) towards cost of improvement of the property, which the assessee had paid to the developers. Out of the said expenditure, the assessee considered an amount of ₹ 16,73,681/- as cost of improvement while computing the long term capital gain in respect of the property. Further, the assessee had claimed indexation benefit in respect expenses aggregating to ₹ 7,56,568/-. During the assessment proceedings, the assessee had further claimed the indexed cost of improvement at ₹ 65,16,566/- as against ₹ 22,09,388/- originally claimed in the return of income. In connection to the aforementioned claim, the AO requested the assessee to produce original bills/vouchers/books of accounts of M/s. Ramesh Builders to examine the claim and the personal presence of the developer. In response, vide letter 12.10.2006, the assessee requested the AO to directly summon Mr.Ramesh Thakkar, a partner in M/s. Ramesh Builders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s signed in 2003 for a sum of ₹ 3.35 crores for development of the property. The builder must have taken into account all the money he must have spent on behalf of the assessee s mother when the final price was reached for the purchase of the development rates of the property. The builder would not wait for 15 years to recover his money when there is no written agreement that he would recover his money from the assessee. The agreement had been signed after a gap of 8 years when the property was released by the State Government. Therefore, according to the Ld.CIT(A), there was no binding obligation on the assessee to sign an agreement with the builder for his efforts to release the property from the State Government acquisition. Thus, the Ld.CIT(A) was of the view that the claim of development charges by the assessee was after thought and the said expenditure was not spent by the assessee and thereby confirmed the disallowance made by the AO. Aggrieved by the impugned decision, the assessee has raised these grounds in the appeal before us. 2.3 We have heard both the sides and perused the material on record. As regards the deduction of ₹ 22,09,388/- claimed in the retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details and supporting documents of the said expenditure before the AO during the assessment proceedings. When the facts are being so, we do not find any justification on the part of the authorities below to make/confirm the disallowance. Secondly, as regards the alowability of deduction of an expenditure of ₹ 9,17,113/-, (the balance expenditure out of the total expenditure considered of ₹ 16,73,681), it is the claim of the assessee that the builder has incurred the expenditure of ₹ 12,07,798 and the builder has given the detailed debit note in connection with the expenditure and out of the said expenditure, the assessee has claimed only ₹ 9,17,113/- without indexation. In this connection, it is relevant to state that the perusal of the debit note from the builder and the details of the expenditure available respectively at pages 83 and 86 of the paper book indicates that the assessee has incurred an expenditure of ₹ 12,07,798/- during the year under consideration and the details of the expenditure and the payments made by the assessee to the builder is a matter of record and the same have been made available to the AO during the assessment proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a high value has been adopted by the AO. However, since the said property is holiday home and was not let out, but being situated in Goa which is a premium holiday location it would have some letting out value. Accordingly, the Ld.CIT(A) determined the value at ₹ 5000/- per month which he considered to be a reasonable value. Aggrieved by the impugned decision, the assessee has raised these grounds in the appeal before us. 3.2 Having heard both the sides and perused the material on record, it is pertinent to mention that neither the AO nor the Ld.CIT(A) has estimated the value of property on any reasonable basis. The estimation by both the authorities is based on assumptions and presumptions which is not legally tenable. In view of that matter, we direct the AO to accept the value shown by the assessee in respect of the said property. Resultantly, Ground No 8 and 9 are allowed. 4. In Grounds No. 10 to 13, the assessee has agitated the action of the Ld.CIT(A) in disallowing the expenditure incurred by the assessee on account of rental electricity, repairs maintenances and office expenses. 4.1 As regards the disallowance 2/3 of the expenditure on account of rent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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