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2013 (12) TMI 945 - AT - Income TaxExemption u/s 54 - determination of cost of acquisition of new house property - Legal fees toward purchase of the new asset – Held that:- The purpose for which the fees stands paid cannot be a matter of presumption - The seller-builder keep at hand all the approvals, clearances, title deeds, NOC, etc., toward execution of the sale agreement - In the absence of any evidence with regard to the actual work undertaken, this amount cannot be considered as forming part of the cost of purchase of the new asset - Decided against assessee. Civil work expenses – Held that:- Civil work comprising re-plastering, re-tiling, waterproofing, re-wiring and installation of full length grills for safety, was done which was for the interior work and renovation – The assessee has much before the renovation work occupied the house property - The modifications being made did not impact inhabitable state of the residential property - The work done, as a perusal of the bill would show, is toward upgrading interiors, interior designing, extending to curtains. – Decided against assessee. Transfer charges builder seller – Held that:- No material evidence was provided by the assessee to support the claim, so that the purpose for which the money is given is not known – However the AFS contained a clause that legal charges and security to be deposited by the buyer with the owner-builder which would cover the cost for formation of the (housing) society and it registration, and for the preparation of the AFS and conveyance – The details of the expenses were not given - Decided against assessee. Expenses on improvement – Held that:- Any house property would necessarily warrant being kept in a state of good repairs - Merely because repairs are not carried out for a number of years together, leading to incurring expenditure in lumpsum or in a huge sum, would not by itself make it capital expenditure - The same is only by way of substantial repairs, i.e., that had accumulated over the past decades - Some cost incurred toward improvement cannot be denied, the same is estimatedat Rs. 1.50 lacs, i.e., at around 20% of the expenditure claimed to have been incurred – Partly allowed in favour of assessee.
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