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2021 (11) TMI 968 - AT - Income TaxComputation of capital gains on sale of property - long term capital or short term capital asset - Period of holding of asset - whether the holding period of the asset should be reckoned from the date of registration of the property or from the date of allotment of the property for the purpose of deciding whether the asset transferred is a long term capital asset or a short term capital asset? - HELD THAT:- We find that this issue is no longer res integra in view of the decision PCIT vs. Vembu Vaidyanathan [2019 (1) TMI 1361 - BOMBAY HIGH COURT] wherein it was held that, date of allotment would be relevant date for the purpose of determining the holding period of capital asset. It was also held that date of allotment so made shall be the relevant date for the purpose of capital gain tax as date of acquisition - as also noted that the allottee gets title to the property on the issue of allotment letter and payment of instalments was only a follow-up action and taking delivery of the possession is only a formality - asset has been held by the assessee for more than three years as computed from the date of allotment and accordingly, the asset transferred would be a long term capital asset thereby resulting in long term capital gains in the instant case. Assessee would also be eligible for benefit of indexation. Having held that the asset transferred is a long term capital asset, the next question that arises for our consideration is whether the indexation benefit for cost of acquisition should be allowed to the assessee, based on the payments made in instalments and applying the cost inflation index in the relevant year of payment. We find that assessee itself had claimed indexation benefit by applying the cost inflation index in the year of payment of instalments. Hence, there is no dispute that arises in this regard. We direct the ld. AO to accept long term capital gains returned by the assessee on sale of this flat and delete the addition made on account of capital gains made in this regard. Treatment of repairs and renovation expenses incurred by the assessee on the leased premises - HELD THAT:- From the perusal of each of those bills which are in great detail, the assessee had identified the specific items which are giving enduring benefit to the assessee and accordingly, had capitalized the same in the books of accounts and claimed depreciation accordingly, both under the companies Act as well as under the Income Tax Act. In respect of items where no enduring benefit is available, the assessee had duly charged off as revenue expenditure. No infirmity in the action of the assessee on treating the said expenditure as revenue expenditure. CIT(A) had categorically given a finding that none of the expenditure entails any structural change or extension or improvement of the building. This finding has not been controverted by the ld. DR before us. CIT(A) ought not to have treated the said expenditure as capital in nature - expenditure incurred should be allowed as revenue expenditure. Reliance on the case of CIT vs. Talathi and Panthaky Associated (P) Ltd., [2012 (2) TMI 82 - BOMBAY HIGH COURT] wherein it was held that cost of repairs / reconstruction of tenanted premises is revenue in nature and allowable as deduction. Respectfully following the aforesaid decision, the ground No.iii raised by the assessee is allowed. Disallowance of foreign travel expenditure @20% of total expenditure on an adhoc basis - As pleaded by the assessee before the ld. CIT(A) that the Managing Director had incurred various expenses during his foreign travel which is meant for business purposes and had incurred various expenses on behalf of the company - HELD THAT:- We find that the entire foreign travel expenses of the employees of the assessee company have been duly allowed in full by the ld. AO. Admittedly, the Managing Director of the assessee company is also an employee of the company and hence, he cannot be treated in a different manner with that of the other employees with regard to allowability of foreign travel expenditure for business purposes. Accordingly, we direct the ld. AO to allow the entire foreign travel expenditure and delete disallowance made on an adhoc basis - Decided in favour of assessee.
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