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2021 (7) TMI 626 - AT - Income TaxDisallowance of expenditure towards cost of improvement of the property - Computation of LTCG - AO was of the view that the expenditure incurred by the assessee was not towards improvement of the asset but only to maintain the asset - HELD THAT:- AO disallowed this expenditure while computing the LTCG of the assessee because the mode of computation stated in section 48 of the Act only stipulates deduction towards expenditure incurred only and exclusively in connection with the transfer of the property and towards cost of improvement of the property. We do not find it necessary to interfere with the order of the Ld.AO because these expenses are incurred for the purpose of guarding the property and not for the purpose of the improvement of the property and there is no scope for any deduction U/s. 48 of the Act for the same as held by the ld. Revenue Authorities - disallowance of expenditure made by the Ld. AO which was further sustained by the Ld. CIT (A) towards cost of improvement of the property while computing the LTCG of the assessee is hereby confirmed. Disallowance towards expenditure incurred for transfer of capital asset - HELD THAT:- We do not find it necessary to interfere with the order of the ld. Revenue Authorities, because the assessee has not provided any cogent evidence to establish that she had paid the amount for incurring brokerage expenses. The Ld. Revenue Authorities after examining the facts of the case have fairly granted deduction being 50% of expenditure incurred towards travelling for the purpose of transfer of the property. Accordingly, the order of the ld. Revenue Authorities are hereby confirmed. The assessee is a NRI and since she does not have any scope to generate cash in India the payment if at all made has to be by cheque or transfer from her bank account. Neither the assessee nor her counsel has clarified as to how the payments were made with evidence. In this situation the claim of the assessee that the payment were made to certain individuals by obtaining a receipt or affidavit from them cannot be relied upon. Levy of Interest U/s. 234A, B and C - HELD THAT:- Interest U/s. 234A, B and C of the Act are with respect to the default on the part of the assessee. Section 195 of the Act also imposed an obligation to deduct tax at a specified rate on the part of a person responsible for paying any amount to a Non-Resident which is chargeable to tax under the provisions of the Act. However, it does not absolve the non-resident from payment of tax on the pretext that the payer would have deducted tax at source. As per the provisions of the Act, the NRI assessee would also be responsible for remittance of income tax in the Government treasury if the payer fails to deduct tax at source from the payment made to the NRI assessee which is chargeable to tax under the provisions of the Act. Even in the case of the assessee the provisions of section 234A, B and C of the Act are consequential in nature and therefore we do not find it necessary to interfere with the orders of the Ld. Revenue Authorities on this issue.
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