TMI Blog2011 (6) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... fees and brokerage, CIT(A) has acted too technical as it is common knowledge that in the majority of transactions in house properties brokers are involved. Therefore, payment of Rs. 12,500 as brokerage cannot be considered as unwarranted. The only thing is that the assessee could not produce a formal piece of evidence. Generally such type of evidence may not be available as brokers are not a disciplined lot and not in the habit of reducing every action to a document. Therefore exclusion of brokerage and advocate fees from the cost of acquisition of the new property is not justified. That part of the order of the Commissioner of Income-tax is vacated. Penalty proceedings - since there is no penalty order subsisting at the time of passing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,20,330 included the price as per sale deed, stamp charges, registration charges, advocate fees, brokerage, tiles laying, white-wash Asian Paints, electrical rewiring and wood work. 3. On examining the records of the case, the Commissioner of Income-tax found that the assessee had not produced any evidence to support the claim of expenses in the cases of advocate fees and brokerage. He also found that expenses relating to laying of tiles, white wash, electrical rewiring and wood work cannot form part of acquisition cost. He, therefore, held that the correct amount of computation to be made under section 54 should be made after deducting the above stated items. 4. Rejecting the objections raised by the assessee, the Commissioner of Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut by the assessee for and on behalf of the seller of the property and it was in such circumstances that the Tribunal has held that those amounts also would form part of the acquisition cost. But in the present case there is no such contractual obligation. The property was sold to the assessee on an as is where is condition. Thereafter the assessee spent money to improve the inhabitability in the property. That may be an essential expenditure. But it does not form part of acquisition cost. 7. The Commissioner of Income-tax is justified in revising the assessment order to exclude the expenses relating to tiles laying, white washing, electrical rewiring and wood work from the acquisition cost of the property. Those adjustments made by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be levied or not. If the assessing authority has not levied penalty where it is imperative then only the Commissioner of Income-tax can in his wisdom interfere in that matter. 10. Secondly, on the merits the assessee has claimed those expenses as part of acquisition cost on a bona fide belief that law permits such a treatment. There is no question of furnishing any inaccurate particulars or any case of concealment of income. Therefore, initiation of penalty proceedings under section 271(1)(c) is not justified. Such direction of the Commissioner of Income-tax is vacated. 11. In the result this appeal filed by the assessee is partly allowed. 12. The order pronounced in the open court at the time of hearing on Tuesday, the 7th day of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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