TMI Blog2013 (12) TMI 945X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer 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. - I.T.A. No. 7715/Mum/2011 - - - Dated:- 23-8-2013 - D. MANMOHAN AND SAN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report, the ld. AR would submit that this (the receipt aforesaid) is all that the assessee can furnish. In fact, the seller-builder would keep at hand all the approvals, clearances, title deeds, NOC, etc., so as to allay any apprehension of the buyers qua their legal antecedents and competence toward execution of the sale agreement, as indeed we find it to be in the instant case as well (Annexure A to the Agreement for sale). Further, the agreement specifically provides for the preparation of the agreement and conveyance. No doubt we observe that the subject matter of the receipt confirms of it as toward agreement to be entered into in respect of the new asset. However, even as confirmed by the ld. AR during hearing, and even otherwise apparent from the record, the agreements are entered in predetermined standardized formats as crystallized by the builder-sellers, as builders would not allow the buyers to disturb their specimen agreements. In any view of the matter, in the absence of any evidence with regard to the actual work undertaken, we are unable to consider this amount as forming part of the cost of purchase of the new asset and, therefore, as being entitled for deduction u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e building having been kept unused and unoccupied for a few years, was poorly maintained and not safe for habitation or use. Civil work comprising re-plastering, re-tiling, waterproofing, re-wiring and installation of full length grills for safety, was required. The same has been found by the Revenue as for the interior work and renovation. We firstly observe that while the inspection report is dated 29.10.2008, the inspection has admittedly been carried out in November, 2005, i.e., three years earlier. The said letter is, thus, prepared solely out of memory, and cannot therefore be considered as a credible evidence. Two, the inspection, peculiarly enough, is carried out by an Interior Designer, and not the civil contractor or structural engineer. Further, the work was admittedly carried out from November, 2005 onwards, over the next few months. It is only after ensuring the inhabitable status of the house, by causing to remove structural and/or constructional deficiencies, if any, that a person would shift, then calling the Architect/Interior Designer for better amenities. Whereas, as afore-stated, the assessee by own admission has admittedly shifted to the new premises in October ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpretation being sought, apart from being subjective and of indefinite scope, does not meet the mandate of law: i. Mrs. N. Shirin Petigara v. Third ITO [1987] 28 TTJ 324 (Bom.) ii. Mrs. Sonia Gulati v. ITO [2001] 115 Taxman 232 (Mum) (Mag.) iii. Mrs. Gulshanbanoo R. Mukhi v. Jt. CIT [2002] 83 ITD 649 (Mum.) iv. Jt. CIT v. Smt. Armeda K. Bhaya [2005] 95 ITD 313 (Mum.) v. Dy. CIT v. Uday S. Kotak [2005] 96 ITD 177 (Mum.) vi. Saleem Fazelbhoy v. Dy. CIT [2007] 106 ITD 167/[2006] 9 SOT 601 (Mum.) Further, the interpretation as provided accords with the common understanding of the word; it signifying a practical daily life phenomenon and, thus, a definite perception and meaning, and we find no reason to stretch it beyond its regular and daily user parameters. In fact, the matter should be regarded as well settled; the word 'purchase', and in the context of section 54 itself, also referred to by the tribunal in some of the decisions afore-cited, has been explained by the hon'ble apex court in CIT v. T. N. Aravinda Reddy [1979] 120 ITR 46 (SC) as being required to be construed as permitted by its ordinary meaning. In its words (at pg.48): ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under these circumstances. Before us, the ld. AR would submit that the property sold came in existence in the year 1945, and was in the assessee's occupation for three decades prior to the undertaking the renovation, for which the copy of the sale deed - the same having been also sold in October, 2005 - bearing its antecedents, has been placed on record (PB pgs. 47-56). Bank statements are not preserved for so long, and which explains their non presentation, even as the assessee has stated the source of payment as the sale of another property at the relevant time. The ld. DR would rely on the orders of the authorities below. As we see it, there are two aspects to the matter; one, the 'factum' of the work being undertaken and, two, its nature. This is as what qualifies for deduction is the expenditure incurred toward the 'cost of improvement'. The most direct and normal evidence toward the same would be the building plan at the time of acquisition of the relevant property, and that for the modification/s undertaken, which would necessarily have to be, i.e., by law, got similarly approved. This would not only substantiate of the modifications being in the nature of additions/im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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