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2015 (11) TMI 1274 - ITAT DELHI

2015 (11) TMI 1274 - ITAT DELHI - TMI - Short Term Capital Gain on sale of property - assessee has not disclosed the expenses relating to sale of the above property - CIT(A) deleted the addition - Held that:- CIT(A) by erroneously relying upon the judgement cited as CIT Vs Hindustan Petroleum Ltd., (1974 (10) TMI 3 - SUPREME Court ) and CIT Vs Mithlesh Kumari, [1973 (2) TMI 11 - DELHI High Court -] extended the relief of interest paid by the assessee on the borrowed loan of ₹ 35,00,000/- u .....

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assessee to acquire the asset which does not include the interest if any paid by the assessee on the loan borrowed for the purpose of purchasing such asset.

So, in the light of undisputed facts and law discussed above, the cost of acquisition of property in question in the hands of the assessee as has been claimed by Shri Damodar Das Batra, father of the assessee one of the co-sharer in the property in question to the extent of 1/3rd share. So, Ld. CIT(A) has committed patent illegali .....

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rder dated 26.05.2010 passed by Ld. CIT(A) XXVI, New Delhi on the grounds inter alia that:- 1) The Ld. CIT(A) has erred in deleting the addition of ₹ 4,18,050/- on account of Short Term Capital Gain on sale of property located at PNA-013, The Pinnacle, Gurgaon as the assessee has not disclosed the expenses relating to sale of the above property. 2) The Ld. CIT(A) has erred in deleting the addition of ₹ 1133524/- on account of S.T.C.G. on sale of property-located at PC-II/303, Essel T .....

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also far in excess of the share of assessee in the cost of property. 2. Briefly stated, the facts of the case are: during the processing of income tax return filed by the assessee for the Assessment Year 2007-08 declaring total income of ₹ 21,42,260/-, the case was put under scrutiny and consequently, notice u/s 143(2) of the Income tax Act, 1961 (hereinafter referred as the Act ), was issued on 29.09.2008. Shri S. S. Silwal, Advocate attended the proceedings, filed details in response to .....

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at ₹ 4,83,500/- on the basis of receipt dated 25.07.2006 depicting sale price of ₹ 43,51,500/- received by the assessee form Shri Rajan Ramanni and Smt. Rajini Ramanni Resident of 57, Anand Lok, New Delhi as full and final settlement against sale of aforesaid property. Sale proceeds of ₹ 43,51,500/- depicted in the receipt (supra) includes an amount of ₹ 38,68,000/- paid by the assessee for the property in question to M/s. DLF Universal Ltd. and consequently made an addi .....

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cost of acquisition of the property at ₹ 32,61,247/- as against the actual acquisition cost of ₹ 21,27,723/- on the basis of the fact that there were three co-sharers in the property in question namely; Shri Sunil Batra, Shri Damodar Das Batra and Smt. Asha Batra, each having 1/3rd share and Shri Damodar Das Batra, father of the assessee has shown the cost of acquisition of ₹ 21,27,723/- only. Consequently, excess payment of costs of acquisition claimed by the assessee to the t .....

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, the Pinnacle, Gurgaon and PC-II/303, Essel Tower, Gurgaon and relied on the judgement cited as CIT Vs Tata Iron & Steel Ltd. 231 ITR 285 (S.C.). On the other hand, Ld. A.R. relied upon the impugned order passed by Ld. CIT(A) and contended that when ICICI Bank has directly issued the cheque in favour of the builder to purchase the property and benefit of interest is required to be given to the assessee and prayed for dismissal of appeal. 8. Now, the first issue to be determined is, as to wh .....

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651/- STCG ₹ 65,449/- 8.1 However, on the other hand, A.O. by relying upon the receipt dated 25.07.2006 issued by the assessee himself in favour of Mr. Rajan Ramani and Mrs. Rajani Ramani lying at page 2 of the paper book filed by the assessee, observed that STCG comes to ₹ 4,83,500/- instead of ₹ 65,449/- as claimed by the assessee, tabulated as under: Sale consideration Rs.43,51,500/- Less C.O.A. Rs.38,68,000/- STCG Rs.04,83,500/- 8.2 Ld. CIT(A) in para 6.2 at page 9 of the i .....

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nsideration while computing capital gains. These are expenditure incurred wholly and exclusively in connection with the transfer and the cost of acquisition of assets along with the cost of any improvement interest on capital for purchased property does not increase the cost of acquisition of asset (MLG Enterprises Vs CIT (Karnataka) (H.C.) 167 ITR 11 : ITO Vs Vikram Sadananda Hoskote (ITAT, Mum.) 1800 SOP 130). Therefore, the computation was done as per the provision of the I.T. Act, 1961. 8.3 .....

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actual cost must depend on the amount paid by the assessee to acquire the asset. The amount may have been borrowed by the assessee, but even if the assessee did not repay the loan it will not alter the cost of the asset. If the borrower defaults in repayment of a part of the loan, the cost of the asset will not change. What has to be borne in mind is that the cost of an asset and the cost of raising money for purchase of the asset are two different and independent transactions. Even if an asset .....

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ase of the asset. The assessee may have raised the funds to purchase the asset by borrowing but what the assessee has paid for it, is the price of the asset. That price cannot change by any event subsequent to the acquisition of the asset. In our judgment, the manner or mode of repayment of the loan has nothing to do with the cost of an asset acquired by the assessee for the purpose of his business. 8.5 The ratio of the judgement (supra) is applicable to the facts and circumstances of the case a .....

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₹ 30,000/- stated to have been paid as commission by the assessee to Mr. P. K. Ganesh for the sale of property merely on the basis of assumptions and presumptions. There is no reference of making payment of transfer charges of ₹ 36,442/- in the receipt dated 25.07.2006 lying at page 2 of the paper book filed by the assessee nor any separate receipt has been set up by the assessee during proceedings before the A.O. or Ld. CIT(A) as the case may be. Even otherwise, property in questio .....

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f ₹ 30,000/- by the assessee to Shri K. P. Ganesh vide receipt lying at page 9 of the paper book filed by the assessee is concerned, again there is not an iota of evidence on record nor there is any reference in the receipt dated 25.07.2007 lying at page 2 of the paper book that ₹ 30,000/- has been paid as commission to Shri K P Ganesh, otherwise receipt dated 25.07.2006 would have contained the reference of payment of commission charges of ₹ 30,000/-. Had Shri K. P. Ganesh bee .....

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uded in the cost of acquisition is misconceived. Ld. CIT(A) has allowed the same on mere asking of the assessee. 8.8 The assessee has subtracted the amount of ₹ 1,93,400/- from the sale consideration of ₹ 43,51,500/- on the pretext that the amount has been directly paid by the buyer to the builder and his claim has been allowed by Ld. CIT(A) without having any evidence on record in this regard. A bare perusal of the receipt dated 25.07.2006 lying at page 2 of the paper book issued by .....

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e builder M/s. DLF Universal Ltd., Gurgaon. Even otherwise, when the assessee himself has accepted the fact that he has sold the property for ₹ 43,51,500/-, it does not lie in his mouth that out of the said amount he has paid ₹ 1,93,400/- to the builder, particularly when it is categorically mentioned in the receipt dated 25.07.2006 that he has received an amount of ₹ 43,51,500/- from the purchaser. So, the finding of Ld. CIT(A) qua the addition of ₹ 4,18,050/- are perver .....

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in the property in question sold for ₹ 1.50 crores to Sanjay Sucheta and Mrs. Ritu Sucheta. Assessee has claimed to have acquired the same at ₹ 32,61,247/- i.e. 1/3rd share. The A.O. on the basis of undisputed fact that Shri Sunil Batra assessee being coITA sharer in the property in question to the extent of 1/3rd share along with Shri Damodar Das Batra and Smt. Asha Batra had purchased the same for ₹ 50,00,000/- and as such the cost of acquisition qua each co-sharer comes to .....

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