TMI Blog2017 (7) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... 94/Mds/2016 - - - Dated:- 10-1-2017 - SHRI N.R.S.GANESAN, JUDICIAL MEMBER, AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER For The Appellant : Mr. B.Suresh, C.A. For The Respondent : Mr. A.V.Sreekanth, JCIT ORDER Per A. Mohan Alankamony, AM:- This appeal is filed by the assessee aggrieved by the order of the learned Commissioner of Income Tax (Appeals)- VII, Chennai dated 08.08.2014 in ITA No.984/13-14 passed under section 143(3) r.w.s. 250(6) of the Act. 2. The assessee has raised several grounds in his appeal, which are reproduced hereinbelow:- i) The order of the learned Commissioner of Income Tax (Appeals) is opposed to the facts and circumstances of the case. ii) The learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance with regard to cost of improvement in the property of ₹ 11,56,130/- and expenses in relation to transfer of ₹ 20,00,000/- and enhancing the assessment by ₹ 3,15,000/- in spite of furnishing proof for the expenses. iii) The learned Commissioner of Income Tax (Appeals) has erred in confirming a non-existent income of ₹ 1,00,000/- without having any proof or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sale consideration as per sale deed : Rs.2,77,10,000 Less: Indexed cost of land : Rs.4,83,817 Expenses on legal brokerage: Rs.13,24,753 ₹ 18,08,570 Long term capital gains Rs.2,59,01,430 5. On appeal, the learned Commissioner of Income Tax (Appeals) also without obtaining the DVO Report confirmed the order of the learned Assessing Officer by observing as under:- 4. Perusal of the sale deed obtained by the ITO, XIV(3), Chennai, from Sub- Registrar, Anna Nagar, Chennai regarding the property sold reveals that the property was sold for a consideration of ₹ 2,10,00,000/- whereas market value of the property was ₹ 2, 77,10,000/-. But the computation of capital gains by the assessee reveals that ₹ 2,10,00,000/- only was taken into account by the assessee. The AO was of the opinion that sec.50C(l) of the Act was applicable to the facts of the case and informed the assessee accordingly. As the assessee objected, the AO referred the valuation of the capital asset to the valuati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence was produced, for legal opinion charges. The payment to Chennai Corporation is not related to the transfer of the property and hence disallowed. 4.2 The assessee furnished a copy of notice issued by Corporation of Chennai for a sum of Rs.l1,56,130/- which was claimed by the assessee as deduction in computing capital gains. The assessee also enclosed a copy of cheque for ₹ 11,56,130/- in favour of Commissioner, Corporation of Chennai for perusal. Close scrutiny of letter issued by the Corporation of Chennai to the assessee reveals the following details: CMDA Development Charges ₹ 9,000 Building License fees ₹ 4,000 Demolition fees ₹ 47,000 Open space reservation charges 10,65,000 Scrutiny fees ₹ 130 Regularisation charges ₹ 31,000 Total Rs.11,56,130 4.3 But it was not explained as to how the above payment related to the trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer of property. The expenses incurred made him richer by ₹ 2,10,00,000/- as per sale consideration mentioned in the document. Therefore, the sum of ₹ 11,56,130/- and ₹ 19,00,000/- for demolition, construction of building respectively are not in connection with transfer and hence not allowable. The AO correctly disallowed the expenditure and I decline to interfere in the disallowances made. The disallowances are therefore confirmed. 4.5 It is to be observed here that the Government aided school of which the assessee is the correspondent lost the land on which part of the school was functioning. The vacated portion of the land was sold for a huge sum of ₹ 2.10 crores whereas the alleged amount spent by the assessee in return was ₹ 30,55,130/- (Rs.ll,55,130 + ₹ 19,00,000). Perusal of deed of settlement dated 13.02.2007 made by the settler Mrs. J. Vijayalakshmi in favour of the assessee reveals that the late husband of the settler established a school in the said premises and managed the same. Some part of the said premises was given to the assessee by the above settlement deed. The settled portion of the land was sold by the assessee whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see claims to be the correspondent of the school. Hence the addition stands confirmed in the absence of proper explanation. 6. The learned Authorized Representative at the outset submitted before us that neither the learned Assessing Officer nor the learned Commissioner of Income Tax (Appeals) has provided opportunity to the assessee in accordance with section 50C(2) of the Act and therefore pleaded that the matter may be remitted back to the file of the learned Assessing Officer for fresh consideration. The learned Authorized Representative further requested that with respect to the other issues raised in the appeal also may be remitted back to the file of the Ld.A.O for fresh consideration thereby providing the assessee with one more opportunity of being heard since on the earlier occasion the assessment was hurriedly completed due to paucity of time as the assessment was time barring. 7. The learned Departmental Representative on the other hand vehemently opposed to the submissions of the learned Authorized Representative and requested for confirming the orders of the Revenue authorities, however could not confront to the submissions of the Ld.A.R. 8. We have heard t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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