TMI Blog2023 (12) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... ments for utilizing the renovation work. In any case, there is no dispute about carrying out of the renovation work and the amount spent was only of Rs. 9,50,000/- for kitchen cup boards, etc.. Therefore, taking the totality of facts and circumstances into consideration, we accept the submissions of the assessee and the explanation as genuine and, therefore, direct the AO to allow the assessee the cost of improvement with indexation and re-compute the capital gains. Appeal of the assessee is allowed. - Shri G.S. Pannu, Hon ble Vice President And Shri Challa Nagendra Prasad, Judicial Member For the Assessee : Shri M.S. Dagar, CA For the Revenue : Shri Vizay B. Vasanta, CIT-DR ORDER PER C.N. PRASAD, J.M. This appeal is filed by the assessee against the final assessment order dated 19.01.2023 passed by the Assessing Officer (for short AO ) u/s 143(3) r.w.s. 144C(13) pursuant to the directions of the DRP dated 09.12.2022 passed u/s 144C(5) of the Act. The assessee in the grounds of appeal challenged the order of the AO/DRP in not allowing indexed cost of improvement to the property while computing the capital gains for the assessment year under considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nship between Fourth Dimension and Alok Lal. In the remand report the AO also observed that no substantial proof was available to show that the cash withdrawal amounts were precisely used for the renovation work. Based on the remand report the DRP held that order passed by the AO does not suffer from any infirmity. 5. The Ld. Counsel for the assessee before us made elaborate submissions as under: It was submitted that since the Appellant was living in USA, all costs for renovation were incurred through his mother Smt Sunita Kapur. After obtaining old bank statements etc. locating the old documents it was submitted that the work of renovation was done through, Sh. Alok Lal through his sole propriety firm M/S Fourth Dimension 242, Sector-17, Urban Estate, Gurgaon 122001 having PAN No.AAXPL6937C. In respect of his services he raised following invoices for his labour charges:- Bill No 010029 dated 20.5.2010 Rs. 59,000/-(copy Enclosed) Bill No 10.5.2020 dated 10.05.2010 Rs. 2,47,800/-(copy Enclosed) Payment in respect of his bills were made vide 694186 on 21.5.2010 for Rs 2,00,000 through ICIC bank Account in favour of Alok Lal and vide 694173 on 08.4.2010 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2009 in support of objections to proposed addition as per Draft Assessment order u/s 144C and plead for allowance of renovation expenses incurred. During the course of proceedings before DRP, as per Letter No MSDA/2022-23/Ashwin/IT/SCR202021-DRP/08 dated 8th September, 2022, the appellant through his AR replied to Remand Report dated 6.9.2022 filed by AO in relation to Additional evidence furnished before DRP-Delhi-1 as under: - i. Learned AO has pointed out that in respect of Invoice No 010028 dated 10.05.2010 for an amount of Rs 2,47,800/- and Invoice No 010029 dated 20.05.2010 for an amount of Rs 59,000/- aggregating to Rs 3,06,800.00, the assessee has not provided the details of corresponding payments as per bank statement. It is submitted that payment in respect of his bills were made vide 694186 on 21.5.2010 for Rs. 2,00,000/- through ICIC bank Account in favour of Alok Lal and vide 694173 on 08.4.2010 for Rs. 90,000/- through ICIC bank Account in favour of Fourth Dimension. The payments are duly reflected in ICICI Bank. Statement furnished at Page No 4 of The Additional Evidence submitted and marked as A B. Further, copy of PAN Card was also submitted at p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for cheque of Rs. 200000/- was issued in his individual capacity, he has provided bill from his sole proprietorship firm. As your honor is aware that sole proprietor firm does not have any separate registration documents as it is assessed under pan of the Proprietor. iv. As pointed out in our submissions, the assessee Sh. Ashwin Kapur is a Non- Resident and living in USA. The work of renovation was got done by his mother i.e Smt. Sunita Kapur. All payments have been made through her banking accounts being maintained with ICICI bank and Kotak Mahindra Bank . Since, payments were made by way of account payee cheque for Rs. 2,90,000/- to Sh. Alok Lal/Fourth Dimensions etc. and the remaining payments were made out of withdrawals from bank etc. Since more than 12 years have lapsed from the time the flat was renovated and being individual, does not maintain any regular books of accounts etc., Further, all material for Addition/renovation of new Flat was out of cash withdrawals from bank through bearer cheque in the name of Sh. Alok Lal etc. and he purchased material on behalf of the Assessee to execute the work for furnishing flat measuring 5,250 sq. ft. The assessee could not locat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Inspector. We find that the Inspector has enquired with the neighbors and the neighbours have stated before him that they are not aware of the improvements carried out by the assessee. Mainly, based on the enquires made with the neighbours, he came to the conclusion that the assessee has not carried out any improvement work and disallowed the entire expenditure claimed by the assessee. On appeal, the Ld. CIT(A) is of the opinion that if the A.O wanted to know exactly about the improvement works carried out by the assessee, he should have been enquired through a builder who constructed the building in spite of neighbours. Further, the Ld. CIT(A) keeping in view the above and also by considering all other factors and also take into consideration that the assessee is not residing at Chennai he is only residing at Mumbai, he disallowed an amount of Rs. 5,00,000/- for lack of evidence and directed the A.O to allow the benefit u/s 54 of the Act to the extent of Rs. 18,00,000/-. We have gone through the entire order of the Ld. CIT(A), we find that the disallowance made by the Ld. CIT(A) to the extent of Rs. 5,00,000/- is fair and reasonable and we find that no interference is call ..... X X X X Extracts X X X X X X X X Extracts X X X X
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