ARUN KUMAR GOELA,NEW DELHI vs. ITO, WARD- 46(1), NEW DELHI

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ITA 6864/DEL/2018Status: DisposedITAT Delhi29 September 2021AY 2015-162 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that relocation expenses of existing occupants are an allowable component of the cost of construction. Therefore, the appeal of the assessee deserves to be allowed.

What were the facts?

The assessee sold a floor of a building for Rs. 2,12,50,000. The Assessing Officer (AO) denied the inclusion of expenses incurred for vacating occupants and relocation rent in the cost of construction.

What were the issues?

Whether expenses incurred for vacating occupants and relocation rent can be included in the cost of construction for capital gains calculation.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI

Before: Ms. Suchitra KambleDr. B. R. R. Kumar

Hearing: 27.09.2021Pronounced: 29.09.2021

Per Dr. B.R.R. Kumar, Accountant Member:

1.

The present appeal has been filed by the assessee against the order of the ld. CIT(A)-16, New Delhi dated 12.07.2018.

2.

The small issue involved in this case is that the total sale consideration for one floor of the building was Rs.2,12,50,000/. The cost of construction was Rs. 1,13,37,500/- and the indexed cost of the building was Rs.55,11,885/-. The amount paid for vacating the occupants and the rent paid for relocation thereof has to be included in the expenses of construction which the AO has denied to allow. Since, the relocation expenses of the existing occupants is also an allowable component of cost of construction, the peculiar facts of the instant case and the 2 Arun Kumar Goela agreement entered with the developer, the appeal of the assessee deserves to be allowed.

3.

In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 29/09/2021.

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