SHRI. SAJAL RADHIKAMOHAN KAR,MUMBAI vs. ACIT CIRCLE-27 (3) , MUMBAI

ITA No.6476/Mum/2019 AY. 2015-16 1 Shri Sajal Radhikamohan kar Vs. ACIT, Circle-27(3) IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “H” MUMBAI BEFORE SHRI S.RIFAUR RAHMAN (ACCOUNTANT MEMBER) AND SHRI RAVISH SOOD (JUDICIAL MEMBER) ITA No. 6476/MUM/2019 (Assessment Year: 2015-16) Shri Sajal Radhikamohan Kar ACIT,Circle -27(3) 503, Swastik Solitaire, Chadve Vs. Tower 6, Vashi Railway CHS, Sion Trombay Road, Station Complex, Chember, Mumbai – 400071 Navi Mumbai – 400 703 PAN No. AADPK3367P (Assessee) (Revenue) Assessee by : Shri Reepal G.Tralshawala, A.R Revenue by : Shri Gurbinder Singh, D.R Date of Hearing : 03/08/2021 Date of pronouncement : 01/09/2021

ORDER PER RAVISH SOOD, J.M: The present appeal filed by the assessee is directed against the order passed by the CIT(A)-25, Mumbai dated 04.06.2019, which in turn arises from the order passed by the A.O u/s 143(3) of the Income-Tax Act, 1961 (for short „Act‟) dated 22.09.2017 for A.Y. 2015-16. The assessee has assailed the impugned order on the following grounds before us: “A. Long Term Capital Gains on sale of property to be taxed in hands of assesses and not HUF: 1. The Ld. CIT(A) erred in holding that the long term capital gains from sale of Ganga Estate Property be taxed in the hands of Sajal Kar HUF instead of offered to tax by the appellant without appreciating that:-

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a) the HUF was partitioned and said properly was released in the hands of the appellant on 29.06.2002; b) the said property is since then in all the records including Society records held in the name of appellant including share certificate; c) no objection is raised by the third party purchaser in the registration authorities upon sale of the said property by the appellant; hence, the long term capital gains on the sale of the said property is correctly reflected in the return of income of the appellant, being the rightful owner of the property and die same may be accepted. B. Claim of sec.54 restricted to 50% of investment made 2. The Ld. CIT(A) erred in restricting the claim of deduction u/s.54 of the Act to 50% of the investment made without appreciating that:- a) the new property was purchased by the appellant by himself making the entire payment of the new property; b) the second name in the agreement is of appellant wife and was kept for security purpose only and no amount is contributed by appellant wife towards purchase of new property; c) the appellant is 100% owner of the new property; and hence, the claim of deduction u/s.54 of the Act restricted to 50% is without any justification and liable to be deleted. C) Rejecting additional cost of purchase of property of Rs.1.50.000/- plus indexation thereon of Rs.11,54,887/- incurred in the year 1985: 3. The Ld, CIT(A) erred in rejecting the further additional cost of purchase of property of Rs.1,50,000/- and indexed cost thereon of Rs.11,54,887/- while computing the long term capital gains without appreciating that this additional cost of Rs.1,50,000/- was paid while purchasing the property m the year 1985 towards additional amenities in the duplex flat including garden and supporting document for the same was produced before both the lower authorities and hence, indexed cost of acquisition of Rs.11,54,887/- be directed to be allowed while computing the long term capital gains.

Rejecting brokerage paid of Rs.1,91,012/- on purchase of new property: D) 4. The Ld. CIT(A) erred in not allowing brokerage of Rs.1,91,012/- paid to M/s Sagar Estate & Consultant towards purchase of new property without appreciating that supporting bill of brokerage including service tax was duly filed before the lower authorities and no further details were called for and the payment is duly made by account payee cheque and hence the disallowance of brokerage paid against purchase of new property while computing long term capital gains is without any justification and liable to be deleted. E) Rejecting cost incurred for purchase of new property:

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ITA No.6476/Mum/2019 AY. 2015-16 4 Shri Sajal Radhikamohan kar Vs. ACIT, Circle-27(3) 4. The assesse being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. Before us, the assessee has assailed the observation of the CIT(A) that the transaction of sale of the property in question was liable to be assessed in the hands of the assessee‟s HUF, viz. Sajal Kar, HUF. Also, the asessee is aggrieved with the dislodging of his working of LTCG arising from the transaction of sale of the property in question. 5. We shall first take up the grievance of the assessee that the CIT(A) had erred in concluding that the LTCG on sale of the property in question, viz. Duplex house no. G-6, Building No. 9, Ganga Estate Co-operative Housing Society Limited, Chembur, Mumbai, was liable to be brought to tax in the hands of Sajal Kar, HUF, and not in the hands of the assessee. Brief facts leading to the controversy in hand are that the assessee‟s HUF, viz. Sajal kar (HUF) had vide an „agreement for sale‟, dated 02.12.1985 purchased the property in question viz. Duplex house no. G-6, Building No. 9, Ganga Estate Co-operative Housing Society Limited, Chembur, Mumbai, for a consideration of Rs.4,75,000/- (copy of the registered purchase deed is placed at Page 5 to 23 of APB). The aforesaid HUF was partitioned vide a „declaration of release‟, dated 26.08.2002 and the property in question viz. Duplex house no.G-6, Building No. 9, Ganga Estate Co- operative Housing Society Limited, Chembur, Mumbai was released in favor of the assessee i.e Mr. Sajal Kar (copy of „declaration of release‟ is placed at Page 26-31 of APB). As stated by the ld. Authorized Representative (for short „A.R‟) for the assessee, the aforesaid property was thereafter transferred in the name of the assessee and was reflected as such in all the records. In order to buttress his aforesaid claim the ld. A.R had taken us through the records of the society, viz. Ganga Estate Cooperative Housing Society, which revealed that at the meeting of the general body managing committee of the society the transfer of the property in question in favor of the assessee was approved w.e.f 29.12.2002 and the shares which were earlier held by the erstwhile owner, viz. Sajal Kar, HUF

ITA No.6476/Mum/2019 AY. 2015-16 5 Shri Sajal Radhikamohan kar Vs. ACIT, Circle-27(3) were transferred in the share register in the name of the assessee. It was further stated by the ld. A.R that even in the registered sale deed, dated 20.02.2015, the assessee was shown as the seller of the property and no objection was either raised by the purchaser nor by any third party. In the backdrop of the aforesaid facts, it was the claim of the ld. A.R that the assessee since 26.08.2002 pursuant to the „declaration of release‟ was the owner of the property in his new capacity. Taking us through the genesis of the controversy in hand, it was submitted by the ld. A.R that the CIT(A) had observed that the aforementioned property was purchased by the assessee HUF, viz. Sajal Kar, HUF vide a registered purchase agreement, dated 02.12.1985 and not by the assessee in his status as that of an individual. It was observed by the CIT(A) that though the assessee had claimed that pursuant to the „declaration of release‟, dated 26.08.2002, the aforesaid property was released in his favor, however, as there was only a partial partition of the HUF, therefore, the vesting of the said property pursuant to such arrangement was had no sanctity in the eyes of law. Also, the claim of the assessee that the rights, title, interest, claim and benefit in the aforementioned property was vested with him pursuant to a family arrangement too was not accepted by the CIT(A). It was observed by the CIT(A), viz. (i) that as per Sec. 171 of the Act there could be no partial partition of a HUF after 31.12.1978; and (ii) that in the absence of any registration of the transfer transaction the claim of the assessee that the property in question got vested with him pursuant to a family arrangement being devoid and bereft of any force of law could not be accepted. In order to fortify his aforesaid conviction, it was observed by the CIT(A) that as per Sec. 171(1) of the Act a HUF hitherto assessed as undivided shall be deemed for the purposes of the Act to continue to be a HUF, except where and insofar a finding of partition has been given under this section in respect of the said HUF. Also, it was observed by the CIT(A) that the A.O as per sub-section (2) and sub-section (3) of Sec. 171 remained under an obligation to make an inquiry concerning any claim of total or partial partition of the HUF. It

ITA No.6476/Mum/2019 AY. 2015-16 6 Shri Sajal Radhikamohan kar Vs. ACIT, Circle-27(3) was further observed by the CIT(A) that as per the mandate of Sec. 171(9) of Act, as there could not be a partial partition of a HUF after 31.12.1978, therefore, in case of a partial partition the HUF was to be assessed as if no such partition had taken place. Further, rebutting the assessee‟s claim as regards the „declaration of release‟, it was observed by the CIT(A) that the same was only confined to the aforementioned property in question and no other assets of the HUF viz. cash, bank accounts, jewellery, vehicle, land, title, loan etc. were therein considered. On the basis of his aforesaid deliberations, the CIT(A) concluded that as there was no lawful partition of the HUF, therefore, it remained the owner of the property in question, viz. Duplex house no. G-6, Building No. 9, Ganga Estate Co-operative Housing Society Limited, Chembur, Mumbai. Backed by his aforesaid deliberations, the CIT(A) concluded that the assessee had wrongly returned the LTCG arising from the sale of the property in question in his individual hands. Alternatively, the CIT(A) also rejected the assessee‟s claim that the property in question was released in his favor on the basis of a family arrangement. It was observed by the CIT(A) that a partition flowing as a result of a family arrangement or settlement was also covered by the provisions of Sec. 171 of the Act. Backed by his aforesaid observations, the CIT(A) being of the view that the property in question was a HUF property and the assessee had no right to declare capital gains on the transfer of the same in his individual hands, therefore, directed the A.O to initiate the relevant proceedings in the hands of the right person i.e the HUF. It was submitted by the ld. A.R that the CIT(A) after observing as hereinabove, had concluded, that the assessment of the LTCG in the hands of the assessee would partake the character of an assessment on a protective basis till the issue was settled by a higher judicial forum. 6. Rebutting the aforesaid observations of the CIT(A), it was submitted by the ld. A.R that as the HUF had never been assessed under the Income-tax Act, therefore, the provisions of Sec. 171 of the Act could not have been invoked. In

ITA No.6476/Mum/2019 AY. 2015-16 7 Shri Sajal Radhikamohan kar Vs. ACIT, Circle-27(3) order to buttress his aforesaid claim the ld. A.R. had taken us through the relevant provisions of Sec. 171 of the Act.

“Assessment after partition of a Hindu undivided family. 171. (1) A Hindu family hitherto assessed as undivided shall be deemed for the purposes of this Act to continue to be a Hindu undivided family, except where and in so far as a finding of partition has been given under this section in respect of the Hindu undivided family.

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(2) Where, at the time of making an assessment under section 143 or section 144, it is claimed by or on behalf of any member of a Hindu family assessed as undivided that a partition, whether total or partial, has taken place among the members of such family, the "[Assessing] Officer shall make an inquiry therein to after giving notice of the inquiry to all the members of the family. (3) On the completion of the inquiry, the [Assessing] Officer shall record a finding as to whet her there has been a total or partial partition of the joint family property, and, if there has been such a partition, the date on which it has taken place. (4) Where a finding of total or partial partition has been recorded by the [Assessing] Officer under this section, and the partition took place during the previous year, - (a) the total income of the joint family in respect of the period up to the date of partition shall be assessed as if no partition had taken place; and (b) each member or group of members shall, in addition to any tax for which he or it may be separately liable and not withstanding any thing contained in clause (2) of section 10, be jointly and severally liable for the tax on the income so assessed. (5) Where a finding of total or partial partition has been recorded by the [Assessing] Officer under this section, and the partition took place after the expiry of the previous year, the total income of the previous year of that joint family shall be assessed as if no partition had taken place; and the provisions of clause (b) of sub-section (4) shall, so far as may be, apply to the case. (6) Notwithstanding anything contained in this section, if the [Assessing] Officer Finds after completion of the assessment of a Hindu undivided family that the family has already effected a partition, whether total or partial, the "[Assessing] Officer shall proceed to recover the tax from every person who was a member of the family before the partition, and every such person shall be jointly and severally liable for the tax on the income so assessed. (7) For the purposes of this section, the several liability of any member or group of members thereunder shall be computed according to the portion of the joint family property allotted to him or ii at the partition, whether total or partial. (8) The provisions of this section shall, so far as maybe, apply in relation to the levy and collection of any penalty, interest, fine or other sum in respect of any period up to date of the partition, whether total or partial, of a Hindu undivided family as they apply in relation to the levy and collection of tax in respect of any such period. (9) Notwithstanding anything contained in the foregoing provisions of this section, where a partial partition had taken place alter the 31st day of

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December, 1978, among the member of a Hindu undivided family hitherto assessed as undivided, — (a) no claim that such partial partition has taken plate shall be inquired into under sub- section (2) and no finding shall be recorded under subsection (3) that such partial partition had taken place and any finding recorded under sub-section (3) to that effect whether before or after the 18th day of June, 1980, being the date of introduction of the Finance (No. 2) Bill, 1980, shall be nail and void; (b) such family shall continue to be liable to be assessed under this Act as if no such partial partition had taken place; (c) each member or group of members of such family immediately before such partial partition and the family shall be jointly and several Liable for any tax, penalty, interest, fine or other sum payable under this An by the family in respect of any period, whether before or after such partial partition; (d) the several liability of any member or group of members aforesaid shall be computed according to the portion of the joint family properly allotted to him or it at such partial partition. and the provisions of this Act shall apply accordingly.] Explanation. – In this section, — (a) "partition" means — (i) where the property admits of a physical division, a physical division of the property, but a physical division of the income without a physical division of the property producing the income shall not be deemed to be a partition, or (ii) Where the properly does not admit of a physical division, then such division as the property admits of, but a mere severance of status shall not be deemed to be a partition; (b) “partial partition" means a partition which is partial as regards the persons constituting the Hindu undivided family, or the properties belonging to the Hindu undivided family, or both.” In our considered view, as stated by the ld. A.R, and rightly so, the provisions of sub-section (1) and sub-section (9) of Sec. 171 of the Act would stand invoked only in a case of a HUF hitherto assessed as undivided. Before us, it is the claim of the ld. A.R that as the HUF in question, viz. Sajal Kar, HUF had at no stage been assessed under the Act, therefore, the provisions of Sec. 171 of the Act as had been invoked by the CIT(A) would not come into play. On being queried as

ITA No.6476/Mum/2019 AY. 2015-16 10 Shri Sajal Radhikamohan kar Vs. ACIT, Circle-27(3) to whether or not the HUF in question, viz. Sajal Kar, HUF was assessed under the Act, the ld. D.R answered in the negative. In the backdrop of the aforesaid factual matrix, we concur with the claim of the ld. A.R that as the HUF in question, viz. Sajal Kar, HUF was not hitherto assessed under the Act, therefore, the provisions of Sec. 171 of the Act would not stand triggered. In sum and substance, as the assessee‟s HUF, viz. Sajal Kar, HUF had not been hitherto assessed under the Act, therefore, it could not have been brought within the realm of the provisions of Sec. 171 of the Act. Our aforesaid conviction is supported by the judgment of the Hon‟ble High Court of Gujarat in the case of CIT Vs. Kantilal Ambalal (HUF) (1991) 192 ITR 376 (Guj) and that of the Hon‟ble High Court of Andhra Pradesh in the case of Addl. CIT Vs. P. Durgamma (1987) 166 ITR 776 (AP). Also, by relying on the aforesaid judicial pronouncements the Hon‟ble High Court of Punjab and Haryana in the case of Tirlochan Singh Vs. CIT & Anr. (2009) 316 ITR 39 (P&H) had taken a similar view. Backed by the aforesaid facts r.w the settled position of law, we are of the considered view that the observations of the CIT(A) that the property in question despite the „declaration of release‟, dated 26.08.2002 would continue to be owned by the HUF, viz. Sajal Kar, HUF, cannot be accepted. Accordingly, we vacate the order of the CIT(A) to the extent he had concluded that the transaction of transfer of the property in question was liable to be assessed in the hands of the Sajal Kar, HUF and not in the hands of the assessee before us. 9. We shall now take up the claim of the assessee that the CIT(A) had wrongly restricted the assessee‟s claim for deduction u/s 54 of the Act to 50% of the investment made by him towards purchase of the new property. Briefly stated, the assessee had during the year under consideration sold a residential property, viz. Duplex house no. G-6, Building No. 9, Ganga Estate Co-operative Housing Society Limited, Chembur, Mumbai. Thereafter, the assessee had made an investment towards purchase of a new residential house, viz. Flat No. 1204

ITA No.6476/Mum/2019 AY. 2015-16 11 Shri Sajal Radhikamohan kar Vs. ACIT, Circle-27(3) and 1205, 12th Floor, Mamta Deep Height, H.P Nagar West, Chembur Mahul Road, Chembur, Mumbai 400 074, Maharashtra. During the course of the assessment proceeding, it was, inter alia, observed by the A.O that while for the assessee had raised a claim for deduction u/s 54 of the Act amounting to Rs.1,71,53,207/-, however, the investment in the new residential house was of Rs.1,59,41,620/-. Accordingly, the A.O restricted the assessee‟s claim for deduction u/s 54 to the aforementioned amount of Rs.1,59,41,620/-. 10. On appeal, the CIT(A) observed that as the new residential property viz. Flat No. 1204 and 1205, 12th Floor, Mamta Deep Height, H.P Nagar West, Chembur Mahul Road, Chembur, Mumbai 400 074, Maharashtra was jointly purchased by the assessee alongwith his wife Mrs. Manju Sajal Kar, therefore, he being only 50% owner of the new residential property would thus be eligible for claim of deduction u/s 54 of the Act only to the said extent. Accordingly, the CIT(A) restricted the assessee‟s claim for deduction u/s 54 of the Act to 50% of the investment made in the new residential property. As the CIT(A) had observed that the LTCG on the sale of the property was to be assessed in the hands of the HUF, therefore, backed by his aforesaid observation he directed the A.O to consider the said claim for deduction too in the hands of the assessee on a protective basis. 11. Before us, it is the claim of the ld. A.R that as the source of the investment in the new property was made to the last of paisa by the assessee, therefore, the CIT(A) had wrongly restricted the assessee‟s claim for deduction u/s 54 to 50% of the investment that was made by him towards purchase of the new residential house. It was submitted by the ld. A.R that though the new property was jointly purchased by the assessee along with his wife, viz. Mrs Manju Sajal Kar, however, considering the fact that the entire investment in the new residential property was made by the assessee, the same, thus would have no bearing on his claim for deduction u/s 54 of the Act. In support of his aforesaid contention

ITA No.6476/Mum/2019 AY. 2015-16 12 Shri Sajal Radhikamohan kar Vs. ACIT, Circle-27(3) the ld. A.R had relied on the order of the ITAT, „SMC‟ Bench, Hyderabad in the case of Smt. Bobba Anitha Vs. ACIT, Circle 6(1), Hyderabad in ITA No. 1863/Hyd/2019. It was submitted by the ld. A.R that the Tribunal in its aforesaid order had relied on the judgment of the Hon‟ble High Court of Delhi in the case of CIT Vs. Kamal Wahal (2013) 30 taxman.com 34 (Del). Also, in order to substantiate his claim that the entire investment towards purchase of the new residential property was made by the assessee out of his own funds, the ld. A.R had taken us through the bank account of the assessee, viz. A/c No. 10682010035940 with Oriental Bank of Commerce, Mumbai. Our attention was also drawn by the ld. A.R towards the copy of the registered “agreement for sale” qua the new property that was purchased by the assessee. 12. Per contra, the ld. D.R relied on the orders of the lower authorities. 13. We have heard the ld. authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the ld. A.R to drive home his aforesaid claim. Admittedly, it is a matter of fact borne from the record that the new residential property viz. Flat No. 1204 and 1205, 12th Floor, Mamta Deep Height, H.P Nagar West, Chembur Mahul Road, Chembur, Mumbai 400 074, Maharashtra, as regards which claim for deduction u/s 54 had been raised was jointly purchased by the assessee along with his wife viz. Mrs. Manju Sajal Kar. In our considered view, no infirmity arises from the order of the CIT(A) who taking cognizance of the aforesaid fact of joint ownership of the new residential property had restricted the assessee‟s claim for deduction u/s 54 of the Act to 50% of the total investment therein made. On a perusal of Sec. 54 of the Act, we find that the same specifically contemplates the purchase/construction of the new residential house within a stipulated time period by the assessee. As such, we concur with the view taken by the CIT(A) that though the investment in the new residential property was made by the

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assessee, however, as the same was jointly purchased in the name of the assessee and his wife, therefore, the assessee‟s claim for deduction u/s 54 was liable to be restricted to the extent of his ownership in the property in question i.e 50% of the investment therein involved. Our aforesaid conviction is supported by the judgment of the Hon‟ble High Court of Bombay in the case of Prakash Vs. Income Tax Officer & Ors. (2009) 312 ITR 40 (Bom). In the aforesaid case the following question of law was inter alia raised before the Hon‟ble High Court :

“3. Whether for qualifying for exemption under s. 54F of the IT Act is it necessary and obligatory to have investment made in residential house in the name of assessee only or investment in residential house is enough to qualify and claim the said exemption ?” (emphasis supplied by us) Answering the aforesaid question of law, it was observed by the Hon‟ble High Court, as under :

“8. The relevant portion of s. 54F of the IT Act is as under :

"54F. Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house.—(1) Subject to the provisions of sub-s. (4), where, in the case of an assessee being an individual or an HUF the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereinafter in this section referred to as the original asset), and the assessee has, within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house (hereinafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say— (a)............. (b) ............. Provided that nothing contained in this sub-section shall apply where— (a) the assessee,— (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or (ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or

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(iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and (b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head "Income from house property". Explanation : For the purpose of this section,— "net consideration", in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. (2)........... (3) Where the new asset is transferred within a period of three years from the date of its purchase or, as the case may be, its construetion, the amount of capital gain arising from the transfer of the original asset not charged under s. 45 on the basis of the cost of such new asset as provided in cl. (a) or, as the case may be, cl. (b), of sub-s. (1) shall be deemed to be income chargeable under the head "Capital gains" relating to long-term capital assets of the previous year in which such new asset is transferred." 9. The term "assessee" is defined in s. 2(7) of the IT Act, which is as under : "assessee" means a person by whom any tax or any other sum of money is payable under this Act, and includes— (a) every person in respect of whom any proceeding under this Act has been taken for the assessment of his income or assessment of fringe benefits or of the income of any other person in respect of which he is assessable, or of the loss sustained by him or by such other person, or of the amount of refund due to him or to such other person; (b) every person who is deemed to be an assessee under any provision of this Act; (c) every person who is deemed to be an assessee in default under any provision of this Act;’ 10. Sec. 54F refers to the assessee being an individual or an HUF. Importantly, both are different legal entities. As per the scheme of these sections of the IT Act, the assessee, who is the owner of the original asset, need to, within a period of one year before or two years after the date on which the transfer took place, purchase or within a period of three years after that date construct a residential house (new asset). The capital gain shall be dealt with in accordance with the other parts of the section. 11. The concepts of the "assessee", "own", "owned" "owner", "ownership", "co- owner", "owner of house property" or "ownership of property" as elaborated in

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ss. 22 to 27 and 32 of the IT Act, are very much inter-linked and connected for granting the benefit under the IT Act. The word and phrase "owner" in the context of s. 22 of the IT Act has been elaborated in CIT vs. Podar Cement (P) Ltd. Etc. (1997) 141 CTR (SC) 67 : (1997) 226 ITR 625 (SC); and Mysore Minerals Ltd. vs. CIT (1999) 156 CTR (SC) 1 : (1999) 239 ITR 775 (SC). An assessee must have valid title legally conveyed to him after complying with the requirement of law or at least entitled to receive income from the property in his own right and have control and domain over the said property for all the legal purposes, which basically excluding a third person of any right over the said property. Therefore, all these concepts are inter-linked. The scheme and purpose of s. 54F, which was inserted by the Finance Act, 1982, w.e.f. 1st April, 1983, i.e., from the asst. yr. 1983-84 is with a view to encourage house construction. The object, therefore, is to give all benefits under this section to the assessee on conditions as elaborated in the section. No such benefit is available to a person other than the assessee. It also means the assessee must comply with the conditions strictly as per this provision in all respects. As noted, this exemption will not be available in case where the assessee owns, on the date of transfer of the original asset, any residential house or purchases within the period of one year, after such date or constructs within a period of three years after such date any other residential house. Where an assessee purchases or constructs any other residential house within the period of the aforesaid exemption under the proposed provision, if allowed, shall stand forfeited. The amount of capital gain arising from the transfer of the original asset which was not charged to taxes shall be allowed to be income chargeable under the head "capital gain" relating to long-term capital assets of the previous year in which such residential house is so purchased or constructed. Furthermore, if an assessee transfers newly acquired residential house within three years of its purchase or construction, then the amount of capital gain arising from the transfer of original asset, which was not charged to tax, shall be deemed to be the income of the year in which the new asset is transferred and the said income shall be charged to tax under the head of capital gains relating to the long-term capital assets [(1982) 31 CTR (TLT) 12 : (1982) 138 ITR (St) 10)] (Departmental Circular No. 346, dt. 30th June, 1982). 12. It is, therefore, clear that the purpose is to give this benefit on the ownership of one residential house only by the assessee and to encourage to have one residential house of the assessee. Therefore, right from the sale of original asset till the purchase and/or construction of the residential house i.e., the "new asset", the ownership and domain over the new asset is a must. The new property must be owned by the assessee and/or having legal title over the same. The others may use and occupy the same along with the assessee but the ownership should be of the assessee of the residential house so purchased from the net consideration/sale proceeds of the sale of original asset by the assessee. 13. Having observed above and in view of the undisputed position on the record that the deceased assessee, admittedly, though sold the property owned by him yet purchased the new property in the name of adopted son and paid consideration out of the sale proceeds in question, with clear intention to transfer the property to the adopted son. He, therefore, utilised the sale proceeds to construct a house by transferring the property and submitting plan in the name of the son only. The intention was very clear from the day one to transfer the property even before the construction of residential house to the

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adopted son. He transferred the property before the prescribed period, as per the scheme of section, and the son becomes the owner of the property for all the purposes. The deceased/assessee, admittedly, had no domain and/or right whatsoever on the said property. This fact itself, therefore, disentitled him to claim any exemption as there were various non-compliances of the conditions as per the scheme of ss. 54 and 54F of the IT Act as mentioned above. 14. The strong reliance was placed on the following decisions by the appellant. In Late Mir Gulam Ali Khan By LR Mrs Noor Begum vs. CIT (1986) 56 CTR (AP) 144 : (1987) 228 ITR 165 (AP) the Andhra Pradesh High Court has granted exemption under s. 54 of the IT Act and observed as under : "Relying upon the expression "assessee" occurring in s. 54 of the Act, it is contended for the Department that in order to claim the exemption, the person who sold the house must be the same as the person who purchased the house, that is, the assessee must be one and the same person. The identity must be the same. We are unable to accept this contention. The object of granting exemption under s. 54 of the Act is that a person who sells a residential house for the purpose of purchasing another convenient house must be given exemption so far as capital gains are concerned. As long as the sale of the house and purchase of another house are part of the same scheme, the lapse of some time between the sale and purchase makes no difference. The word "assessee" must be given a wide and liberal interpretation so as to include his legal heirs also. There is no warrant for giving too strict an interpretation to the word "assessee" as that would frustrate the object of granting the exemption and what is more, in the instant case, the very same assessee immediately after the sale of the house, entered into an agreement for purchasing another house and paid a sum of Rs. 1,000 as earnest money and subsequently the legal representative completed the transaction within a period of one year from the date of the death of the deceased. The sale and purchase are two links in the same chain. We are fortified in this view by a decision of the Madras High Court in C.V. Ramanathan vs. CIT (1980) 17 CTR (Mad) 322 : (1980) 125 ITR 191 (Mad)." We are not inclined to accept the liberal view to the word "assessee" in Late Mir Gulam Ali Khan (supra) for the reason already recorded in the above paras. The scheme of s. 54F is clear. The facts are different here. 15. The deceased assessee admittedly sold and purchased the property from the realisation but in the name of the adopted son, who in the scheme of the Act and s. 54F is not an assessee, who after selling the old asset purchased and constructed the new property. He was not the owner of the new purchased property. In Ponds India Ltd. (Merged with H.L. Ltd.) vs. Commr. of Trade Tax JT 2008 (9) SC 94, the apex Court’s following declaration supports the view we have taken based upon the principle of interpretation of revenue/taxation statutes : "39. When a case of obvious intent on the part of the legislature is made out, a meaning which subserves the legislative intent must be given effect to. It is however also well known that when a word is

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defined by the legislature itself, the same meaning may be attributed even in the changed situation." 16. In this background, the submission with regard to the principle of benami transaction based upon the Supreme Court judgments in Bhim Singh (dead) by LRs & Anr. vs. Kan Singh AIR 1980 SC 727 and CED vs. Aloke Mitra (1980) 19 CTR (SC) 367 : AIR 1981 SC 102, are unacceptable. The intention, as well as, transaction on record makes the position very clear. In no way this can be said to be a benami transaction. The facts and circumstances are totally distinct and distinguishable of the judgments cited by the learned counsel appearing for the assessee in all respects. 17. In light of above, the reasoning given by the Tribunal by maintaining the order passed by the AO, needs no interference. The reasonings, as given, are as under : "8 .....A plain reading of s. 54F would show that it is the assessee who has to invest the capital gain in the new construction of a residential house in his name. The expression that the assessee has purchased or constructed a new asset in sub-s. (1) would only mean that the new asset has to be in the name of the assessee. The proviso to sub-s. (1) makes the position very clear inasmuch as it says that the assessee shall not own any residential house on the date of transfer or purchase a residential house within 1 year of the transfer or construct residential within a period of 3 years, other than the new asset. Thus, reading of sub-s. (1) together with the proviso would show that the investment in the new asset by the assessee has to be in his own name and not in the name of any other person. The legal consequences of purchase of the new asset by assessee in the name of his son is to constitute his son as the beneficial owner of the new asset. The assessee has, therefore, not made the investment in this name. Therefore, he has rendered himself liable to pay tax on capital gains arising out of the transfer of a capital asset. 9......... 10. In all the above case, it will be significant to note that the issue was never regarding purchase of the new asset in the name of other person. Death during the period within which the new asset had to be acquired was an intervening event in some cases. The distinction between a legal heir and an heir apparent in law is very significant. An heir apparent succeeding to the estate of a prepositus is dependent on the fact of his surviving the prepositus. Death is a certain event but who will die first is not a certain event. This is the reason why law regards transfer by a heir apparent of his chance of succession as non- transferable under s. 6 of the Transfer of Property Act. 11. .....In the present case, the assessee has not made any such claim. In the affidavit filed before the AO he had admitted that his son is the beneficial owner of the property and the investment was made in his name in view of the fact that he is 86 years old and that he was counselled to do so. Thus, on facts and circumstances of this case, we

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are of the view that the decision of the Madras Tribunal is also distinguishable." 18. In view of the above reasons, we answer the substantial questions of law framed by this Court in the appeal as under : Question No. 1 . ....Yes : We hold that the appeal filed before the Tribunal on 1st May, 1988, is competent. It was arising out of the asst. yr. 1983-84. The Department had issued notice under s. 139(2) of the Act calling upon the assessee (Timaji Dhanjode) who had filed his return; who was alive at the relevant time. The AO held that the investment by the deceased assessee in the name of his adopted son not calling for an exemption and, therefore, demanded capital gains tax. Against the order, the appeal filed by the deceased was allowed on 25th Jan., 1989 and after remand, CIT(A) reversed the order of AO on 11th Feb., 1998, therefore, the Department appeal dt. 1st May, 1998, against the same, even after the death of the assessee on 9th May, 1991, against the appellant being the only legal heir, is maintainable. Question No. 2 . ..No : The appellant does not qualify for the exemption under s. 54F of the IT Act. Question No. 3 ....Yes : For qualifying the exemption it is necessary and applicable (sic) to have the investments made in residential house in the name of the assessee only. The appeal is dismissed accordingly. 19. For the above reasons, the proceedings under s. 156 of the IT Act as initiated and proceedings under s. 221 and s. 271(1)(a) of the IT Act cannot be said to be bad in law, illegal or violative of any constitutional and/or legal right. The writ petition filed by the petitioner being an adopted son of the deceased assessee is, therefore, dismissed. Interim relief, so granted, also stands vacated. However, a liberty is granted to the appellant/petitioner to take steps, if any, in accordance with law. Both the matters are dismissed with order as to costs.” The aforesaid order of the Hon‟ble High Court of Bombay had thereafter been followed by the ITAT, Bench “Tribunal in case of Mrs. Niharika M. Jhangiani (L/heir of late Mrs. Bina B. Ramchandani) Vs. Addl. CIT 21(3), Mumbai, ITA No. 7208/Mum/2011, dated 13.01.2017. Accordingly, backed by our aforesaid observations we find no infirmity in the view taken by the CIT(A), who in our considered view had rightly restricted the assessee‟s claim for deduction u/s 54

ITA No.6476/Mum/2019 AY. 2015-16 19 Shri Sajal Radhikamohan kar Vs. ACIT, Circle-27(3) to the extent of 50% of the investment mad by the assessee in the new residential property. The Ground of appeal No. 2 is dismissed. 14. We shall now take up the grievance of the assessee that the CIT(A) had erred in rejecting his claim of having incurred an additional cost of Rs.1,50,000/- with respect to the aforesaid property, viz. Duplex house no. G-6, Building No. 9, Ganga Estate Co-operative Housing Society Limited, Chembur, Mumbai in the year 1985, and thus, had wrongly declined his resultant claim for deduction of the indexed „cost of improvement‟ of Rs.11,54,887/-.It was submitted by the ld. A.R that the assessee had incurred additional expenses for providing amenities in the Duplex Flat (including garden) which was duly substantiated before the lower authorities on the basis of a letter dated 5th December, 1985. Our attention was drawn by the ld. A.R to the aforesaid letter dated 5th, December, 1985 (copy placed at Page 24 of the APB). It was submitted by the ld. A.R, that as stated in the aforesaid letter, the assessee had incurred an amount of Rs.1,50,000/- towards providing of various amenities qua the property in question i.e towards wiring, plumbing, wooden flooring, bathroom fittings, glass tables, internal staircase etc. As such, it was submitted by the ld. A.R that now when it remains as a matter of fact borne from the records that the assessee had incurred expenses qua the property in question, therefore, the same were to be considered for computing the assessee‟s income under the head LTCG on sale of the said property. 15. Per contra, ld. D.R. relied on the orders of the lower authorities. 16. We have heard the ld. Authorized Representatives for both the parties, perused the orders of the lower authorities and the material available on record in context of the issue in question. As observed by us herein above, the solitary basis to support the claim that the assessee had incurred an amount of Rs.1,50,000/- towards providing of various amenities as regards the property in

ITA No.6476/Mum/2019 AY. 2015-16 20 Shri Sajal Radhikamohan kar Vs. ACIT, Circle-27(3) question is a letter dated 5th December, 1985 [copy placed at Page 24-25 of APB]. Although, we are principally in agreement with the ld. A.R that now when the aforesaid expenditure was incurred by the assessee towards value addition of the property in question, therefore, there would be no justification for the lower authorities to have discarded the same while computing the LTCG arising on the sale of the said property. However, we find a serious infirmity in the aforesaid claim of the assessee. On a perusal of the aforementioned letter dated 5th December, 1985, an illegible copy of which has been placed on our record, we find, that the contents discernible therefrom does not inspire much of confidence as regards the genuineness of the aforesaid claim of the assessee. On a perusal of Page 24 i.e front side of the letter dated 5th December, 1985, we find that there is a stamp embossed as under: “……………….Construction Company 29 JUNE, 1982.” We are unable to comprehend as to how a letter dated 5th, December, 1985 would have an embossing dated “29th JUNE, 1982”. Apart from that, we find that Page 25 (backside of the letter) dated 5th December, 1985 clearly states that the same had been confirmed by the assessee, viz. Shri Sajal Kar at Bombay on “5th Day of June, 1985”. On a careful perusal of the aforesaid letter, we find that the date 5th Day of June, 1988 appears not only in the typed version but also is found to have been hand written. Although, the document is illegible, however, the same is claimed to have been notarised on 5th June, 1988. In the backdrop of the aforesaid serious doubts which are apparently glaring on the very face of the aforesaid document, we are of the considered view that the same would require verification on the part of the A.O. Accordingly, we herein direct the assessing officer to call for the original document and make necessary verifications as regards the authenticity of the same. In case the aforesaid document is found to be in order, then, as observed by us hereinabove the assessee would be entitled to claim deduction as regards the expenditure that was incurred towards the

ITA No.6476/Mum/2019 AY. 2015-16 21 Shri Sajal Radhikamohan kar Vs. ACIT, Circle-27(3) additions/improvements made to the property in question and thus, would be eligible for the consequential indexed „cost of improvement‟ while computing of his income under the head LTCG. The Ground of appeal No. 3 is allowed for statistical purposes in terms of our aforesaid observations.

ITA No.6476/Mum/2019 AY. 2015-16 22 Shri Sajal Radhikamohan kar Vs. ACIT, Circle-27(3) reflected. Also, the ld. A.R had drawn our attention to the copy of a Bill No. 5/2015, dated 05.05.2015 that was raised on the assessee by the aforesaid broker, viz. M/s Sagar Estate & Consultant in respect of the transaction of purchase of Flat No. 1204 and 1205, 12th Floor, Mamta Deep Height, H.P Nagar West, Chembur Mahul Road, Chembur, Mumbai 400 074, Maharashtra. It was submitted by the ld. A.R that as the payment to the aforementioned broker was proved to the hilt on the basis of irrefutable documentary evidence, therefore, the CIT(A) had wrongly declined to consider the said expenditure that was incurred by the assessee for purchase of the aforesaid residential property and considered by him while quantifying his claim for deduction u/s 54 of the Act. 18. Per contra, the ld. D.R relied on the orders of the lower authorities. 19. We have heard the ld. Authorized Representatives for both the parties, perused the orders of the lower authorities and the material available on record in context of the issue in question. As observed by us hereinabove, the fact that the assesse had paid brokerage charges of Rs.1,91,012/- qua the purchase of the new residential property viz. Flat No. 1204 and 1205, 12th Floor, Mamta Deep Height H.P Nagar West, Chembur Mahul Road, Chembur, Mumbai 400 074, Maharashtra, stands substantiated to the hilt as per the Bill No. 5/2015, dated 05.05.2015, as well as the bank account of the assessee i.e a/c no. 10682010035940 with Oriental Bank of Commerce, Branch: Chembur, Mumbai. In our considered view, now when the aforesaid claim of the assessee of having incurred the aforementioned expenses in respect of purchase of the new residential property stands proved to the hilt, therefore, there was no justification on the part of the CIT(A) to have not considered the same as a part of the „cost of acquisition‟ of the new residential property that was purchased by the assessee while quantifying his claim for deduction u/s 54 of the Act. Accordingly, not finding favor with the view taken by the CIT(A), we herein set-aside the same and direct the A.O to consider the brokerage expenses of Rs.1,91,012/-(supra) while

ITA No.6476/Mum/2019 AY. 2015-16 23 Shri Sajal Radhikamohan kar Vs. ACIT, Circle-27(3) computing the assessee‟s claim for deduction u/s 54 of the Act. Before parting, we may herein observe that as we have held that the assessee‟s claim for deduction u/s 54 of the Act is to be restricted to the extent of 50% of the total investment, therefore, as a consequence thereto the entitlement of the assessee towards claim for deduction of the aforesaid amount of brokerage expense would also stand restricted to the said extent i.e 50% of Rs.1,91,012/-. The Ground of appeal No. 4 is partly allowed in terms of our aforesaid observations. 20. We shall now take up the claim of the assessee that the CIT(A) had erred in not allowing the cost of Rs.10,20,575/- that was incurred by the assessee towards purchase of property, viz. (i) VAT: Rs.1,50,000/-; (ii) Service tax: Rs.5,68,560/- (Rs.5,56,200/-(+) Rs.12,360/-); and (iii) Extra work done: Rs.3,02,015/-. It was submitted by the ld. A.R that the assessee had after purchasing the aforementioned new residential property, viz. Flat No. 1204 and 1205, 12th Floor, Mamta Deep Height, H.P Nagar West, Chembur Mahul Road, Chembur, Mumbai 400 074, Maharashtra, incurred an amount of Rs.3,02,015/- (to make the property habitable). In order to buttress his aforesaid claim the ld. A.R had drawn our attention to two „Invoices‟ issued by M/s Ganesh Enterprises, viz.(i). Invoice no. 14, dated 05.06.2015 for Rs. 1,81,546/-; and (ii). Invoice no. 16, dated 25.06.2015 for Rs.1,20,470/-. It was submitted by the ld. A.R that the assessee had incurred expenses towards civil work with respect to the new residential property in order to make the same habitable. Backed by his aforesaid contention, it was submitted by the ld. A.R that the CIT(A) had erred in not considering the aforesaid expenditure that was incurred by the assessee as a part of the „cost of acquisition‟ of the new residential property while computing the assessee‟s claim for deduction u/s 54 of the Act. We have given a thoughtful consideration to the aforesaid claim of the assessee and are unable to persuade ourselves to accept the same. As per Sec. 54 of the Act, the deduction therein contemplated is to be determined considering the amount of the „capital gain‟

ITA No.6476/Mum/2019 AY. 2015-16 24 Shri Sajal Radhikamohan kar Vs. ACIT, Circle-27(3) arising from the sale of the old residential property that is utilized for purchase or construction of one residential house in India. In the case before us, the assessee had opted for availing the aforesaid deduction by purchasing a new residential property. As is discernible from the records, the new residential property, viz. Flat No. 1204 and 1205, 12th Floor, Mamta Deep Height H.P Nagar West, Chembur Mahul Road, Chembur, Mumbai 400 074, Maharashtra was purchased by the assessee vide registered purchase deed, dated 23.04.2015. In our considered view, the amount that would be eligible for claim of deduction in a case where the assessee has purchased the new residential house would the amount that was utilized for purchasing the same. As such, we hold a strong conviction that the amount utilized by the assessee after purchasing the new residential property would not fall within the realm of deduction contemplated u/s 54 of the Act. Accordingly, in the backdrop of our aforesaid deliberations, we are of the considered view that the assessee‟s claim for deduction in respect of the expenditure aggregating to Rs.3,02,015/- i.e the amount of expenditure that is claimed by the assessee to have been incurred subsequent to the purchase of the new residential property in question had rightly not been considered for the purpose of quantifying his claim for deduction u/s 54 of the Act. Insofar, the assessee‟s claim that though it had parted with an amount towards service tax aggregating to Rs.5,68,560/- and VAT of Rs.1,50,000/- qua the aforesaid transaction of purchase of the new residential property, however, the same had not been considered by the lower authorities for computing his claim for deduction u/s 54 of the Act, the ld. A.R had drawn our attention to Page 115-116 of the APB, which revealed that a payment of Rs.5,56,200/- vide receipt No. 224, dated 22.04.2015 and a payment of Rs.12,360/- vide receipt No. 227, dated 24.04.2015; is claimed to have been made to M/s Arjun Enterprises i.e the builders and developers. It was submitted by the ld. A.R that as the aforementioned payment towards „service tax‟ along with a payment towards VAT clearly added to the cost of acquiring the new residential house, viz. Flat No.

ITA No.6476/Mum/2019 AY. 2015-16 25 Shri Sajal Radhikamohan kar Vs. ACIT, Circle-27(3) 1204 and 1205, 12th Floor, Mamta Deep Height, H.P Nagar West, Chembur Mahul Road, Chembur, Mumbai 400 074, Maharashtra, therefore, the same were rightly included by the assessee for computing his investment made in purchase of the said new residential property. It was, thus, submitted by the ld. A.R that the matter be restored to the file of the A.O with a direction to consider the aforementioned amounts while computing the assessee‟s claim for deduction u/s 54 of the Act. 21. Per contra, the ld. D.R relied on the orders of the lower authorities. 22. We have heard the ld. Authorized Representatives for both the parties, perused the orders of the lower authorities and the material available on record in context of the issue in question. As observed by us hereinabove, the ld. A.R in order to substantiate his claim that the assessee had parted with amounts towards „service tax‟ and VAT for the purchase of the new residential house had drawn our attention to certain receipts issued by the developer, viz. M/s Arjun Enterprises. However, the fact as it so remains is that the aforesaid claim of the assessee cannot be safely gathered on a perusal of the aforementioned documents. Although, we are principally in agreement with the ld. A.R, and are of the considered view, that if the aforementioned amounts had been borne by the assessee qua the purchase of the new residential house, then, the same ought to have been considered as a part of the investment made by the assessee. Accordingly, in all fairness, we deem it fit to restore the issue to the file of the A.O who shall after making necessary verifications readjudicate the aforesaid claim of the assessee. The Ground of appeal No. 5 is partly allowed for statistical purposes in terms of our aforesaid observations. 23. We shall now take up the claim of the assessee that the CIT(A) had erred in disallowing the assessee‟s claim towards „cost of improvement‟ of the property that was incurred by him in the financial year 2003-04 for rendering it habitable.

ITA No.6476/Mum/2019 AY. 2015-16 26 Shri Sajal Radhikamohan kar Vs. ACIT, Circle-27(3) Before us, it was submitted by the ld. D.R that the assessee had in F.Y 2003-04 incurred expenses amounting to Rs. 11,87,418/- towards improvement of the property that was sold during the year under consideration, viz. Duplex house no. G-6, Building No. 9, Ganga Estate Co-operative Housing Society Limited, Chembur, Mumbai. It was submitted by the ld. A.R that though the A.O had accepted the aforesaid claim of the assessee and considered the said amount while computing the LTCG on sale of the property under consideration, however, the CIT(A) had disallowed the said claim of deduction of the assessee, and resultantly, by so doing, had enhanced his income to the said extent. In order to substantiate his claim that the assessee had incurred expenses towards improvement of the property that was sold during the year under consideration, the ld. A.R submitted that the assessee had in the Financial year 2003-04 incurred expenses towards replacing wooden fittings, door repairs, double bed repair, shoe cabinet, wooden flooring, bathroom fittings, sanitary fittings, window shades, box grills, electrical fittings, sofa repairs, upholstery repairs, split air conditioner, dinning chairs, wall painting, wooden partitions, electric chimneys and cutlery cabinet, false ceiling, plaster repairs etc. It was submitted by the ld. A.R that the CIT(A) being of the view that the aforementioned expenses were in the nature of routine current repairs and not structural repairs which would lead to any improvement to the property in question, therefore, had concluded that the same were not to be considered as a part of the „cost of improvement‟ while computing the LTCG on the sale of the property in question. It was submitted by the ld. A.R that the declining on the part of the CIT(A) to consider the „cost of improvement‟ of Rs.11,87,418/- that was claimed by the assessee to have been incurred qua the property that was sold during the year under consideration, had thus, pursuant thereto resulted to an enhancement of the assessee‟s income as a result of rejection of his claim for deduction of the indexed „cost of improvement‟ of Rs.26,26,169/-. The ld. A.R in order to fortify his claim that expenses incurred by an assessee towards renovation of an existing house or

ITA No.6476/Mum/2019 AY. 2015-16 27 Shri Sajal Radhikamohan kar Vs. ACIT, Circle-27(3) those incurred for making it convenient for his use would duly form part of the improvement made to the said property relied on the order of the ITAT, Bangalore, in the case of ITA Vs. Shri Ramkrishna M.J., ITA No. 1326/Bang/2016, dated 22.09.2017; and that of the ITAT, Hyderabad Bench „A‟ in the case of Ms. Juveria Begum & Ors. Vs. ITO, Ward 14(2), Hyderabad, ITA No. 2224/Hyd/2018. On the basis of his aforesaid contentions, it was submitted by the ld. A.R that the expenses incurred by the assessee towards improvement of the property were duly eligible for being considered while computing the LTCG on the sale of the said property. 24. Per contra, the ld. D.R relied on the orders of the lower authorities. 25. We have heard the ld. Authorized Representatives for both the parties, perused the orders of the lower authorities and the material available on record in context of the issue in question. As is discernible from the order of the CIT(A), we find that it was the claim of the assessee that he had incurred the expenditure of Rs.11,87,418/- both towards the property in question, and also towards certain items which though were not attached to the property but facilitated the convenient use of the same. Insofar, the claim of the assessee that the expenses incurred towards repair/renovation and/or additions to the property under consideration is concerned, viz. replacement of wooden fittings, door repairs, wooden flooring, bathroom fittings, sanitary fittings, window shades, box grills, electrical fittings, split airconditioner, wooden partitions, electric chimneys, false ceiling, plaster repairs etc. are concerned, the same in our considered view are intrinsically used along with the property or in other words form part of the property itself. Accordingly, we find no justification as to why the assessee‟s claim for expenditure qua such items which form part of the property itself was not to be considered as an expenditure incurred by the assessee towards improvement of the property in question. At the same time, we are unable to accept the claim of the assessee that expenditure incurred by him towards

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double bed repair, shoe cabinet, box grills, sofa repairs, upholstery repair, split air conditioner, dining chairs, wall painting etc. were also to be allowed as a part of the expenditure incurred for improvement of the property. As the very nature of the aforesaid expenses so reveals, the same are clearly in the nature of items which can by no means be held as a part of the property but are in the nature of independent items which had been put to use by the assessee for a better enjoyment of the property under consideration. Insofar the aforesaid expenses are concerned, we concur with the view taken by the CIT(A) that the assesee could not have claimed the same as part of the expenditure incurred by him towards improvement of the property in question. We, thus, in terms of our aforesaid observations, modify the order passed by the CIT(A) and direct the A.O to give consequential effect to the same. The Ground of appeal No. 6 is partly allowed in terms of our aforesaid observations.

Order pronounced in the open court on 01.09.2021

Sd/- Sd/- (S. Rifaur Rahman) (Ravish Sood) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated: 01.09.2021 PS: Rohit

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Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file.

BY ORDER, //True Copy//

(Sr. Private Secretary) ITAT, Mumbai