SRINATH RAMAMURTY,MUMBAI vs. ASST CIT CIR 20(3), MUMBAI

ACIT Cir 20(3) Srinath Ramamurty 163, Falcons Crest, 73, G. Mumbai बनाम/ Pin- D. Ambedkar Marg, Parel Vs. Village, Mumbai-400 012 �थायीलेखासं./जीआइआरसं./PAN No. AEZPR7617H (अपीलाथ�/Appellant) (��थ� / Respondent) : अपीलाथ�कीओरसे/ Appellant by : Shri Jay Shah, AR ��थ�कीओरसे/Respondentby : Shri M. C. Omi Ningshen, DR सुनवाईकीतारीख/ : 31.05.2018 Date of Hearing घोषणाकीतारीख / : 23.08.2018 Date of Pronouncement आदेश / O R D E R

Per Sandeep Gosain, Judicial Member:

SrinathRamamurty 1. On the facts and circumstances of the case as well as in law, the Ld. CIT(A) had erred in not allowing the deduction of indexed cost of Fair Market value of property as on 1981 as per the valuation report, without considered the facts and circumstances of the case.

2. On the facts and circumstances of the case as well as in law, the Ld. CIT(A) had erred in confirming the action

of Ld. AO in not allowing the deduction of indexed cost of improvement of property amounting to Rs.

1,01,80,177/-, without considered the facts and circumstances of the case.

SrinathRamamurty sources’. The return of income for the year under considerationwas filed on 28.08.2012 declaring total income at Rs. 1,05,63,677 after claiming deduction of Rs. 1 lakh under chapter VI-A. The revised return was e-filed by the assessee on 07.12.12 declaring total income of Rs. 1,05,19,280 and the reason for filing revised return was the brought forward short term loss not adjusted in the original return. Later on, the case was selected for scrutiny and after serving statutory notices and seeking reply of the assessee, assessment order u/s. 143(3) of the I.T. Act, 1961 was passed by the AO thereby making additions on account of ‘Short Term Capital Gain’.

Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties,dismissed the appeal of the assessee.

Now before us, the assessee has preferred the present appeal by raising the above grounds.

Ground No. 1 3. This ground raised by the assessee has not been pressed, therefore the same becomes infructuous as not pressed.

SrinathRamamurty Ground No. 2 4. This ground raised by the assessee relates to challenging the order of Ld. CIT(A) in confirming the action of Ld. AO in not allowing the deduction of indexed cost of improvement of property amounting to Rs. 1,01,80,177/-.

SrinathRamamurty It was further argued that Coordinate Bench of Hon’ble ITAT in ITA No. 3429/Chen./16 for AY 2012-13 in the case of other co-owner SmtGayathri Ramamurthy has decided the said ground. The operative portion of the order of Hon’ble ITAT is contained in para no. 8.3 to 8.4 and the same is reproduced below:-

8.3 We have considered the rival submissions. The assessee claimed cost of improvement relating to the years 1981, 1996 and 2008. Since no documentary evidence was produced, the Assessing Officer rejected the claim of the assessee. Before the ld. CIT(A), the assessee has argued that nobody can apprehend an event which would be taking place after 20 or 30 years later with regard to maintaining the entire records towards cost of improvement made in the property. However, the ld. CIT(A) observed that the fact may be true but it is also not understandable as to how the assessee could figure out the exact amount of expenditure claimed have been incurred towards such renovation or expansion and opined that the genuineness and authenticity of the claim is highly doubtful.

SrinathRamamurty 8.4 At the same time, the ld. CIT(A) also observed that it will be highly unjustified to hold that not even single penny was expended on the renovation or expansion of the house during the entire period of 44 years. Therefore, in order to find out as what could be the amount of such expenditure, the ld. CIT(A) made a reference to the Sale Deed of the impugned property executed on 24.02.2012 between the vendors Ms. BharathiRaviprakash, Ms. Gayathri Ramamurthy (assessee) and Mr. Srinath Ramamurthy with the Purchaser Mr. P. Ravi. On perusal of the registered Sale deed, the same was registered with the office of the Sub Registrar, Adyar, Chennai and the ld. CIT(A) noticed from Annexure 1-A which is a document that tells about the market value of the property transacted, the details of the properties etc. for the purposes of the Stamp Duty and Registration Charges. As per Annexure 1-A, the age of the building was mentioned as 40 years with the 3.85 grounds of land along with super built up area of 6400 square feet (4000 sq. ft. in the ground floor and 2400 sq. ft. in the first floor). The cost of land has been determined at ₹.13,00,00,000/-. The value of the building has been worked out at ₹.50,00,000/- and the total value of the property was calculated at ₹.13,50,00,000/-. From the above details, it is evidently clear that the value of the property on the date of sale on 24.03.2012 was ₹.50,00,000/- which SrinathRamamurty included the cost of renovation/expansion and also the cost of acquisition of ₹.1,17,000/-, as accepted by the assessee. Therefore, the ld. CIT(A) determined the cost of expenditure of expansion/renovation of the impugned property at ₹.48,83,000/- [₹.50,00,000 – ₹.1,17,000] and directed the Assessing Officer to adopt the same as cost of improvement. The argument of the ld. DR that the assessee has not filed any evidence for the claim of expenses is not acceptable, because, it is not possible for the assessee to produce any evidence for the event which would have been taken place after 20 or 30 years later. However, by considering the value adopted by the SRO for stamp duty and Registration, as detailed above, we are of the considered opinion that the ld. CIT(A) has rightly determined the cost of expenditure on expansion/renovation of the impugned property and accordingly, we find no reason to interfere with the order passed on this issue. Thus, the ground raised by the Revenue stands dismissed.

SrinathRamamurty 7. We have heard the counsels for both the parties and we have also perused the material placed on record as well as orders passed by revenue authorities. We find that the Coordinate Bench of ITAT in ITA No. 3429/Chen./16 has already dealt with the identical ground in the case of one of the co-owner namely Smt Gayathri Ramamurthy and the subject matter i.e. the property in the present case as well as in the case of Smt Gayathri Ramamurthy is also same, but the claim of the assessee in the present case has been disallowed by the AO by holding that the assessee has failed to furnish any documentary evidence with regard to addition/cost of improvement. However, in the case of co-owner, the Ld. CIT(A) in that case determined the cost of expenditure of expansion /renovation of the impugned property and directed the AO to adopt the same as cost of improvement.

Therefore, considering the facts and circumstances of the present case and keeping in view the decision of the Coordinate Bench of ITAT in respect of the same property and also keeping in view the substantial cause of justice, we set aside the order of Ld. CIT(A) and remit the matter back to the file of AO with a direction to verify the claim of the assessee while keeping in SrinathRamamurty view the orders passed by the Coordinate Bench of ITAT in ITAT no.3429/Chenn/16 or any other documents if so filed by the assessee and decide the matter afresh. Before parting, we may make it clear that our decision to restore the matter back to the file of AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the AO independently in accordance with law.