LALCHAND A. TAHILRAMANI,MUMBAI vs. ASST CIT CIR 1, MUMBAI

In this appeal the only dispute raised by the assessee is the manner of computing capital gains on sale of property.

Before proceeding further it may be noticed that there is a delay of 13 days in filing of the appeal before the Tribunal. In this context the reasons have been explained by the assessee by way of an application dated 04.01.2017. Considering that the reasons are not in dispute and also the fact that there is only a small delay of 13 days, the delay is condoned and the appeal is admitted for adjudication.

The relevant facts of the case are that during the year under consideration the assessee sold a property at Kalpana Apartments, Khar, Mumbai. While computing the cost of acquisition the assessee had included an element of interest payment of `2,86,550/- whose indexed cost was taken as `4,24,452/-. The AO rejected this component of the Shri Lalchand A. Tahilramani computation of capital gains on account of the fact that there was no documentary evidence in support of the claim. Before the CIT(A) the assessee reiterated the submissions made before the AO to the effect that the interest of `2,86,550/- was capitalised to the cost of the property in A.Y. 2005-06. The CIT(A) has also rejected the plea of the assessee on account that the details furnished by the assessee was merely a sheet of paper and there was no documentary evidence to show from whom the loan was taken and whether the loan amount was used for acquisition of the property in question. Against the said decision of the CIT(A) the assessee is in appeal before the Tribunal.

Before me the learned A.R. of the assessee referred to page 6 of the paper book to point out that in A.Y. 2005-06 the assessee had incurred total interest cost of `13,62,350/- out of which `2,86,550/- was capitalised in relation to the impugned flat and therefore the claim was quite justified. The learned A.R. pointed out that the assessment for A.Y. 2005-06 was completed under section 143(3) of the Act dated 14.12.2007, a copy of the said order has been placed on record. It was therefore contended that the claim of the assessee has been unjustly rejected and that the assessee would be satisfied if the matter is restored back to the file of the AO who may verify the assertions of the assessee which are supported by adequate documentary evidence.

The learned D.R. of the Revenue, on the other hand, has relied upon the orders of the authorities below.

I have carefully considered the rival submissions. Ostensibly, in the instant year the case of the assessee is based on the interest cost incurred in A.Y. 2005-06 and it is pointed out that the sum has also been considered in an assessment finalised under section 143(3) of the Act for A.Y. 2005-06. Before me the learned A.R. has referred to the paper book filed by the assessee which, inter alia, contains the details of investment made in the flat which has been sold during the year. The assessee has also furnished a breakup of the total interest expenditure incurred in A.Y. 2005-06 and the amount relatable to the flat in question. In my considered