ASHOK AGARWAL,AGRA vs. A.C.I.T., CIRCLE-1(1)(1), AGRA
What did the Tribunal hold?
The Tribunal held that the expenses incurred were integral to making the residential unit livable and part of the construction. Therefore, the disallowance sustained by the CIT(A) could not be upheld.
What were the facts?
The assessee claimed construction expenses for capital gains. The AO disallowed certain expenses like lift, CCTV, and AC service on an estimated basis. The CIT(A) restricted this disallowance to 10% of total expenses.
What were the issues?
Whether expenses related to lift, CCTV, and AC service are considered part of construction expenses for capital gains computation.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “DB” BENCH, AGRA
Before: HON’BLE SHRI SATBEER SINGH GODARA, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
(िनधा�रणवष� / Assessment Year:2015-16) बनाम/ Shri Ashok Agarwal ACIT, Circle 1(1)(1), 37, Bharatpur House, Agra. Agra. Vs. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AAMPA-0709-J (अपीलाथ�/Appellant) : (� थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Sh. Pankaj Gargh, Adv. – Ld. AR � थ�कीओरसे/Respondent by : Sh. Shailender Shrivastava – Ld. DR सुनवाईकीतारीख/Date of Hearing : 20-02-2025 घोषणाकीतारीख /Date of Pronouncement : 22.04.2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. The assessee’s appeal is a recalled matter vide MA No.10/Agr/2020 for the limited purpose of adjudication of Ground Nos. 7 & 8. It could be seen that assessee’s appeal was disposed-off by Tribunal vide common order dated 22-03-2019. The assessee preferred misc. application MA No.10/Agr/2019 on the ground that ground nos. 7 & 8 were not adjudicated by Tribunal. The same was accepted by the bench in its order dated 22-09-2023. Accordingly, the appeal has come up for fresh hearing for limited purpose of adjudication of ground nos. 7 & 8. In these grounds, the assessee challenges arbitrary 10% disallowance of expenses as claimed u/s 54 of the act. Upon perusal of para-8 of the assessment order, it could be seen that the assessee claimed various construction expenses while computing capital gains. The Ld. AO opined that expenditure on lift, CCVT, Service of AC do not form part of the construction and accordingly, on estimated basis, Ld. AO disallowed Rs.25 Lacs on adhoc basis. The Ld. CIT(A) restricted the same to the extent of 10% of total expenses which worked out to Rs.4.80 Lacs. Aggrieved, the assessee is in further appeal before us.
Considering the nature of expenses, we are of the opinion that the above expenditure was incurred to make the residential unit livable and the expenditure was integral part of construction. This being so, the impugned disallowance as sustained in the impugned order could not be upheld. By deleting the same in full, we allow these grounds.
The appeal stand allowed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.
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