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Income Tax Appellate Tribunal, “C” BENCH: KOLKATA
Before: Shri Mahavir Singh, JM & Shri M. Balaganesh, AM]
ORDER Per Shri Mahavir Singh, JM:
This appeal by revenue is arising out of order of CIT(A)-VI, Kolkata in Appeal No.72/CIT(A)-VI/ADIT(IT)-1(1)/10-11/Kol dated 28.01.2013. Assessment was framed by DDIT(IT)-1(1), Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) for AY 2008-09 vide its order dated 24.12.2010.
We have heard this matter ex parte. None is present for revenue or from the assessee. Revenue has filed a petition for adjournment asking for adjournment in twenty matters out of twenty three totally fixed in the cause list. The reason given by revenue in its petition dated 23.11.2015 reads as under: “I am directed to request to the Hon’ble “C” Bench, ITAT, Kolkata that Shri Rajat Kumar Kureel, JCIT, Sr. (DR) will not be able to represent the above mentioned cases since he is going on a visit to Burdwan for official work on 23rd November, 2015. Accordingly, I am directed to request that the case may kindly be adjourned for a later date as per the convenience of the Hon’ble Bench.” We find that the revenue is seeking adjournment on frivolous ground and this is a regular feature. Hence, without giving adjournment and appeal is pending since 2013, we proceeded to decide it ex parte.
The first issue in this appeal of revenue is against the order of CIT(A) deleting the addition made by AO on account of cost of acquisition relying on bank statement. For this, revenue has raised following two grounds: “1. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) fell into error in accepting the assessee’s claim towards cost of acquisition amounting to 2 Shri Ashim Kumar Sen, AY 2008-09 Rs.33,94,980/- without considering the findings of the Assessing Officer incorporated in the remand reports dated 24.04.2012 and 11.12.2012 respectively.
2. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) fell into error in accepting the assessee’s claim towards cost of acquisition amounting to Rs.33,94,980/- by relying upon some bank statement purportedly produced before him but never produced before the Assessing Officer for verification.”
Briefly stated facts are that the assessee, a non-resident Indian, is regular income tax assessee. During the year under consideration, the assessee purchased land admeasuring about 6 cottahs together with two and partly three storied building thereon for a total consideration of Rs.1.10 cr. vide conveyance deed executed on 22.04.2004. The assessee before us claimed that it has carried out renovation expenses in the two following financial years: F.Y. A.Y Amount 2004-05 2005-06 Rs. 26,82,380/- 2005-06 2006-07 Rs. 7,12,600/- Total : Rs. 33,94,980/-”
The assessee sold the above said property vide sale deed registered on 20.11.2007 and declared long term capital gain at Rs.68,62,085/- from sale of this property vide two sale agreements for an amount of Rs.2.50 cr. as under: “i) Land and building sold to Shri Sharad Jhunjhunwala for consideration of Rs.1,40,00,000/- being situated at 126A, Kankulia Road, Police Station Lane, Kolkata. ii) Land sold to Happy Valley Properties & Investments Pvt. Ltd. for consideration of Rs.1,10,00,000/- being situated at 126A/2, Kankulia Road, Police Station Lane, Kolkata.” The AO while computing long term capital gain has not allowed the expenses incurred on repairs and renovation amounting to Rs.33,94,980/- and recomputed the capital gain at Rs.1,12,05,863/- and assessed the same accordingly. Aggrieved, assessee preferred appeal before CIT(A), who after taking additional evidence i.e. bills, vouchers and balance sheet for AYs 2005-06 and 2006-07 referred the same back to the file of AO for remand report and after getting the same allowed the claim of repairs and renovation expenses at Rs.33,94,980/- on account of cost of acquisition while computing long term capital gain by observing in para 7 as under: “7. The additional evidence filed by the appellant after receiving the comments on the same of the Assessing Officer is admitted as per Rule 46A of Income Tax Rules, 1962. Therefore, looking into the facts and circumstances including that expenditure has been incurred after withdrawing cash from the Bank; expenditure was incurred in assessment year 2005-06 and 2006-07 which was duly reflected in the respective I. T. Returns; all persons except two attend and confirmed the receipt of money and respectively work carried out by them relating to renovation
3 Shri Ashim Kumar Sen, AY 2008-09 of the building etc. The cost of renovation is accepted to be fully disclosed, true and correct; therefore, the appellant is entitled for claiming the same as deduction while calculating Capital Gain. The appellant has shown the expenditure in Balance Sheet filed along with returns showing enhanced value of property. In the result, these grounds of appeal are allowed.”
Aggrieved, revenue is in second appeal before Tribunal.
We have gone through the orders of lower authorities. We find that the CIT(A) after examining all the details i.e. withdrawal from cash book, incurred expenditure on account of repairs and renovation, which is reflected in the Balance Sheets for AYs. 2005-06 and 2006-07 and also disclosed the same before the ax authorities. In those years, the tax authorities have accepted the declaration of expenditure with sources. In view of this fact, we find no infirmity in the order of CIT(A) and this issue of revenue’s appeal is dismissed.
The next issue of this appeal of revenue is against the order of CIT(A) in deleting the disallowance of unproved legal and brokerage expenses of Rs.3.30 lacs. For this, assessee has raised following ground no.3:
3. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) fell into error in deleting the disallowance of Rs.3,30,000/- in respect of unproved legal & brokerage expenses claimed by the assessee in the computation of long term capital gains without even discussing the same in the appellate order.”
At the outset, we have gone through the order of CIT(A) and found that this issue is not adjudicated by the CIT(A) and AO has made a specific addition of the same as under: “4. Also assessee’s A/R was asked to produce evidences for legal expenses & brokerage expense of Rs.3,30,000/- vide order sheet noting dt. 10.12.10 which he could not explain with documentary evidences.” This was not allowed deduction while computing long term capital gain. In view of the above, we are of the considered view that let this issue be readjudicated by the CIT(A) and give a specific finding on the same. Accordingly, this issue of revenue’s appeal is allowed for statistical purposes.
In the result, the appeal of revenue is partly allowed for statistical purposes. 9. Order is pronounced in the open court. Sd/- Sd/- (M. Balaganesh) (Mahavir Singh) Accountant Member Judicial Member Dated : 23rd November, 2015 Jd. Sr. P.S Copy of the order forwarded to: APPELLANT –DDIT(IT)-1(1), Kolkata. 1. Respondent – Shri Ashim Kumar Sen, 126/1, Kankulia Road, Kolkata- 2 700019. The CIT(A), Kolkata 3. 4. CIT Kolkata 5. DR, Kolkata Benches, Kolkata /True Copy, By order,