SHRI ASHRAF KHARWA,NAGPUR vs. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-2, NAGPUR

This assessee’s appeal for assessment year 2007-08 arises against the CIT(A)-2, Nagpur’s order dated 18.01.2019 passed in case no. CIT(A)-2/474/2009-10, involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short “the Act”. Heard both the parties. Case file perused.

The assessee raises the following substantive grounds in the instant appeal :- “(1) That the order of the Assistant Commissioner of Income Tax, Circle-2, Nagpur is bad in law and wrong on facts and the learned CIT(A) erred in partly confirming the same. (2) That the learned CIT(A) erred in law and on facts in sustaining the addition made by the Assessing Officer to the extent of Rs.50,000/- by not taking into consideration, the expenditure incurred by the previous owners who have gifted the property to three persons. On the facts and circumstances of the case and in law the action of learned authorities is not justified. (3) That the learned CIT(A) erred in law and on facts in upholding the action of Assessing Officer in not properly considering that the property purchased by the previous owners was about 100 years old and required substantial renovation to make it habitable. On the facts and circumstances of the case and in law the action of learned authorities is not reasonable and unjustified. (4) That the learned CIT(A) erred in law and in facts in not directing the AO to accept the indexation claimed by the assessee on Renovation expenditure considering base year as 31st March, 1992. On the facts and circumstances of the case, the action of the learned CIT(A) is unjustified. (5) That the learned CIT(A) erred in law and on facts in upholding the action of Assessing Officer is not allowing indexation of the cost of property involved from the date of purchase of the property by previous owners. On the facts and circumstances of the case and in law the action of the learned authorities is illegal and not justified. (6) That the learned CIT(A) erred in law and on facts in confirming the action of the AO of charging interest u/s 234A, 234B and 234C. On the facts and circumstances of the case and in law the action is unjustified.” 3. Learned counsel submits at the outset that the assessee’s grounds no.1 and 6 are general/consequential in nature. Rejected accordingly. 4. The assessee’s first and foremost raises the issue of cost of improvement in the alleged capital asset stated to the 100 years old. There is hardly any dispute that the assessee has claimed Rs.2,50,000/-; without any self-attested voucher even which stands accepted to the tune of Rs.1,00,000/- in the CIT(A)’s order. That being the case, I hardly find any reason to reverse the impugned remaining expenditure disallowance of Rs.1,50,000/- on account of