Mukut Behari Lal Bhargava Vs ACIT (ITAT Delhi)
Furniture, Fixtures = Cost of Improvement: Delhi ITAT Allows Capital-Gain Deduction
Assessee, an individual, declared income of Rs.1,20,41,040. AO completed assessment at Rs.1,79,36,182 by disallowing: (i) Rs.7,80,526 towards cost of improvement in computation of LTCG, (ii) set-off of brought-forward capital losses (STCL of Rs.3,09,191 & LTCL of Rs.21,71,686), & (iii) deductions u/s 80G/80GGA on donations of Rs.2,36,35,657 to Letz Dream Foundation & Rs.20,00,000 to Parivaar Education Society. Ld. CIT(A)/NFAC upheld all disallowances.
Before Tribunal, Assessee submitted that items such as cupboards, modular kitchen, double beds etc., costing Rs.3,50,000, formed an integral part of the house sold & are essential fixtures without which a residential unit cannot be used. Tribunal held that these are basic structural amenities, integral to habitability, & there is no prohibition in treating such fixtures as part of cost of improvement. AO was directed to allow the entire claim.
On brought-forward losses, Tribunal noted that LTCL from AYs 2008-09, 2011-12 & 2012-13 were from returns filed within the due date, & hence eligible for set-off u/s 70. AO had wrongly relied on late returns of AYs 2013-14 & 2014-15 which were irrelevant. Set-off of LTCL was allowed. As regards STCL of Rs.3,09,191 relating to AYs 2009-10 & 2014-15, factual details were incomplete. Tribunal restored this issue to AO to verify the loss of AY 2009-10 & allow it; however, loss of AY 2013-14 must not be allowed since return was belated.
