Case Law Details
Rashmi Mahendra Dhanani Vs ITO (ITAT Mumbai)
There are 128 flats in Eternia Co-operative Hosing Society Ltd. No compliance has been received from the society even after repeated reminders. On perusal of the submission received from the builder, Hiranandani Lake Gardens and the group concern M/s. Lake View Developer, AO observed that out of 128 flats in Eternia CHS amenities agreement have been made only in respect of 33 flats. This implies that there was no mandatory arrangement on the part of the builder to split the work into two different agreements, which is contrary to the facts submitted by the assessee vide letter dated 04.09.2017. it establishes the fact that the flat was handed over by the builder in complete constructed form and was fit for habitation in all respects as, part from very few flat owners, majority of other flat owners in Etemia CHS have not entered into such amenities agreement with the builder. it is further observed from the amenities agreement that the amenities charges claimed includes special water proofing in toilets/kitchen, special wood for doors/windows etc. which are not in the nature of improvement cost. The amenities agreement-claimed by the assessee is also not with the builder but a group concern., M/s. Lake View Developer. The assessee has not been able to co-relate the two agreements entered with two different business entities one with M/s. Hiranandani Lake Garden and other with M/s. Lake view Developers. The assessee has also not been able to disclose the. details of payment, mode of payment with date, supporting evidences in respect of such payments. In view of the above, long term capital gain determined as per order under section 250 of the I.T. Act of ₹25,13,902/- is charged to tax.
We find that the issue in dispute is the amenities charges claimed by the assessee as part of cost of acquisition of the flat. This issue had already travelled to the ITAT before. The ITAT had principally agreed with the assessee’s claim but had directed the authorities below to examine whether the similar agreement had been entered for amenities by other flat owners. The objection of the authorities below towards the veracity of agreement for the amenities had already been rejected by the ITAT.
We find that thereafter upon subsequent enquiry the Assessing Officer got information that 33 of the flat owners have also entered into such amenities agreements. Despite this information the authorities below disallowed the assessee’s claim by holding that the veracity of the same was not established. We note that the veracity of the claim was already established by the agreement already submitted by the assessee earlier which the ITAT has accepted. The matter was only remanded to find out the position of other flat owners. From the enquiry of the authorities below it came to light that 33 other flatters had entered into similar amenity agreement. In such circumstances in our considered opinion the authorities below should have followed the ITAT order and allowed the assessee’s claim of amenities charges as part of cost of the position. This position is further fortified that the amenity charges had already been paid and the same was appearing in the balance sheet of the assessee. Accordingly, in our considered opinion the denial of the assessee’s claim towards amenities charges paid as part of cost of acquisition is not sustainable. Accordingly set aside the orders of authorities below on this issue and decide the issue in favour of assessee.
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