MOOL RAJ GUPTA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Delay of 77 days in refiling the appeal is condoned.

(2.) This appeal has been filed by the assessee under Sec. 260A of the Income Tax Act, 1961 (in short "the Act") against the order dtd. 31/10/2017 (Annexure A-15) passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as "the Tribunal") in ITA No. 553/Asr/2016, for the assessment year 2006-07, claiming the following substantial questions of law:-

(3.) A few facts necessary for adjudication of the instant appeal as narrated therein may be noticed. Shri Mool Raj Gupta filed the return of income for Assessment Year 2006-07 on 28/3/2007 at an income of Rs.1,82,480.00 as is clear from the income of computation (Annexure A-1). The said return was processed under Sec. 143(1) of the Act on 17/5/2007. Shri Mool Raj Gupta expired on 24/5/2007 and his wife Smt. Neeraj Gupta also expired. Thus, the property at Railway Link Amritsar was inherited by their sons, namely, Jatinder Mahajan and Vivek Mahajan which was in a very bad depilated shape requiring urgent repairs. The inherited property was purchased in the year 1999 by Shri Mool Raj Gupta, which was sold during the period relevant to the assessment year 2006-07 for an amount of Rs.50,00,000.00 resulting in a long term capital gain. The deductions on account of cost of acquisition of Rs.8,93,503.00 and indexed cost of construction/renovation amounting to Rs.13,18,399.00 was claimed. The sale consideration was invested in the purchase of NABARD Bonds amounting to Rs.20,00,000.00; residential house along with legal costs Rs.6,54,000.00 and Rs.5,00,000.00 on renovation of the purchased house resulting in the negative long term capital gain at Rs.3,65,902.00. The assessee claimed deduction on account of repair and renovation works undertaken prior to the sale by him amounting to Rs.10,31,906.00 (indexed cost Rs.13,18,399.00) which had been incurred in accordance with the quotation dtd. 26/6/1996 (Annexure A-2) issued by the contractor. According to the assessee, the dispute related to the disallowance of claim for repairs and renovation qua the indexed cost of Rs.13,18,399.00 before the sale of the property at Railway road and also relating to exemption for investment towards repair and renovations of Rs.4,95,000.00 which were paid through A/c payee cheques to Sh. Kamal Kishore Gupta, in respect of the newly purchased house, the details of which are as under:- <FRM>JUDGEMENT_169_LAWS(P&H)3_2019_1.html</FRM>