The Income Tax Appellate Tribunal (ITAT), Mumbai during permitting the right for the facilities charges on flat sale rules that the facilities charges decrease the capital gains. The problem is a concern to the facilities charges claimed by the taxpayer as a portion of the cost of purchase of the flat.
On the submission obtained from the builder Hiranandani Lake Gardens along with the group M/s. Lake View Developer, AO noted that out of 128 flats in Eternia CHS facilities agreements have been made only in respect of 33 flats.
Read Also: What Income Tax Provisions Say for Property Sale by NRI in India? 
Check out all income tax provisions for NRI to sell a property. Also, we disclose the penalty norms in the case of TDS not deducted and not paid. Read more
This states that there is no important pattern on the behalf of the builder to split the work into two distinct agreements which are opposite to the facts submitted by the taxpayers. The builder has given the flat in finished mode and was fit to live in all aspects excluding some flat owners, most of the other flat owners in Eternia CHS done any agreement with the builder.
After seeing the facilities agreement that the facilities charges availed consists of special waterproofing in toilets kitchen, special wood for doors/windows, etc. that is not the goal of improvement cost. A taxpayer who claims the amenities agreement is also not with the builder while a group concern i.e Lake View Developer
The taxpayer is unable to relate the 2 agreements done within 2 distinct business entities i.e M/s. Hiranandani Lake Garden and others with M/s. Lake view Developers. Details of payment, mode of payment with date, is unable to get disclosed by the taxpayer with supporting evidence of the stated payments. With concern to above, long term capital gain determined as per order beneath section 250 of the Income Tax Act of Rs.25,13,902 is charged to tax.
In the presence of Ram Lal Negi and Shamim Yahya stated that the authorities besides must have accompanied the ITAT order and permitted the taxpayer to claim the facilities as the section of the cost of the portion.
It is then secured that the charges on the facility had previously been furnished and the same appears in the balance sheet of the taxpayers.
“Accordingly, in our considered opinion the denial of the assessee’s claim towards amenities charges paid as part of the cost of acquisition is not sustainable. Accordingly set aside the orders of authorities below on this issue and decide the issue in favor of the assessee,”
