Appeal allowed for construction cost; Boundary wall evidence accepted; Success in claiming improvement cost.

The appeal was partly allowed regarding the disallowance of the cost of construction as a cost of improvement of the property. The Tribunal acknowledged the existence of the boundary wall, accepted the evidence provided by the assessee, and allowed the claim for the cost of construction. The Tribunal emphasized that the absence of mention of the boundary wall in the sale deed did not negate its existence, leading to the partial success of the appeal.

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Issues:
1. Enhancement of income from Long Term Capital Gain
2. Disallowance of cost of construction as cost of improvement of the property

Issue 1: Enhancement of income from Long Term Capital Gain
The appeal was against the order of the ld. CIT(A) confirming the action of the AO in increasing the income from Long Term Capital Gain. The delay of three days in filing the appeal was condoned due to a valid reason provided by the assessee's representative. During the hearing, the assessee decided not to press Ground No. 1 of the appeal, which was subsequently dismissed.

Issue 2: Disallowance of cost of construction as cost of improvement of the property
The AO disallowed the deduction claimed by the assessee for the cost of construction while computing Long Term Capital Gain, as there was no mention of construction in the sale deed. The AO issued summons to verify the construction work, but they were returned unserved. The assessee contended that the construction was of a boundary wall, not a building, and provided details of costs and payments made. The ld.AR submitted ledger accounts, receipts, and affidavits as evidence. The ld. DR argued that the source of construction cost remained unexplained, as there were no withdrawals from the business entity. The Tribunal noted that while the AO did not deny the existence of the boundary wall, no enquiry was conducted to ascertain the correct cost of construction. As the boundary wall's existence was not disputed, the claim for the cost of construction was allowed. The Tribunal clarified that the non-mentioning of the boundary wall in the sale deed did not negate its existence, and partially allowed the appeal.

In conclusion, the appeal was partly allowed concerning the disallowance of the cost of construction as a cost of improvement of the property.

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