2022 (3) TMI 436 - AT - Income Tax

Tribunal affirms Commissioner's decision on evidence, tax deduction, cost challenge. Revenue's appeal dismissed.

ITO, Ward-3 (4), New Delhi Versus Sh. Subhash Chandra Narang

ITO, Ward-3 (4), New Delhi Versus Sh. Subhash Chandra Narang - TMI Issues:1. Acceptance of additional documents/evidences at the appellate stage.2. Allowance of deduction under section 54F of the Income Tax Act.3. Adjudication upon the unsubstantiated exaggerated cost of improvement.Analysis:1. The appeal by the Revenue was against the order of the Commissioner of Income Tax (Appeals) for the assessment year 2014-15. The Revenue raised concerns regarding the acceptance of additional documents/evidences at the appellate stage. The Assessing Officer had disallowed the claim of cost of improvement due to incomplete bills/vouchers. However, the Commissioner (Appeals) after due inquiry found that the new asset purchased by the assessee was a residential house. The additional evidence submitted by the assessee, including the sale deed and field inquiry report, supported the claim. The Tribunal upheld the decision of the Commissioner (Appeals) in accepting the additional evidence and allowing the deduction under section 54F of the Act.2. The second issue pertained to the allowance of deduction under section 54F of the Income Tax Act. The Assessing Officer had rejected the deduction claim, stating that the investment made by the assessee was in agricultural land and not a residential house. However, upon verification of the evidence submitted by the assessee, which included the sale deed and other documents confirming the existence of a residential house on the purchased land, the Tribunal concluded that the claim of deduction under section 54F was valid. The field inquiry conducted by the Inspector supported the assessee's claim, leading to the dismissal of the Revenue's ground challenging the allowance of the deduction.3. The final issue revolved around the unsubstantiated exaggerated cost of improvement. The Revenue contended that the Commissioner (Appeals) did not adjudicate on this issue. However, the Tribunal held that since the investment made by the assessee in the purchase of a new residential house covered the entire sale consideration, the question of allowing the cost of improvement became irrelevant. Therefore, the Tribunal dismissed the grounds raised by the Revenue on this issue.In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) in accepting the additional evidence, allowing the deduction under section 54F, and dismissing the challenge regarding the cost of improvement. The appeal by the Revenue was consequently dismissed, and the order was pronounced on 9th March 2022.