Cost of improvement claim partly accepted as evidence supported construction expenditure despite factual doubts.

Cost of improvement after indexation was not fully disallowed where the record showed evidence of boundary wall construction, gate work and soil filling, and the department could not completely negate the expenditure on the facts presented. Although the assessee was proceeded ex parte and an address discrepancy was noted, the material on record supported at least part of the claim. The disallowance was therefore not sustained in full and was restricted to a lump sum of Rs. 10 lakhs, granting partial relief to the assessee.

---

---

Issues: Whether the disallowance of the assessee's cost of improvement after indexation was liable to be sustained in full.

Analysis: The assessee was proceeded ex parte. The revenue maintained that the claim for cost of improvement had not been adequately proved, though the record showed evidence of construction of boundary wall, gate and soil filling. The assessed address discrepancy was noted, but the material on record indicated that expenditure had in fact been incurred and that the department could not fully negate the claim on the facts presented.

Conclusion: The disallowance was not upheld in entirety and was restricted to a lump sum of Rs. 10 lakhs, resulting in partial relief to the assessee.

---