The dominant issue was whether the assessee was entitled to...

The dominant issue was whether the assessee was entitled to claim indexed cost of improvement while computing LTCG on sale of a residential property. The disallowance was based only on the AO's view that the improvement expenditure was not commensurate with the super built-up area. The tribunal held that the purchase deed showed acquisition of a semi-constructed house, whereas the sale deed reflected a fully completed house with fittings and statutory utility connections, and the assessee produced contractor ledgers, bills and vouchers evidencing construction and improvements. Mere suspicion, without contrary material, could not justify rejection of the claimed improvement cost. The addition sustained in first appeal was set aside and the assessee's appeal was allowed. - ITAT