TaxTMI 
TaxTMI 
2023 (4) TMI 686
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the persons searched. 3. For that the Learned Commissioner of Income Tax (Appeals) erred in denying the benefit of indexation on cost of improvement incurred during FY 2004-05 amounting to Rs.37,77,148/- having directed the Assessing Officer to allow the claim of cost of improvement on account of compound wall, parking area, drying platforms, roads, leveling and soil dumping workings amounting to Rs.16,17,779/-. 3. Similar grounds were raised by the assessee in other appeal also i.e., ITA 707/Hyd/2022 for A.Y. 2017-18 except the amounts involved in. 4. Before us, at the outset, both the parties submitted that the issues raised in both the appeals were identical. In view of the aforesaid submissions, we, for the sake of convenience proceed to dispose of both the captioned appeals by a consolidated order but however refer to the facts in ITA No.706/Hyd/2022 for A.Y. 2016-17. 5. The brief facts of the case are that assessee is an individual and derives income from business, long term capital gain and from other sources. The assessee had filed his return of income for the AY 2016-17 on 24.03.2018 declaring income of Rs. 8,26,153/-. A search and seizure operation u/s.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. Meeta Gutgutia - (2017) 82 taxmann.com 287 (Delhi) dt.25.05.2017 2 PCIT Vs. Meeta Gutgutia - (2018) 96 taxmann.com 468 (SC) dt.02.07.2018 3 CIT Vs. Arpit Land P. Ltd. - (2017) 78 taxmann.com 300 (Bombay High Court) 4 CIT Vs. IBC Knowledge Park Pvt. Ltd. - (2016) 69 taxmann.com 108 (Karnataka High Court) 5 Yellaiah Setty Vs. ACIT, Hyderabad - ITA No.494/Hyd/2017 dt.15.11.2018 10. On the other hand, the ld.DR submitted that the search and seizure operation was conducted on 22.10.2019 in the residential premises of Sri D.Srinivasa Reddy, wherein material during the course of search from the residential premises of said D. Srinivasa Reddy relates to M/s. SRD Exports, for which, the assessee is the Proprietor were seized. It was submitted that in the registered sale deed, the name of the assessee was duly mentioned, and it was submitted that on the basis of the registered sale deed, the assessee had claimed long term capital gain and indexation cost whereas in the agreement of sale dt 21.11.2015 the property has been shown as vacant plot of land. It was further submitted that as in the registered sale deed, no construction was shown rather the property was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er that the Central Government may by rules80 made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made 81[and for the relevant assessment year or years as referred to in sub-section (1) of section 153A] except in cases where any assessment or reassessment has abated.] 82[(2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year- (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....up property. To claim the cost of improvement and indexation cost, assessee has to furnish some evidence and in the absence of any evidence or information, then the information contained in the registered sale deed is required to be accepted. Further, the information contained in the registered sale deed relates to the assessee and therefore, we are of the opinion that the Assessing Officer was right in invoking the jurisdiction u/s 153C of the Act and therefore, there is no ground for interference by us with the order of ld.CIT(A) and accordingly, the ground no.2 is dismissed. Ground No.3 14. With respect to ground No.3, ld. AR had submitted that the ld.CIT(A) was erred in denying the claim of assessee. Ld. AR further submitted that evidence in the form of photographs were provided to the Assessing Officer as well as ld.CIT(A) which show that the improvement was carried out at the residential premises of the assessee. Further, the assessee drew our attention to the certificate issued by the Architect in the year 2015 during the proceedings before the ld.CIT(A) substantiating that the construction was carried out in the premises. 15. Per contra, ld. DR had submitted that t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssee was also specifically requested to furnish a detailed working for the computation of long term capital gains with all necessary evidences and explain the discrepancy as stated above in this office show cause notice dt.17.12.2019. As the assessee has not furnished correct computation, not reconciled the discrepancy, and in the absence of requisite particulars for computation of capital gains, there is no option except to compute the capital gain as per the information gathered from TSIIC, Hyderabad, and as available form the records. 16. Further, the ld. DR had drawn our attention to para 6.7.1 of the order passed by the ld.CIT(A) wherein the above issue has been examined by the ld.CIT(A). Discussion & Decision 6.7.1 I have considered the submissions of the AR and the order of the AO. It is seen that the appellant has sold land admeasuring 8368.60 sq. meters along with Shed to M/s. Optimus Pharma (P) Ltd. vide sale deed No. 20907/115 dated 21.11.2015 for a consideration of Rs.1,58,22,000/-. The appellant claimed cost of improvement of Rs.139.66 lakhs and submitted a certificate dated 19.02.2015 from an approved Civil Engineer & valuer to substantiate its cl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sallowance of Rs.33,65,988/- (Rs.1,31,37,351/- - Rs.97,71,363/-) is confirmed. The appeal of the appellant on this issue is PARTLY ALLOWED." 17. We have heard the rival submissions and perused the material on record. Admittedly, the assessee had sold the land admeasuring 10,008.58 sq.yards vide sale deed bearing no.20907/2015 on 21.11.2015 for consideration of Rs.1,58,22,000/-. Against the said sale consideration, the assessee had claimed cost of improvement for a sum of Rs. 16,77,779/- and also submitted a Certificate from the approved Civil Engineer along with photographs. Admittedly, the assessee has not produced any evidence towards the development expenses in the previous year and ld.CIT(A) had disallowed an amount of Rs.33,65,988/-. 18. In our view, it is essential for the assessee to prove that there were improvements made in the plots by the assessee prior to the execution of the sale deed. If we compare the site plans annexed to agreement for sale 03.11.2004 and the sale deed dt.21.11.2015, then it is clear that both the site plans are similar to each other except in the plan annexed to the sale deed dt.21.11.2015 wherein the total built up area was mentioned as 1155....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the reading of the description of built up area referred in above noted sale deed, it is crystal clear that no construction activity has been mentioned in the first sale deed executed on 21.11.2015 except a small shed of 1155.90 sq.yards covered with RCC as against total area of plot admeasuring 10,008.58 sq. yards. 21.1. In our view, whatever relief can be granted to the assessee was with respect to the small shed of 1155.90 sq.yards and on which the assessee was eligible for improvement cost and indexation cost. However, the assessee is not entitled either the cost of improvement or indexation for the remaining area, as when there was no construction, then there was no occasion for grant of any improvement cost or indexation thereto. In our view, the ld.CIT(A) has granted more relief than what the assessee deserves. Similarly, in the other sale deed dt.13.04.2016, there was no construction whatsoever mentioned in the sale document. The registered document namely, sale deed once suggests and mentions no construction in the plot, there is no occasion to consider the construction in the plot and granting costs of improvement and indexation thereto does not arise. 22. Ld.AR ha....