TaxTMI 
TaxTMI 
2026 (8) TMI 1020
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....e case are that the assessee, an individual, filed his belated return of income for A.Y. 2022-23 on 30.12.2022 declaring a total income of Rs. 29,66,400/-. The case was selected for scrutiny to verify low long-term capital gain and high cost of improvement. During the course of assessment proceedings, the A.O. noticed that the assessee had sold an immovable property and computed long-term capital gain after claiming indexed cost of improvement of Rs. 2,30,94,501/- and deduction of Rs. 7,75,519/- u/s 54F of the Act. The A.O. called upon the assessee to file relevant details of computation of capital gain, along with copies of sale deeds, proof of cost of acquisition and indexed cost of acquisition, etc. In response, the assessee submitted re....
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....ts received from the builder, the cost of improvement claimed by the assessee was held to be not supported by relevant evidences. Therefore, the A.O. rejected the explanation of the assessee and recomputed the capital gain by disallowing the cost of improvement of Rs. 2,30,94,501/- claimed by the assessee. 4. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee raised various grounds and contended that the A.O. erred in disallowing the cost of improvement claimed by the assessee pertaining to the amount spent towards further construction of the property to convert the semi-furnished flats into fully furnished flats, for which the assessee had submitted that the A.O....
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....he A.O. and the Ld. CIT(A), without considering the relevant evidences, rejected the details submitted by the assessee and sustained the addition. Therefore, he submitted that the assessee had filed various evidences, including a valuation report from a registered valuer, to prove the additional cost of construction. Accordingly, the addition made by the A.O. should be deleted or, in the alternative, the matter may be remanded to the file of the A.O. for further verification and to decide the issue in accordance with law. 7. The learned Senior A.R. for the Revenue, Shri Mohan Babu, the other hand, supporting the order of the Ld. CIT(A), submitted that, as per the evidence filed by the assessee, including the Development Agreement-cum-GPA....
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....and 149 and received 19 flats in exchange for the land. The assessee sold the flats received pursuant to the JDA and received sale consideration of Rs. 3,18,80,000/-. The assessee computed long-term capital gain of Rs. 9,35,070/- after reducing indexed cost of acquisition, indexed cost of improvement and also claimed deduction u/s 54F of the Act for Rs. 7,75,519/-. The A.O. allowed the indexed cost of acquisition of Rs. 71,74,910/- and also allowed the deduction claimed u/s 54F of the Act for Rs. 7,75,519/-. However, the A.O. disallowed the indexed cost of improvement of Rs. 2,30,94,501/- on the ground that the assessee had failed to substantiate the indexed cost of improvement with relevant evidences. The assessee claimed that, he had rece....
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....ished flat from the builder and also sold a semi-furnished flat to the purchaser without carrying out any further construction or improvement to the flat. 10. Coming to the various evidences claimed to have been submitted by the assessee before the A.O. The assessee furnished certain copies of bills and vouchers. Upon perusal of the relevant evidences extracted by the A.O. in the assessment order, we find that the assessee had filed quotations from various parties for purchase of bricks and also for carrying out woodwork. However, there is no evidence of actual purchase of material or payment towards labour, etc. Further, the assessee filed certain additional evidences in the form of a so-called valuation report from Mr. V.S.S. Sudhir Ch....