TaxTMI 
TaxTMI 
2023 (9) TMI 1783
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....s is an individual andfiled return of income for the assessment year (AY) 2018-19 on 27.03.2019, declaring total income at Rs. 3,23,75,540/-. Subsequently, the assessee's case was selected for limited scrutiny, under e-assessment scheme 2019 to verify the issues of "Details of assets and liabilities/capital gains/income on sale of property". Assessment proceedings were finalized on 05.02.2021 by passing assessment order u/s 143(3), by determining assessed income at Rs. 3,23,75,540/-, that is, accepting the returned income filed by the assessee. 3. Later on, Learned Principal Commissioner of Income-Tax (in short "Ld PCIT") exercised his jurisdiction under section 263 of the Income-Tax Act, 1961. On verification of the records, it was noticed by ld PCIT that the assessee and his brother, Mr. Prakashbhai Prahladbhai Gami had purchased an agricultural land for Rs. 39,51,700/-, vide purchase deed on31.07.2008 with 50% share and sold the same immovable property on 19.07.2017, for sale consideration at Rs.11,16,00,000/- out of which the assessee received Rs.4,58,00,000/- with 41.04% share as stated in the sale deed. 4. On further verification, it was noted by ld PCIT that the as....
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....of this payment has been paid by Shri Chetankumar Balubhai Patal and same is of Rs.24,395/- only. Cost of improvement should be supported by documentary evidences, supporting bills, vouchers, documents etc. to establish the genuineness of the transaction. It is the foremost duty of the assessee to produce the documentary evidences, supporting bills, vouchers, documents etc., to substantiate his claim. As evident from the above, the assessee had not discharged his onus and filed partial supporting documents. Therefore, the claim of Rs.5,91,201/- (4,23,708 + 1,67,493) as improvement cost is required to be rejected. 6. Thus, based on the above facts, ld PCIT noted that total cost of improvement stands at Rs.1,08,92,800/- (1,14,84,000 - 5,91,200) as against the assessee's claim of Rs.1,14,84,000/- and as discussed in the preceding paragraph, the assessee's share for cost of improvement comes to Rs.44,69,315/- (41.03% of 1,08,92,800/-). In view of the above, computation of LTCG is worked out as under: Sr. No. Particulars Amount (Rs) Full value of consideration 4,58,00,000/- Indexed cost of acquisition 36,20,866/- ....
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....other half payment was made by other continuous cheques i.e. 19,75,850/- by cheque no 583942 and 583943, these belongs to same account. Further, in sale deed dated 01.09.2017, the 41.04% of consideration was paid to you and 58.96% of consideration was paid to the other owner. Please justify your claim of share in the property at the time of purchase and sale with sufficient documentary evidence. 1.2 Para 3 that, On perusal of ITR, it is seen that you have claimed cost of improvement with indexation of Rs.57,42,000/-. Please furnish the documentary evidences in support of cost of improvement and necessary calculation for arrival of this amount. Copy of the said notice dated 03.11.2020 is enclosed and marked as Anneure-1 for your records. 2.1 However in respond to the aid notice, I vide my letter dated 30.11.2020, I have duly informed/explained in para 1.2 I hereby humbly submit that the share in the property was in the ratio of 50:50 with my brother Shri Prakashbhai Prahaladbhai Gami. Thereafter there was a dispute in the family and at the time of sale of the property, I was given only Rs. 4,58,00,000/- being 41.04% of the sale consideration and the balance was tak....
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....n consideration 42,36,443 Total index cost of acquisition consideration 2.5 Thus from the above it very clear that your gooself have calculated index cost of acquisition and index cost of improvement on the basis of % method of my relevant share but your goodself hasn't considered the actual payment and receipt for the said immovable transaction during the course of assessment proceedings. Thus from the above, it was very clear that all the information which was provided by me during the course of e-assessment was duly verified by the NEAC and all the details I would like to inform your goodself that I have duly offered the my share of capital gain and cost incurred by me for the relevant transaction and tax on sale of immovable in my return of income which is duly enclosed for your reference as Annexure- 3 for your records. 3.0 In case your goodself required any further information &/or document please let me now. Further an opportunity may kindly be granted before drawing any adverse inference, if any. Hence, I humbly request your goodself to kindly drop the show cause notice issued u/s 263 and provide relief to us." 8. How....
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....) (iii) Reply submitted by the assessee, dated 14.09.2020, in response to above notice,( vide pages 19-22 of paper book) (iv) Sale dated 01.09.2017 ( vide pages 23-49 of paper book); (v) Purchase dated 31.03.2002 ( vide pages 50-62 paper book), (vi) Notice u/s 142(1) dated 16.10.2020 ( vide pages 63-64 of paper book) (vii) Reply dated 02.11.2020 in response to above notice (vide pages 65 of paper book). (viii) English translation of sale deed dated 01.09.2017 (pages 66-97 of paper book) (ix) English translation of purchase deed dated 31.03.2008 (pages 98-112 of paper book) (x) Notice u/s 142(1) dated 03.11.2020 (page nos.113- 114 of paper book) (xi) Reply filed by the assessee, dated 30.11.2020 in response to above notice ( vide pages 115-118 of paper book) (xii) Copy of receipts of cost of improvement ( vide pages 119-121 of paper book). 13. We note that assessee has calculated index cost of acquisition and index cost of improvement on the basis of % method of relevant share but has not considered the actual payment and receipt for the said immovable transaction during the course of assessment proc....