TaxTMI 
TaxTMI 
2026 (9) TMI 1246
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....cer without properly appreciating the facts of the case. The learned CIT(A) should have on the facts of the case quashed the order passed by the assessing officer rather than partially upholding the order passed by the assessing officer. 3. In any case and without prejudice, the learned CIT(A) has erred in partially confirming the disallowance made by the Assessing officer on account of cost of improvement to the extent of Rs. 48,16,914/- as against Rs. 1,00,22,500/- made by the Assessing officer on the ground that the appellant has not proved the cost of improvement with documentary evidences. On proper appreciation of facts and the law applicable, the cost of improvement claimed is duly supported with documentary evidences and same is to be accepted in entirety. 4. In any case, the learned CIT(A) has erred in holding that CPWD plinth area rates are to be adopted for arriving at the cost of improvement of the property as against the actual cost of improvement incurred by the Appellant. The conclusion drawn by the CIT(A) is erroneous both on facts and law and is to be rejected and the actual cost of improvement as claimed by the appellant is to be allowed. ....
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....45,91,605/-. 3.2 Further, on going through the details/documents furnished by the assessee, the AO seen that the assessee had claimed the cost of improvement amounting to Rs. 52,75,200/- and Rs. 47,47,300/- for which assessee had not given any proof towards such cost of improvements. The AO also noticed that the assessee had claimed an amount of Rs. 5,10,300/- on account of interiors as part of deduction u/s 54F of the Act. The AO in the absence any proof issued the SCN proposing to disallow the above claims. The assessee vide letter dated 29/12/2014 submitted that initially the building was constructed during the financial year 1981-82 by her late husband by spending Rs. 6,72,000/-. Subsequently, during the financial year 2003-04, the additional construction was done by spending amount of Rs. 28 lakhs by availing housing loan of Rs. 24 lakhs. The assessee also furnished the saving Bank account statement maintained with the Indian Bank for the period from 9/3/2006 to 24/6/2014 along with the interest certificate for the home loan account for the period 1/4/2011 to 31/03/2012. The AO held that the certificate produced by the assessee cannot prove that the loan was taken for the p....
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....y worked out the cost of construction at Rs. 1,60,500/-. Further, with regard to construction of building of 1482 sq.ft. in 2003-04 amounting to Rs. 28,00,000/-, which works out to 1889 per sq.ft. again very much on the higher side. The AO held that Rs. 600/- per sq.ft. would be a reasonable rate of cost of construction and for constructed area of 1482 sq.ft. worked out the cost of construction at Rs. 8,89,200/- during the financial year 2003-04. The assessee in the rejoinder submitted before the ld. CIT(A)/NFAC that there is no basis stated by the AO for adopting Rs. 100/- per sq.ft. for construction of building and Rs. 600/- per sq.ft. for the extension. The learned CIT(A)/NFACthereafter observed that the assessee had not furnished any bills/vouchers in support of cost of construction claimed at Rs. 6,72,000/- in the year 1981-82 and Rs. 28,00,000/- in the year 2003-04. Further, the assessee had also not given any basis in support of her claim that the cost of construction incurred was Rs. 6,72,000/- in the year 1981-82. The assessee in support of her claim of cost of construction incurred amounting to Rs. 28,00,000/- in the year 2003-04 had relied solely on the amount of loan ta....
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....IT(A)/NFAC on the other hand, estimated the cost of construction/improvement on his own by ignoring engineer's valuation report and summary furnished by the assessee. The ld. CIT(A)/NFAC although considered the year of construction as 1985 mentioned in the valuation report by ignoring the plea of the assessee that the construction was made by the late husband of the assessee in the year 1981-82 but on the other hand rejected the valuation of the engineer without assigning any reason. Lastly, with regard to disallowance of claim of Rs. 5,10,300/-, the ld. A.R. of the assessee submitted that since already 13 years have elapsed, it is not possible to submit proof towards interiors of the flat as it was done under personal supervision by engaging local carpenters. 8. The ld. D.R. on the other hand, vehemently submitted that the assessee did not furnish any bills/vouchers in support of the cost of improvement claimed at Rs. 6,72,000/- in the year 1981-82 and Rs. 28,00,000/- in the year 2003-04. Further, the ld. D.R. submitted that the assessee had also not given any basis in support of her claim towards cost of improvement as well as expenses incurred towards interior claimed u/s 54F....
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....neer's valuation report dated 19/07/2001 had considered the construction year 1985-86 as mentioned in the report for the purposes of calculation of LTCG. However, the AO did not accept the cost of construction as valued by the engineer vide his valuation report by merely saying that the cost of construction per Sq. ft. appears to be very much on higher side & estimated the cost of construction per Sq. ft. on his own which the AO thinks to be reasonable. 9.1 We are of the considered opinion that the AO on the one hand had picked & choose the construction year 1985-86 as mentioned in the valuation report for his support by rejecting the assessee's contention of the construction year 1981-82, however estimated the cost of construction on his own assumption & surmises saying to be reasonable that too without giving any basis or sensible explanation. We take note of the fact that the ld. CIT(A)/NFAC is also of the opinion that the AO had not given any basis for adopting rate of Rs. 100/- per sq.ft. and Rs. 600/- per sq.ft. in the year 1985-86 and 2003-04 respectively in the remand report. Surprisingly, the ld. CIT(A)/NFAC also thereafter proceeded with the estimating the cost per sq.....