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Income Tax Appellate Tribunal, AGRA BENCH: AGRA
Before: SHRI LALIET KUMAR, & DR. MITHA LAL MEENA
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH: AGRA
BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER, AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER
I.T.A No. 148/Agra/2018 (ASSESSMENT YEAR-2007-08)
Shri Shyam Gupta Alias Vs..ITO-Ward 3(2), Shyam Lal L/H Shri Kali Mathura. Charan, R/o Gali Peer Punch, Mathura. PAN: AMOPG9560H (Appellant) (Respondent)
Appellant by Shri Vishewar, AR. Assessee by Shri Waseem Arshad, Sr. DR.
Date of Hearing 02.07.2019 Date of Pronouncement 12.07.2019
ORDER Per Dr. M. L. Meena, A.M.: The present appeal emanates from the order of the ld. Commissioner of Income Tax Appeals-1 Agra, [(in short ‘the ld. CIT(A)] dated 30.11.2017 for A.Y. 2007-08, wherein the assessee has claimed relief towards renovation expenses on the property with the support of the affidavit of the deceased wife.
Briefly, the facts of the case are that the assessment was completed u/s 147 r.w.s. 144 vide order dated 27.03.2015 assessing capital gains at Rs.3 lac in the
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hands of deceased Shri Kalicharan on the sale of house at Rs.4,30,000/- as against stamp value of Rs.7,30,000/- under the provision of section 50C of the Act.
Aggrieved assessee went in appeal before the ld. CIT(A) who has confirmed the finding of AO vide para 10 and 10.1 by observing as follows:
“10. I have carefully considered the appellant’s submissions, the impugned order, the A.O.’s remand report and the appellant’s rejoinder thereto.
I notice that while computing the capital gain no cost of acquisition was set-off against the sale consideration by the A.O. The purchase deed has been now certified by the Sub- Registrar-I, Mathura and in the remand report, the A.O. has lawfully accepted the appellant’s contention that deduction for the same should be allowed to him in respect of the purchase price of Rs. 3,15,000/-.
However, the dispute that remains is regarding the allowability of the deduction for-alleged cost of improvement of the said property. In support of its allowability, the appellant has pointed out to the differences in the description of the property in the sale deed and in the purchase deed. He has also relied upon an affidavit submitted by the wife of the deceased to the A.O. during the reassessment proceedings wherein, inter alia she has deposed that about Rs. 1 lac was invested by her husband in construction of the said house in 1998.
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Having considered the above facts, I am not able to find myself in agreement with the appellant as regards the deduction claimed for the alleged cost of improvement. In his remand report the A.O. has rightly pointed out that at page no. 1 of the sale deed, it has been mentioned that the property was constructed more than 50 years prior to the date of sale by the deceased. Further, the affidavit has been given by the wife and not the person who had made the alleged investment in the property and is not supported by any details or evidences of the construction work. Finally, the differences in the description of the property as seen in the sale deed from its description in the purchase deed are not significant enough to establish that any construction was actually carried out by the deceased after he purchased it.
10.1 Hence, in light of the above facts, I am of the view that deduction of Rs. 4,93,912/- in respect of cost of acquisition as computed by the A.O. in his report is legally allowable for the purpose of the capital gain on sale of the house property. However, no deduction in respect of the cost of improvement can be allowed.”
The ld. AR for the assessee has reiterated submission made before the ld. CIT(A) contending that after allowing the deduction of cost of acquisition and cost of improvement of house hold by his father, no tax liability remains in the hands of the assessee.
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Per contra, the ld. DR placed strong reliance on the order of the authorities
below. He contended that the subject property was purchased on 27.02.1998 and it
was sold on 08.01.2017 as per the sale deed and accordingly, the AO has computed
the cost of acquisition for the purpose of capital gains u/s 50C of the Act in the
remand report furnished vide letter dated 15.06.2017 . Thus the AO lawfully
accepted appellate contention while allowing the deduction for the cost of
acquisition of the asset at Rs.4,93,912/- in respect of purchase price of Rs.3,
15,000/-. The issue under dispute remains is regarding the allowability of
deduction of alleged improvement expenses on the said property on the basis of the
affidavit of the wife of deceased assessee and not the person who has either made
the alleged investment in the property or the legal heir of the assessee and further
affidavit was supported by any material evidence to substantiate the construction
work therefore, the difference in the description of the property as per the sale deed
from its description in the purchase deed is not enough to establish that any
construction work was actually carried out by the deceased after he purchase the
property/house and therefore the ld. CIT(A) has rightly rejected the claim of the
assessee.
Having heard both the parties and perusing the material on record. We find
that the cost of acquisition adopted in respect of the purchase price of the house is
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not under dispute. The issue disputed is the allowability of deduction for the cost of improvement of the house of the deceased assessee based on the affidavit given by the deceased assessee’s wife. The counsel for the assessee has failed to demonstrate with corroborative evidence the alleged expenditure on the improvement on the disputed property. We find that the ld. Counsel for the assessee has not produced any documentary evidence or material evidence to substantiate the construction work pertaining to the improvement of the disputed property either at the stage of AO/CIT(A) or even before us. Under the facts and circumstances, since the assessee failed to demonstrate the chain of activities on the construction work with the support of documentary evidences, such as the bills, vouchers contract agreement, withdrawn from bank, cash vouchers / cheques payments etc. to establish its claim. Therefore, we are inclined to agree with the observation/finding of the ld. CIT(A).
It is evident from the above that the assessee has failed to establish any construction work being actually carried out by the deceased after he has purchased the subject property. Merely, furnishing of a blanked affidavit of the wife of the deceased without supporting corroborating factual evidence cannot be considered as material evidence to discharge the assessee’s burden of proof in respect of the cost of construction/improvement claimed. Therefore in our
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considered opinion, the ld. CIT)A) decision was just fair, reasonable and as per
law.
In the above view, we do not find any reason to interfere in the order of the
ld. CIT(A) and as such, the order of the ld. CIT(A) is confirmed.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the open court on 12 /07/2019.
Sd/- Sd/- (Laliet Kumar) (Dr. M.L. Meena) JUDICIAL MEMBER ACCOUNTANT MEMBER *AKV* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT Sr. PRIVATE SECRETARY ITAT, AGRA.