SHYAM GUPTA,MATHURA vs. CIT, AGRA

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ITA 148/AGR/2018Status: DisposedITAT Agra12 July 2019AY 2007-086 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the cost of acquisition of the house was not in dispute. The sole disputed issue was the allowability of deduction for the cost of improvement, based on the affidavit of the deceased assessee's wife. The Tribunal found that the assessee's counsel failed to demonstrate the alleged expenditure on improvement with corroborative evidence, such as bills, vouchers, bank withdrawals, or cheque payments. No documentary or material evidence was produced to substantiate the construction work. The Tribunal agreed with the CIT(A)'s observation that a mere affidavit from the wife, without supporting factual evidence, is insufficient to discharge the assessee's burden of proof for cost of improvement. Therefore, the CIT(A)'s decision was considered fair, reasonable, and as per law. The Tribunal found no reason to interfere with the CIT(A)'s order.

What were the facts?

The assessee, Shri Shyam Gupta (Legal Heir of Shri Kali Charan), is in appeal against the order of the CIT(A) dated 30.11.2017 for Assessment Year 2007-08. The assessment was completed under Section 147 read with Section 144, assessing capital gains at Rs. 3 lac on the sale of a house for Rs. 4,30,000/-, which was lower than the stamp value of Rs. 7,30,000/- under Section 50C. The Assessing Officer (AO) initially did not set off any cost of acquisition. During appeal, the AO accepted the purchase price of Rs. 3,15,000/- as cost of acquisition. However, the dispute remained regarding the allowability of deduction for alleged cost of improvement, claimed based on an affidavit of the deceased assessee's wife and differences in property descriptions between sale and purchase deeds.

What were the issues?

1. Whether the Tribunal had to decide on the allowability of deduction for the alleged cost of improvement of the property, which was claimed by the assessee based on an affidavit of the deceased's wife and purported differences in property descriptions between the sale and purchase deeds. Assessee's contention: The assessee contended that after allowing deductions for the cost of acquisition and cost of improvement of the house, no tax liability remains. The affidavit of the deceased's wife was presented to support the claim of approximately Rs. 1 lac invested in construction in 1998. Revenue's contention: The Revenue relied on the orders of the authorities below. It argued that the affidavit was given by the wife, not the person who made the investment or the legal heir, and it was not supported by any details or evidence of construction work. The differences in property descriptions were not significant enough to establish that construction was carried out by the deceased after purchase. The AO lawfully accepted the cost of acquisition at Rs. 4,93,912/-.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 50C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA BENCH: AGRA

Before: SHRI LALIET KUMAR, & DR. MITHA LAL MEENA

For Appellant: Shri Vishewar, AR, Shri Waseem Arshad, Sr. DR
Hearing: 02.07.2019Pronounced: 12.07.2019

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.

2.

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

I.T.A No. 148/Agra/2018 2

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.

3.

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.

I.T.A No. 148/Agra/2018 3

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.”

4.

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.

I.T.A No. 148/Agra/2018 4

5.

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.

6.

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

I.T.A No. 148/Agra/2018 5

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).

7.

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

I.T.A No. 148/Agra/2018 6

considered opinion, the ld. CIT)A) decision was just fair, reasonable and as per

law.

8.

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.

9.

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.

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