SALOCHANA CHAUHAN,SOLAN vs. INCOME TAX OFFICER, WARD SHIMLA, SHIMLA

आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2018-19 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC, [CIT(A)] dated 25.08.2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 147 r.w.s. 144B of the Act on 28.02.2023. The sole issue that fall for our consideration is assessee’s claim of cost of improvement. Having heard rival

submissions and upon perusal of case records, the appeal is disposed- off as under. 2. Upon perusal of case records, it could be seen that the assessee sold 10.18 Bighas of land for Rs.6 Crores during this year. To verify the same, the case was reopened. The assessee declared Long-Term Capital Gains of Rs.51.85 Lacs. While computing such gains, the assessee claimed indexed cost of improvement for Rs.175.87 Lacs. The stated cost of improvement was supported merely on the basis of cash withdrawn by the assessee from its bank accounts during FYs 2004-05 to 2017-18 which has been tabulated in the assessment order. In the absence of any documentary evidences thereof, the explanation stood rejected by Ld. AO. Finally, the indexed cost of improvement was denied to the assessee. The Ld. CIT(A) confirmed the action of Ld. AO for the same very reasons. Aggrieved, the assessee is in further appeal before us. 3. It is quite clear that the only evidence as furnished by the assessee is cash withdrawals from the bank. No other documentary evidence has been furnished by the assessee in support of its claim of cost of improvement. In our considered opinion, mere cash withdrawals from bank account do not establish the case of the assessee in any manner. No cash flow statements have been furnished by the assessee from FYs 2004-05 to 2017-18 to support her claim. Despite the fact that he improvement was made as late as in FY 2017-18, the assessee was unable to furnish any single piece of acceptable document which would demonstrate such an improvement on the land

under consideration. Except for some random photographs, no other documents have been furnished by the assessee. The claim of the assessee, in our considered opinion, has remained unsubstantiated. It could be seen that the assessee has failed to produce primary documentary evidence such as bills, invoices, vouchers or receipts to substantiate the entire claim of cost of improvement. Mere cash withdrawals from the bank, by themselves, do not conclusively establish that the amounts withdrawn were actually utilized for improvement of the capital asset. At the same time, the evidence of regular cash withdrawals cannot be brushed aside altogether. It lends some support to the assessee's contention that funds were available for carrying out improvement. Further, having regard to the nature of the asset, the lapse of time, and the practical difficulty in preserving records relating to improvements effected several years earlier, it would not be appropriate to reject the claim in its entirety merely for want of complete documentary evidence. Considering the totality of the facts and circumstances of the case and to meet the ends of justice, we are of the considered view that a reasonable estimate would be justified. Accordingly, we direct the Assessing Officer to allow 50% of the indexed cost of improvement as claimed by the assessee and disallow the balance 50%. This direction is issued as an equitable measure in the peculiar facts of the present case and shall not be treated as a precedent for cases where no material whatsoever is placed on record. No other ground has been urged in the appeal.

-Sd- -Sd- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AS Dated: 03-08-2026 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

ASSISTANT REGISTRAR

ITAT CHANDIGARH