MVD APPAREL PRIVATE LIMITED,DELHI vs. INCOME TAX OFFICER, WARD 17(1), DELHI

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ITA 8784/DEL/2025Status: DisposedITAT Delhi08 July 2026AY 2023-243 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, in the interest of justice, remitted the issue back to the Assessing Officer (AO) to examine the claim for cost of improvement. The assessee was directed to provide all necessary details to the AO.

What were the facts?

The assessee claimed a deduction for the cost of improvement while computing Long Term Capital Gain. This claim was disallowed by the CPC due to lack of specific details in the return of income. The CIT(A) also dismissed the appeal for want of details and supporting evidence.

What were the issues?

Whether the claim for deduction of cost of improvement for computing LTCG is allowable, and if so, on what basis, when the details were not provided in the return or before the lower authorities.

Which sections of the Income-tax Act were involved?

Section 48,Section 154,Section 250,Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI “A” BENCHES, NEW DELHI

Before: SHRI SUDHIR KUMAR & SHRI MANISH AGARWAL

आयकर अपीलीय अिधकरण, िद�ी पीठ�, नई िद�ी INCOME TAX APPELLATE TRIBUNAL DELHI “A” BENCHES, NEW DELHI BEFORE SHRI SUDHIR KUMAR, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA 8784/DEL/2025 िनधा�रण वष�/Assessment Year: 2023-24) MVD APPAREL PRIVATE INCOME TAX OFFICER, LIMITED WARD 17(1) F-90, MEGHA HOUSE, ARAVALI DELHI-110002 Vs. KUNJ, SECTOR-13, ROHINI, DELHI-110085 अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number of Assessee: AAFCM7203B

अपीलाथ� �ारा/Appellant represented by: Adjournment rejected ��थ� �ारा/Respondent represented by: SH Ajay Kumar Arora, SR DR

सुनवाई की तारीख / Date of conclusion of hearing: 05-May-2026 घोषणा की तारीख / Date of pronouncement: 08-Jul-2026 आदेश / ORDER PER MANISH AGARWAL, A.M.: The present appeal is filed by assessee against the order dated 31.10.2025 passed by Ld. Commissioner of Income Tax (A)/ADDL/JCIT(A)-6, Mumbai [“Ld. CIT(A)”] in Appeal No. NFAC/2022-23/10406427 u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of rectification order dated 20.09.2024 passed u/s 154 of the Act pertaining to Assessment Year 2023-24.

2.

At the time of hearing, Ld.AR submitted an adjournment application dated 05.05.2026 which is rejected and both the parties were heard on merits.

ITA 8784/DEL/2025 MVD APPAREL PRIVATE LIMITED

3.

Brief facts of the case are that the assessee company has filed its return of income on 07.08.2023, declaring total income of INR 3,83,04,840/-. The return was processed u/s 143(1) at an income of INR 6,77,08,400/- wherein the claim of cost of improvement claimed out of sale consideration while computing Long Term Capital Gain (“LTCG”) declared under the head “Income from Capital Gain” was disallowed by Central Processing Centre (“CPC”).

4.

Against the said order, assessee filed an appeal before Ld. CIT(A) who vide impugned order dated 31.10.2025, dismissed the appeal of the assessee.

5.

Aggrieved by the order of Ld. CIT(A), assessee is in appeal before the Tribunal by taking various grounds of appeal mentioned in the appeal memo. As all the Grounds of appeal raised by the assessee are with respect to the denial of deduction towards cost of improvement of INR 2,94,03,553/- therefore, they are taken together for consideration.

6.

Heard the contentions of both the parties at length and perused the material on record. In the instant case, the assessee has claimed deduction of the cost of improvement u/s 48 of the Act for the purpose of computing LTCG. The assessee has claimed cost of acquisition at INR 2,16,81,310/-, indexed cost of acquisition of INR 4,29,73,135/- and further claimed cost of improvement with indexation at INR 2,94,03,553/-. The deduction on account of cost of improvement was not allowed by the CPC in absence of specific details in the return of income filed. Even before Ld. CIT(A), the claim of the assessee is rejected for want of details/explanation/supporting evidences. Under these circumstances, in the larger interest of justice, we remit this issue back to the file of AO with the directions to examine the claim of the assessee with respect to cost of improvement and decide in accordance with law. The assessee is also directed to file all the necessary details in respect of claim of cost of improvement. 2

ITA 8784/DEL/2025 MVD APPAREL PRIVATE LIMITED

Accordingly, all the Grounds of appeal raised by the assessee are allowed for statistical purposes.

In the result, appeal filed by the assessee is allowed for statistical purposes. 7. Order pronounced in the open court on 08.07.2026.

Sd/- Sd/- SUDHIR KUMAR MANISH AGARWAL JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 08.07.2026 *Amit Kumar, Sr. P.S*

Copy to: MVD APPAREL PRIVATE LIMITED, F-90, MEGHA HOUSE, ARAVALI KUNJ, 1 SECTOR-13, ROHINI, DELHI, DELHI-110085, DELHI

INCOME TAX OFFICER, WARD 17(1), 2 DELHI, DELHI-110002, DELHI

3 THE PCIT / CIT, 4 THE D.R., ITAT, DELHI BENCH 5 GUARD FILE TRUE COPY

ASSISTANT REGISTRAR / SR. PRIVATE SECRETARY I.T.A.T., DELHI

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