SEEMA PRASHANT RISALDAR,VADODARA vs. THE DY.CIT, CIRCLE-1(1)(1), VADODARA

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE DR. DRR KUMAR, VICE PRESIDENT AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. No. 44/Ahd/2026 (Assessment Year: 2017-18) Seema Prashant Risaldar, Vs. Deputy Commissioner of 104, Sahyog Olivia, 9/10, Mamta Income Tax, Society, Harinagar Road, Ellora Circle-1(1)(1), Park, Vadodara-390023 Vadodara [PAN No.ADZPR8312G] (Appellant) .. (Respondent) Appellant by : Shri Hemant Suthar, AR Respondent by : Shri Rameshwar P. Meena, Sr. D.R. 02.03.2026 Date of Hearing Date of Pronouncement 27.04.2026 O R D E R PER: SUCHITRA KAMBLE, JUDICIAL MEMBER: The appeal filed by the assessee is against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi on 27.11.2025 for A.Y. 2017-18.

“1. The Ld. CIT(A), National Faceless Appeal Centre (NFAC) has erred in law and in facts in rejecting the admission of the additional evidences submitted before him during the course of appellate proceedings. The Ld. CIT(A) ought to have admitted the additional evidences and based on such additional evidences, he ought to have adjudicated the appeal, as the appellant was prevented by sufficient cause from producing the same before the Ld. A.O. The action of the Ld. CIT(A) is erroneous in law and in facts and accordingly, the additional evidences be admitted. 2. The Ld. CIT(A), National Faceless Appeal Centre (NFAC) has erred in law and in facts in upholding the action of the Ld. A.O. in the disallowance of cost of improvement and corresponding indexation without considering the fact that the

ITA No. 44/Ahd/2026 Seema Prashant Risaldar vs. DCIT Asst.Year–2017-18 - 2 - appellant has incurred the cost for improvement of the capital asset transferred during the year resulting into the capital gains. 3. The Ld. CIT(A), NFAC has erred in law and in facts in not referring the matter to Ld. DVO for valuation of the property, if the valuation adopted by the appellant is not acceptable to him. The action of the Ld. CIT(A) in not referring the matter to DVO and out-rightly rejecting the valuation adopted by the appellant is bad in law and thus, prayed to be set aside. 4. The Ld. CIT(A), NFAC, has erred in law and in facts without accepting the submission as made before him and without discussing the case of appellant on merits and confirmed the action of Ld. A.O. as under: i. The Ld. CIT(A), NFAC has erred in law and in facts in upholding the action of the Ld. A.O. in not allowing the cost of improvement of Rs. 16,71,130/- and its indexation of Rs. 79,32,614/- in the computation of the capital gains which is prayed to be allowed. ii. The Ld. CIT(A), NFAC has erred in law and in facts in confirming the action of the Ld. A.O. in the addition of an amount of Rs. 79,26,290/- as capital gains. The impugned addition of Rs. 79,26,290/- being bad in law and in facts is prayed to be deleted. 5. Your appellant craves liberty to add, alter, amend substitute or withdraw any of the ground(s) of appeal hereinabove contained.” 3. The assessee filed return of income on 25.072.017 at Rs. 45,02,940/- and claimed capital gain on the sale of immovable property of Rs. 2.5 crores. The case was selected for scrutiny and notice under Section 143(2) was issued on 14.08.2018. Notice under Section 142(1) along with questionnaire was issued which was partly complied by the assessee. The Assessing Officer observed that the assessee claimed expenses on account of improvement / alteration and details of which are as under:

Improvement/Alterations Dt. 01.04.1988 for 1st floor construction Rs.252350 Dt. 01.04.1991 for Bal 1st Floor construction Rs.415780 Dt. 01.04.1997 for 2nf floor construction Rs.862500 Dt. 01.04.2006 for total renovation Rs.140500 But the assessee did not file any bills/vouchers/agreements/supporting evidences in respect of the sale improvement/renovation of the house. The

ITA No. 44/Ahd/2026 Seema Prashant Risaldar vs. DCIT Asst.Year–2017-18 - 3 - assessee claim improvement cost in the year 1988 but in absence of details the Assessing Officer made addition of Rs. 79,26,290/- on account of unexplained capital gain.

Date Amount (Rs.) 01.04.1988 2,52,350 01.04.1991 4,15,780 01.04.1997 8,62,500 01.04.2006 1,40,500 Total 16,71,130 6. Thus, the assessee has given all the details of improvement/renovation and has submitted the photos of the residential house to the Assessing Officer. The assessee purchase a new residential house and claim deduction of Rs. 1,25,64,450/- under Section 54 and under Section 54EC of the Act. The Ld. AR submitted that the CIT(A) has not at all consider the cost of improvement of renovation and therefore, the indexation was not justified thereby making addition.

ITA No. 44/Ahd/2026 Seema Prashant Risaldar vs. DCIT Asst.Year–2017-18 - 4 - 8. We have heard both the parties and perused all the relevant materials available on record. From the perusal of the records it appears that the assessee did get permission for construction of first floor in the year 1988 and the expenditure which was incurred by the assessee from time to time was given on Page 5 of order of the CIT(A). The CIT(A) observed that the assessee has not submitted proper billing of expenses, this cannot deny the fact that there was a construction activity for first floor and the assesse incurred the expenditure. In fact, the Assessing Officer as well as CIT(A) has accepted this fact, therefore, the addition of entire cost of improvement cannot be added as the cost of construction/renovation expenditure should have been taken only count when the date acquisition and value at that stage which is in the year 1988. Thus, to the extent of Rs. 10,00,000/- that should be taken into account instead of Rs. 16,71,130/- thus the addition should restrict to that extent.

Sd/- Sd/- (DR. BRR KUMAR) (SUCHITRA KAMBLE) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 27/04/2026 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad