What did the Tribunal hold?

The Tribunal set aside the CIT(A)'s order and restored the matter to the Assessing Officer. The AO was directed to re-examine the facts, consider the evidence produced by the assessee, and pass a speaking order.

The assessee claimed cost of improvement for a property while computing capital gains. The Assessing Officer denied this claim due to the unavailability of bills and vouchers, as the expenses were incurred 15-30 years prior. The assessee argued that the construction was mentioned in the sale deed and that some bills were now located.

What were the issues?

Whether the denial of cost of improvement claim due to unavailability of vouchers for old expenses is justified, and if the matter should be remanded for fresh examination.

Sh. Ajay Gupta vs ACIT | ITAT Chandigarh 2019

आदेश/Order

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order dated 06.09.2018 of the Commissioner of Income Tax (Appeals)-2, Chandigarh [hereinafter referred to as ‘CIT(A)’]. ]. 2. The assessee in this appeal has taken following grounds of appeal:- 1. That on the facts, circumstances and legal position of the case, the Worthy CIT(A) in Appeal No. 10153/2/16-17 dated 06.09.2018

ITA No. 1332/Chd/2018- Shri Ajay Gupta, Chandigarh 2 has erred in passing that order in contravention of the provisions of S. 250(6) of the Income Tax Act, 1961.

That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of Ld. AO in making addition of Rs. 55,56,000/- on account of alleged unavailability of vouchers related to expenses for cost of improvement even when the expenses were incurred 15-30 years back.

That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same.

At the outset, Ld. AR of the assessee has submitted that the sole

issue raised by the assessee in this appeal is regarding the denial of cost

of improvement on the plot alongwith indexation by the Assessing

Officer while computing capital gains on the sale of the property. The

Ld. AR of the assessee has invited our attention to the copy of the sale

deed, wherein, the factum of construction of 8000 square feet has been

mentioned, whereupon, the assessee has also paid stamp duty to the

Collector at the time of registration of the sale deed.

The Ld. Assessing Officer has denied the entire claim of cost of

improvement since the assessee could not provide the necessary bills

and vouchers. The Ld. AR of the assessee has submitted that since the

construction was made more than 15 years back, hence, the assessee

could not locate the bills and vouchers regarding the expenditure

incurred for construction. However, the fact of construction could have

ITA No. 1332/Chd/2018- Shri Ajay Gupta, Chandigarh 3 well been verified by the Assessing Officer by visiting the site or

through other means. That even had there not been any construction,

there was no question of mentioning the same in the sale deed as neither

the purchaser nor the seller could have gained anything by so

mentioning in the sale deed, rather, they have been burdened with

additional stamp duty. The Ld. counsel has further submitted that the

assessee now has located some of the bills and vouchers incurred for

expenditure on construction and that now he is able to produce the same

before the Assessing Officer. The Ld. AR, therefore, has submitted that

in the interest of justice, the matter may be restored to the file of the

Assessing Officer for proper examination of the facts.

Though, the Ld. DR has relied upon the findings of the lower

authorities but has been fair enough to admit that the matter requires

factual examination at the hands of the Assessing Officer.

In view of this, the impugned order of the CIT(A) is hereby set

aside and the matter is restored to the file of the Assessing Officer with

a direction to consider the facts of the case in the light of the

observations made above and also in the light of the evidences as may

be furnished by the assessee and thereafter to pass a speaking order. The

assessee is also directed to promptly appear before the Assessing

Officer, as and when called for, and not to contribute in any manner in

delaying the proceedings.

ITA No. 1332/Chd/2018- Shri Ajay Gupta, Chandigarh 4 In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order dictated and pronounced in the Open Court immediately on completion of hearing on 28.11.2019.

Sd/- Sd/- (अ�नपूणा� गु�ता / ANNAPURNA GUPTA) (संजय गग� / SANJAY GARG) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member Dated : 28.11.2019 “आर.के.” आदेशक��त�ल�पअ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकरआयु�त/ CIT 4. आयकरआयु�त (अपील)/ The CIT(A) 5. �वभागीय��त�न�ध, आयकरअपील�यआ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड�फाईल/ Guard File

आदेशानुसार/ By order, सहायकपंजीकार/ Assistant Registrar

SH. AJAY GUPTA,CHANDIGARH vs. ACIT, C-4(1), CHANDIGARH

What did the Tribunal hold?

What were the facts?

What were the issues?

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