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Facts
The assessee sold an immovable property but did not file a return of income or declare capital gains for AY 2013-14. The AO issued a notice u/s 148, completing assessment and disallowing a Section 54 claim and cost of improvement. While CIT(A) allowed Section 54, the disallowance of indexed cost of improvement (Rs. 7,83,059) for lack of evidence was upheld, leading to this appeal by the assessee.
Held
The Tribunal found that the assessee failed to provide evidence for the claimed cost of improvement. Therefore, the claim could not be allowed, and the Tribunal upheld the orders of the lower authorities, finding no reason to interfere. The appeal filed by the assessee was dismissed.
Key Issues
Whether the disallowance of the indexed cost of improvement for want of evidence was justified.
Sections Cited
139(1), 148, 143(3), 147, 54
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Income Tax Appellate Tribunal, “SMC” BENCH, COCHIN
Before: Shri Inturi Rama Rao
Asst.Year 2013-2014 Simon Thanathara Joseph The Income Tax Officer Thanathara House v. Ward 2(2), Range 2 Dhanya Nagar, Anchery PO Thrissur. Thrissur – 680 006. PAN : AIJPJ2752M. (Appellant) (Respondent) Appellant by : Smt.Preetha S.Nair, Advocate Respondent by : Smt.Leena Lal, Sr.AR Date of Date of Hearing : 26.03.2025 Pronouncement : 08.04.2025 O R D E R This appeal filed by the assessee is directed against the order of the Commissioner of Income-tax (Appeals) [“CIT(A)” for short] dated 22.01.2025 for the assessment year 2013-2014.
Brief facts of the case are that the appellant is an individual. No regular return of income was filed u/s.139(1) of the Income-tax Act, 1961 (“the Act”) for the assessment year 2013-2014. However, the Assessing Officer (“the AO”) issued notice u/s.148 of the Act based on the information that during the previous year relevant to the assessment year under consideration the appellant had sold immovable property for a consideration of Rs.34,50,000 and failed to return the capital gain. Accordingly, a notice u/s.148 of the Act was issued on 28th March, 2018. In response to the notice u/s.148 of the Act, the appellant filed . Simon Thanathara Joseph. return of income on 26th April, 2018 declaring an income of Rs.1,94,500. Against the said return of income, the assessment was completed by the AO vide order dated 5th December, 2016 u/s.143(3) r.w.s. 147 of the Act at a total income of Rs.17,97,977 While doing so, the AO disallowed the claim u/s.54 of the Act of Rs.7,74,500 on the ground that the new property was purchased jointly along with his wife with the intention to transfer the property to his wife in the subsequent year.
Being aggrieved, the appellant was filed an appeal before the CIT(A), who vide the impugned order, allowed deduction u/s.54 of the Act. However, has confirmed the addition on account of cost of improvement to the property for want of evidence.
Being aggrieved, the appellant is in appeal before me in the present appeal. It is submitted that the CIT(A) ought not have disallowed the benefit of index cost improvement of Rs.7,83,059 as the appellant had incurred cost of improvement during the period 2007- 2008, 2008-2009 and 2011-2012, as the appellant cannot expected to produce evidence after lapse of long period of time.
On the other hand, the learned Sr.DR placing reliance on the orders of the lower authorities submits that no interference is called for.
I heard the rival submissions and perused the material available on record. The issue in the present appeal relates to the disallowance of cost of improvement for want of evidence. It is an undisputed fact that the appellant had failed to adduce the evidence in support of the cost of . Simon Thanathara Joseph. improvement. In the absence of evidence, the claim of cost of improvement cannot be allowed. Accordingly, I do not find any reason to interfere with the orders of the lower authorities.
In the result, the appeal filed by the assessee is dismissed.
Order pronounced on this 08th day of April, 2025.