KAMLESH GUPTA,DELHI vs. ITO, WAR45D-40(1), NEW DELHI
What did the Tribunal hold?
The Tribunal acknowledged that supporting bills were unavailable due to the passage of time. However, it allowed a sum of Rs. 2 lakhs as cost of improvement, directing the Assessing Officer to recompute the capital gain with indexation benefit.
What were the facts?
The assessee claimed cost of improvement for a property sale, but failed to provide supporting bills for a significant portion of the expenses. The Assessing Officer disallowed Rs. 3,49,412/- due to lack of evidence.
What were the issues?
Whether the disallowance of cost of improvement for lack of documentary evidence was justified, and if a reasonable estimate could be allowed.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘SMC’ BENCH,
Before: SHRI N.K. BILLAIYA
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:
This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] –14, New Delhi dated 07.06.2018 pertaining to assessment year 2015-16.
The solitary grievance of the assessee is that the ld. CIT(A) erred in confirming the disallowance of Rs. 3,49,412/- being the amount spent for addition made in flat during F.Ys. 2004-05, 2006-07 and 2008-09.
Facts on record show that the assessee is a house-wife with no business activity carried out during the year. The return of income was filed on 31.08.2015 declaring income of Rs. 8,15,070/-. The return was selected for scrutiny assessment and, accordingly, statutory notices were issued and served upon the assessee.
During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has sold out entire first floor of residential property at UU 151, Pitampura, Delhi for a consideration of Rs. 36 lakhs. Since the assessee is half-owner of the said property, she has shown sale consideration of her share at Rs. 18 lakhs and by claiming cost of acquisition of Rs. 1,59,240/- and cost of improvement after indexation at Rs. 15,43,517/- disclosed long term capital gain of Rs. 97,243/-.
The assessee was asked to submit all the details relating to cost of improvement. The assessee, vide reply dated 11.12.2017, furnished the bills relating to cost of improvement amounting to Rs. 8,41,891/- out of total expenses of Rs. 11,91,303/-. However, no bills/documentary evidences were furnished in support of her claim. The Assessing Officer, accordingly, disallowed Rs. 3,49,412/- and recomputed capital gain at Rs. 698664/-.
The assessee carried the matter before the ld. CIT(A), but without any success.
Before me, the husband of the assessee appeared and stated that all the details were furnished during the course of assessment proceedings. It is the say of the representative that since more than 8 years have elapsed, supporting bills were not available. He further pointed out that there are withdrawals from the bank account which were used for making improvement in the said floor which was sold. The representative showed his helplessness in producing the supporting bills.
The ld. DR strongly supported the findings of the lower authorities.
I have carefully considered the orders of the authorities below. There is no dispute that full details were furnished during the assessment proceedings itself. It is equally true that the assessee could not produce the supporting bills since more than 8 years have elapsed. In my considered view, and looking to the facts of the case in hand, Rs. 2 lakhs can be considered to have been spent on improvement of the first floor. Therefore, I direct the Assessing Officer to allow Rs. 2 lakhs as cost of improvement and recomputed the long term capital gain after giving benefit of indexation to the same.
In the result, the appeal filed by the assessee in is partly allowed.
The order is pronounced in the open court on 12.11.2018.
More judgments on Section 48
- Hansaben Babubhai Patel, Ahmedabad vs ITO, Ward 4(2)(1), AhmedabadITA 2762/AHD/2026[2018-19]Status: Disposed16 Oct 2026AY 2018-19
- Mukesh Mishra, Thane vs ACIT, Circle 1, ThaneITA 5853/MUM/2026[2020-2021]Status: Disposed8 Oct 2026AY 2020-2021
- Dy. Commissioner of Income… vs Thomas Myladiyil Augustine, AhmedabadITA 1131/AHD/2026[2022-23]Status: Disposed30 Sept 2026AY 2022-23
- Banwari, Bhiwadi vs ITO, BhiwadiITA 1710/JPR/2025[2014-15]Status: Disposed29 Sept 2026AY 2014-15
- Reshma Dilip Ramrakhyani, Gandhidham vs ITO Ward 2 Gandhidham, GandhidhamITA 895/RJT/2025[2014-15]Status: Disposed28 Sept 2026AY 2014-15
Latest GST High Court judgments
Search GST case law →- R.K.Service Station, Balasore vs. Commissioner CT And GST Odisha, CuttackOrissa · 31 Oct 2026
- Tankala Soumya vs. Assistant Commissioner Of State Tax, CT And GST, Rayagada Circle, RayagadaOrissa · 31 Oct 2026
- M/S Pooja, Town Hallroad, Cuttack vs. State Tax Officer, Cuttack-I West Circle,CuttackOrissa · 31 Oct 2026
- M/S Chicvogue Fashions Lip, Ganjam vs. State Tax Officer Bhubaneswar- Ii CircleOrissa · 31 Oct 2026
- M/S Priya, Townhall Road, Cuttack vs. Superintendent Cuttack- I Range, CuttackOrissa · 31 Oct 2026