RYDAK ENTERPRISES & INVESTMENT LTD.,KOLKATA vs. D.C.I.T.,CIRCLE-7(2), KOLKATA

The assessee has taken five grounds of appeal, but its grievance revolves around a single issue, namely ld. CIT(Appeals) has erred in confirming the disallowance of Rs.12,34,541/-, which was claimed by the assessee against improvement cost while determining the capital gain required to be assessed in the hands of the assessee on sale of a property.

Brief facts of the case are that the assessee has filed its return of income on 21.09.2015 declaring total income of Rs.4,03,00,432/- with deemed total income under section 115JB of Rs.5,50,90,216/-. The case of the assessee was selected for scrutiny assessment and a notice was issued under section 143(2) of the Income Tax Act. The ld. Assessing Officer has discussed this issue in paragraph no.

The ld. Assessing Officer has observed that a long-term capital gain arose to the assessee after indexation was Rs.4,24,96,684/-. Thereafter he took note of the computation made by the assessee. It is available on page no. 4 of the assessment order. The total sale consideration received by the assessee was of Rs.5,97,50,000/- The assessee has debited improvement cost in this computation, which has been disallowed to the assessee by the ld. Assessing Officer and an addition of Rs.12,34,541/- was made to the capital gain computed by the assessee.

Assessment Year: 2015-2016 Rydak Enterprises & Investment Ltd. 4. Thus the grievance of the assessee before the ld. CIT(Appeals) was that the ld. Assessing Officer has erred in disallowing a sum of Rs.12,34,541/- which was claimed by the assessee towards improvement cost. The ld. CIT(Appeals) was not satisfied with the contention of the assessee because it could not produce any evidence in support of such expenditure.

Before us, ld. Counsel for the assessee has filed an application for additional evidence to place on record the documents, which are being filed in the paper book running into 92 pages. He submitted that one of the expenditures in these documents is conversion charges paid to Delhi Development Authority. The details of such payments are available on page no. 26 of the paper book. Earlier this property was leasehold property. The assessee got it converted into freehold and paid roughly Rs.12,00,366/-. The assessee has sought permission to place on record the letter of the Delhi Development Authority, copy of the Bank cheque, which were paid by it and certain other details.

With the assistance of ld. Representatives, we have gone through the record carefully. After perusal of the documents on page no. 26, we are of the view that their genuineness is not much doubtful because these are documents generated at public authority. The payments have been made through account payee cheque, copy of the cheque book along with bank statements are sought to be filed by the assessee by way of additional evidence.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 17/01/2024.