“cost of improvement”

Capital GainsSection 55Section 55749 judgments

The decision most relied on for cost of improvement is CIT v. Kasturi Estates (P.) Ltd. (62 ITR 578), cited in 25 judgments on BharatTax.

Leading authorities on cost of improvement

CIT v. Kasturi Estates (P.) Ltd.

62 ITR 578 · 1966 · High Court

citing judgments

Expenditure incurred to improve property before sale, such as dividing land into plots and laying roads, does not constitute an adventure in the nature of trade if the primary purpose is to obtain a better price for the property.

Arunachalam v. CIT

227 ITR 222 · 1997 · Supreme Court

citing judgments

Expenditure incurred by an assessee to discharge a mortgage created by a previous owner is an allowable deduction in computing capital gains, as it represents the cost of acquisition or perfecting an imperfect title. The assessee's payment to clear the encumbrance is not deductible for capital gains computation.

Commissioner of Income-tax v. Miss Piroja C. Patel

242 ITR 582 · 2000 · High Court

citing judgments

Compensation paid to hutment dwellers for vacating land is an allowable expenditure in computing capital gains, as it relates to the transfer of the asset. Such payments are considered a cost of acquisition or improvement under Section 48 read with Section 55 of the Income-tax Act, 1961.

Naozar Chenoy v. CIT

234 ITR 95 · 1998 · High Court

citing judgments

Expenditure incurred to pay tenants to vacate premises, which are the subject of a sale transaction, is allowable as a deduction in computing capital gains. This is because the expenditure is directly connected to and necessary for effecting the transfer of the property.

Mahindra & Mahindra Ltd. v. DCIT, 313 ITR (AT) 263 (SB)

110 ITD 59 · 2008 · ITAT

citing judgments

The Assessing Officer cannot improve his assessment by adopting a new theory during reassessment proceedings.

Mrs. June Perrett v. Income-tax Officer

298 ITR 268 · 2008 · High Court

citing judgments

Payment made to secure an order of eviction and evict an unauthorized occupant can be treated as a cost of improvement.

Judgments citing cost of improvement

Feroze Gani, Aluva vs. ITO, Kochi

In the result, the appeal filed by the assessee is partly allowed

ITA 194/COCH/2025[2016-17]Status: DisposedITAT Cochin08 Apr 2025AY 2016-17

Bench: Shri Inturi Rama Rao

For Appellant: Sri.Jameskutty Antony, CAFor Respondent: Sri.Sanjit Kumar Das, CIT-DR

Section 139(1)Section 144C(13)Section 148

passed draft assessment order on 12th March, 2024 proposing to make addition on account of capital gains by disallowing the cost of improvement of Rs.18,58,803 as against the total claim of Rs.22,58,815. 3. Aggrieved by the above, an objection was filed before the Dispute Resolution Panel ... appeal before the Tribunal in the present appeal. It is submitted that the appellant had produced evidence in support of the cost of improvement undertaken on the said property in the form of invoice copy of Rs.2,00,000 of Sri.Samuel Thomas and Rs.2,00,012 of Sri.Abraham George

Surjit Kour Chahal, New Delhi vs. ACIT Circle 65(1), New Delhi

Appeal of the assessee is dismissed

ITA 2304/DEL/2023[AY 2011-12]Status: DisposedITAT Delhi04 Apr 2025

Bench: Shri Vikas Awasthyआअसं.2304/िद"ी/2023 (िन.व. 2011-12) Surjit Kour Chahal, 2979/1, Gali No. 11, Main Shiv Mandir Road, Ranjit Nagar, New Delhi 110008 ...... अपीलाथ"/Appellant Pan: Adypc-2940-C बनाम Vs. Assistant Commissioner Of Income Tax, Circle 65(1), Civic Centre, J.L Nehru Marg, ..... "ितवादी/Respondent New Delhi 110002 अपीलाथ" "ारा/ Appellant By : None "ितवादी"ारा/Respondent By : Ms. Shivani Bansal, Sr. Dr & Shri Om Prakash, Sr. Dr सुनवाई क" ितिथ/ Date Of Hearing : 10/01/2025 घोषणा क" ितिथ/ Date Of Pronouncement : : 04/04/2025 आदेश/Order Per Vikas Awasthy, Jm: This Appeal By The Assessee Is Directed Against The Order Of Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (Hereinafter Referred To As 'The Cit(A)') Dated 18.06.2023, For Assessment Year 2011-12. 2. This Appeal Was Filed By The Assessee In August 2023 & The First Notice Was Sent To The Assessee On 11.09.2023 For The Hearing Fixed On 04.10.2023. The Notice Was Sent Through Rpad & Email On The Addresses Mentioned In Form No. 36. On The Date Fixed None Appeared To Represent The Assessee. Thereafter, The Appeal

For Appellant: NoneFor Respondent: Ms. Shivani Bansal, Sr. DR and Shri Om Prakash, Sr. DR

Section 142(1)Section 148Section 54Section 69A

Term Capital Gain on sale of immovable property as under: Sales Consideration : Rs.28,00,000/- Less: Cost of Acquisition : Rs.63,200/- (after indexation) Cost of improvement in (1989-90) : Rs.10,33,430/- (after indexation) Cost of improvement in 1991-92 : Rs.4,73,080/- (after indexation) Deduction ... Long Term Capital Gain (loss) : - (Rs.17,710/-) 4.1. The AO recomputed LTCG at Rs.15,52,000/- after denying cost of acquisition and cost of improvement claimed by the assessee. In First Appellate proceedings, the CIT(A) partly accepted assessee’s contentions and allowed cost of acquisition. However

Ramkishan, Aligarh vs. ITO 4(1)(3) Aligarh, Aligarh

In the result, the appeal of the assessee is allowed for statistical purpose

ITA 58/AGR/2025[2018-19]Status: DisposedITAT Agra03 Apr 2025AY 2018-19

Bench: Shri Sunil Kumar Singh & Shri Brajesh Kumar Singh[Assessment Year: 2018-19]

Section 142(1)Section 147Section 148Section 250Section 48

noted that the assessee had claimed deduction u/s 48 of the Act towards cost of acquisition with indexation of Rs.57,96,864/- and cost of improvement with indexation of Rs.28,62,931/-. In this regard, the Assessing Officer asked the assessee to furnish the following:- i. Purchase deed

Suryanarayanan Ramachandran, Kochi vs. ITO, Ward 3, Aluva

ITA 155/COCH/2025[2015-16]Status: DisposedITAT Cochin28 Mar 2025AY 2015-16

Bench: Shri Inturi Rama Rao

For Appellant: Sri.K.Sankaranarayanan, CAFor Respondent: Smt.Leena Lal, Senior AR

Section 143(3)Section 54E

While computing capital gains, the appellant had adopted fair market value of the property as on 01.04.1981 at Rs.4,89,900 and the cost of improvement at Rs.2 lakh in the financial year 1990-1991. However, the AO rejecting the above method, had adopted the fair market value ... property at Rs.2,12,108 by adopting backward calculation based on the value as per the sale deed. The Assessing Officer adopted the cost of improvement at Rs.1,50,000 as against Rs.2 lakh claimed by the assessee, in the absence of proof. Based on the above methodology, the appellant

Lala Ram Bagra, Jaipur vs. ITO, Jaipur

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 1327/JPR/2024[2010-11]Status: DisposedITAT Jaipur28 Mar 2025AY 2010-11

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: NoneFor Respondent: Sh. Gautam Singh Choudhary, Addl. CIT a

Section 142(1)Section 144Section 148Section 234ASection 50CSection 548Section 54F

erred in approving the AO's order in which cost of acquisition as on 01.04.1981 was not taken correctly and credit for cost of improvement was not given. 6. The CIT-(A) has erred in approving the AO's order in which claim u/s 54F & u/s 548 was not given

Thaliath Jacob Jose, Ernakulam vs. ITO, Corporate Ward 2(1), Kochi

In the result, the appeal filed by the assessee stands allowed for statistical purposes

ITA 879/COCH/2024[2015-16]Status: DisposedITAT Cochin27 Mar 2025AY 2015-16

Bench: Shri Inturi Rama Rao, Am Assessment Year: 2015-16 Thaliath Jacob Jose .......... Appellant Vi/5, Thaliath Exports, Synagogue Lane Jew Town, Kochi 682002 [Pan: Aatpt1794R] Vs. The Income Tax Officer .......... Respondent Corporate Ward-2(1), Kochi

For Appellant: Shri Joyel George, CAFor Respondent: Smt. Leena Lal, Sr. D.R

Section 147Section 148

computed the capital gains. It is further submitted that the appellant had filed additional evidence before the CIT(A) in support of the cost of improvement, etc. The CIT(A), without considering the additional evidence, had merely confirmed the addition made by the AO. 3 Thaliath Jacob Jose ... During the course of proceeding before the CIT(A), the appellant had filed additional evidence in support of incurring cost of improvement, etc. The CIT(A), without admitting the additional evidence and without adverting to the statement of facts, merely confirmed the action of the AO . Therefore, in order

Jagdev Singh, Ambala vs. ITO Ward4, Yamuna Nagar

In the result, appeal filed by the Assessee is allowed for statistical purposes

ITA 101/CHANDI/2024[2007-2008]Status: DisposedITAT Chandigarh27 Mar 2025AY 2007-2008

Bench: SHRI. LALIET KUMAR (Judicial Member), SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Ajay Jain, C.AFor Respondent: Shri Vivek Vardhgan, Addl. CIT, Sr. DR

Section 147Section 148Section 54BSection 54F

land situated in another village without appreciating the area, quality of land sold by appellant. The Ld. AO could not deducted the cost of improvement made by assessee after 01.04.1981. The Ld. AOhas wrongly invoiced the provisions of section 147/148 of Income Act without establishing the fact that the assesses ... taxable capital gain after exemption & deduction of cost of improvement. The learned assessing officer has not served the requisite notice u/s 148 , 143(2) & 144 of Income Tax Act & therefore the assessment is bad & deserves to be quashed. It was also submitted that the Ld. AOhas no jurisdiction over

Vishalkumar Hareshbhai Darbar, Botad vs. The ITO, Ward-1(8), Bhavnagar

In the result, appeal of the assessee is allowed for statistical purposes

ITA 2148/AHD/2024[2022-23]Status: DisposedITAT Ahmedabad27 Mar 2025AY 2022-23

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokar

For Appellant: Shri Samir Vora, ARFor Respondent: Shri Rignesh Das, Sr.DR

Section 143(3)Section 250

completed the assessment ex parte under section 143(3) r.w.s. 144B of the Act and disallowed the entire claim of indexed cost of improvement amounting to Rs.93,45,517/-, thereby determining the total income at Rs.96,85,537/-. 5. Aggrieved, the assessee filed an appeal before the learned ... appeal on the ground of non-compliance to the notices of hearing and thereby confirming the disallowance of entire claim of indexed cost of improvement at Rs.93,45,517/-. 2.2 That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) has grievously

Madanraj Hamirmal Shah, Mumbai vs. ITO, Erode

In the result the appeal of the assessee is partly allowed

ITA 1335/CHNY/2024[2012-13]Status: DisposedITAT Chennai26 Mar 2025AY 2012-13

Bench: Shri Manu Kumar Giri & Shri S.R.Raghunathaआयकरअपीलसं./Ita Nos.: 1334 & 1335/Chny/2024 िनधा"रणवष" / Assessment Years: 2011-12 & 2012-13 Madanraj Hamirmal Shah Income Tax Officer, C-405, Royal Samrat, Ward -1(2), S.V. Road,Goregoan West, V. Erode. Mumbai – 400 062. [Pan: Adwpm-2343-M] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ"कीओरसे/Appellant By : Shri. P.C. Jain, Advocate & Shri. Mohit Bangani, Advocate ""थ"कीओरसे/Respondent By : Shri. P. Vijaideepan, Jcit सुनवाई की तारीख/Date Of Hearing : 11.02.2025 घोषणा की तारीख/Date Of Pronouncement : 26.03.2025

For Appellant: Shri. P.C. Jain, Advocate &For Respondent: Shri. P. Vijaideepan, JCIT

Section 147Section 148

impugned addition also needs to be deleted. After considering the submissions of the assessee, the ld.CIT(A) has confirmed the disallowance of cost of improvement in his order dated 06.03.2024 as the assessee has not furnished any evidence in support of the claim by holding as under: 6. FINDINGS & DECISION ... support of the same. Therefore, the AO passed an order u/s.143(3) r.w.s.147 of the Act on 31.12.2019by denying the deduction of cost of improvement of Rs.23,50,000/- along with the cost inflation index and computed the long term capital gain at Rs.39,06,425/-. Aggrieved

Madanraj Hamirmal Shah, Mumbai vs. ITO, Erode

In the result the appeal of the assessee is partly allowed

ITA 1334/CHNY/2024[2011-12]Status: DisposedITAT Chennai26 Mar 2025AY 2011-12

For Appellant: Shri. P.C. Jain, Advocate &For Respondent: Shri. P. Vijaideepan, JCIT

Section 147Section 148

Deputy Commissioner of Income Tax, Non-Corporate Circle 7(1), Chennai vs. Vellore Subramanian Saravanan, Chennai

In the result, appeal filed by the Re

ITA 1132/CHNY/2023[2015]Status: DisposedITAT Chennai25 Mar 2025

Bench: Shri Aby T. Varkey & Shri Jagadish

For Appellant: Mr. D. Anand, AdvocateFor Respondent: Ms. Anita, Addl. CIT

Section 54F

occupied a portion of the land sold by the appellant costing Rs.98,12,720/ sold by the appellant costing Rs.98,12,720/- as cost of improvement/ cost incurred as cost of improvement/ cost incurred to complete the sale of land. complete the sale of land. 3. At the time ... against the action of the Ld.CIT(A) disallowing the against the action of the Ld.CIT(A) disallowing the deduction deduction claimed on cost of improvement of land cost of improvement of land at Perambakkam to the tune of Perambakkam to the tune of Rs.97,07,735/- while computing the LTCG

Vijay Kumar Gupta, Rishikesh vs. Income-Tax Officer National Faceless Assessment Centre Delhi, Rishikesh

Appeal is partly allowed

ITA 192/DDN/2024[2014-15]Status: DisposedITAT Dehradun21 Mar 2025AY 2014-15

Bench: Shri Satbeer Singh Godara & Shri M. Balaganesh(Through Video Conferencing) Assessment Year: 2014-15 Sh. Vijay Kumar Gupta, Vs. Income Tax Officer, Hig-8, Rishilok Colony, Ward-1(4)(1), Nehru Marg, Rishikesh, Rishikesh Uttarakhand Pan :Bcepg9295E (Appellant) (Respondent) Assessee By Sh. K.K. Juneja, Adv. Department By Sh. A.S. Rana, Sr. Dr

perused. 3. It is noticed at the outset that the assessee herein is aggrieved against both the learned lower authorities’ action disallowing/adding his cost of improvement and transfer etc., to the tune of Rs.10,80,277/- thereby making the consequential long- term capital gains addition; in the course of assessment ... discussion. 4. Both the learned representatives reiterate their respective stands against and in support of the impugned long-term capital gains disallowance/addition representing cost of improvement and expenditure on transfer etc. We make it clear that there is no denial to the fact of the assessee having sold/transferred his twin

Vinay Ramsharandas Agrawal, Nagpur vs. Principal Commissioner of Income Tax-II, Nagpur

In the result, appeal by the assessee stands allowed

ITA 110/NAG/2023[2017-18]Status: DisposedITAT Nagpur21 Mar 2025AY 2017-18

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Kishore P. DewaniFor Respondent: Shri Sandipkumar Salunke

Section 143(3)Section 263

revision proceedings are not justified. Further, the assessee in support of his claim furnished working of Indexed Cost of acquisition and Indexed Cost of Improvement. However, he has failed to submit documentary evidence in this regard except copy of the sale deed of the land sold.” 9. The learned PCIT ... purpose of 22,50,00,000 Capital Gain b Deduction u/s 48 (i) Cost of acquisition with indexation 1,10,53,125 (ii) Cost of improvement with 7,72,61,368 indexation (iii) Expenditure wholly and exclusively 1,01,70,000 in connection with transfer Total Deductions

Gyan Chand Khandelwal, Jaipur vs. Addljcit(A)-8 Delhi, Delhi

ITA 1203/JPR/2024[2012-13]Status: DisposedITAT Jaipur21 Mar 2025AY 2012-13

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri K.L. Moolchandani, I.T.PFor Respondent: Shri Gautam Singh Choudhary, JCIT a

Section 143(3)Section 250Section 54

circumstances of the case, the Authorities Below have factually and legally erred in making addition of Rs.7,77,941/- by disallowing the cost of Improvement in the new asset for claiming deduction u/s 54 of the Act in absence of supporting details and documents, without appreciating the fact that

Meena Gupta, Delhi vs. ACIT Central Circle-14, New Delhi

In the result, the appeal of the assessee in ITA No

ITA 1418/DEL/2024[2012-13]Status: DisposedITAT Delhi21 Mar 2025AY 2012-13

Bench: Ms. Madhumita Roy & Shri Naveen Chandra

For Appellant: Shri Madhav Kapoor, AdvFor Respondent: Shri Amit Katoch, Sr. DR

Section 153CSection 271(1)(c)

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘E’ BENCH, NEW DELHI BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER, AND SHRI NAVEEN

Subhash Chand Dhingra, New Delhi vs. ACIT, Cir Int Tax 1(2)(2), New Delhi

Appeal is dismissed

ITA 1184/DEL/2023[2019-20]Status: DisposedITAT Delhi21 Mar 2025AY 2019-20

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahman

For Appellant: Sh. Rachesh Sinha, AdvFor Respondent: Ms. Rini Handa, Sr. DR

Section 143(3)Section 49(1)

construction incurred by Late Smt. Leela Dhingra TOTAL(A) 2,12,86,534 5,96,02,295.20 Cost of improvement incurred by the appellant C Free Hold Charges 2010-11 8,68,692 D Cost of Construction 70,16,773 of New Building TOTAL

Joyce Stanislaus Aranha, Mumbai vs. Income Tax Officer, 10(1)(3), Mumbai

In the result, the appeal of the assessee is allowed

ITA 4194/MUM/2024[2017-18]Status: DisposedITAT Mumbai21 Mar 2025AY 2017-18

Bench: Shri Amarjit Singh & Shri Anikesh Banerjeeassessment Year 2017-18

For Appellant: Shri Ashok BansalFor Respondent: Shri Asif Karmali, Sr. DR

Section 143(2)Section 143(3)Section 250Section 54F

assessing officer noticed that the new house purchased also comprised an amount of Rs. 1,89,07,065/- as expenditure incurred as cost of improvement relating to the house purchased. The assessing officer was of the view that the residential house purchased was only 10 years old therefore, the assessee

Gopal Ji Mishra, Lucknow vs. ITO-6(5), Lucknow

In the result, the appeal of the assessee stands allowed for statistical purposes

ITA 349/LKW/2024[2013-14]Status: DisposedITAT Lucknow20 Mar 2025AY 2013-14

Bench: Shri. Sudhanshu Srivastavaassessment Year: 2013-14 Gopal Ji Mishra V. The Income Tax Officer 6(5) K-1218, Ashiana Lucknow - New Kanpur Road, Lucknow Tan/Pan:Akjpm8317M (Appellant) (Respondent) Appellant By: Shri P. K. Kapoor, C.A. Respondent By: Shri Sanjeev Krishna Sharma, D.R. Date Of Hearing: 18 03 2025 Date Of Pronouncement: 20 03 2025 O R D E R

For Appellant: Shri P. K. Kapoor, C.AFor Respondent: Shri Sanjeev Krishna Sharma, D.R

Section 133(6)Section 142(1)Section 147Section 148Section 271(1)(c)Section 50CSection 69A

property. 6.2 BECAUSE while computing the long-term capital gain at Rs.25,92,873/- the Id. Assessing Officer firstly did not consider the cost of improvement incurred by the assessee and secondly the Id. Assessing Officer wrongly adopted the stamp value of Rs.33,52,500/- as the sale consideration

Shree Auro Iron Limited, Jaipur vs. Principal Commissioner of Income Tax-I, Jaipur

In the result, this appeal of the assessee is allowed

ITA 788/JPR/2024[2016-17]Status: DisposedITAT Jaipur12 Mar 2025AY 2016-17

For Appellant: Shri Pravin Saraswant, CAFor Respondent: Mrs. Alka Gautam, CIT DR

Section 142(1)Section 143Section 145ASection 147Section 148Section 151Section 263Section 48

through cash or through bank account. Thus, it is clear that the interest expense amounting to Rs.54,30,310/- was not allowable as cost of improvement while calculating long term capital gain on sale of this property but the same was allowed by AO with indexation.” 2.3 Assessee replied ... interest through cash or through bank account. Thus it is clear that the interest expense of Rs.54,30,310/- was not allowable as cost of improvement while calculating the LTCG on sale of the property but the same was allowed by the AO” 1.2 Para No. 11 of the page

Ram Swaroop Balai, Jaipur vs. DCIT, Circle -7, Jaipur

In the result, appeal of the assessee is allowed

ITA 225/JPR/2024[2011-12]Status: DisposedITAT Jaipur12 Mar 2025AY 2011-12

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI GAGAN GOYAL (Accountant Member)

For Appellant: Shri S.L. Jain, AdvFor Respondent: Shri Anup Singh, Addl. CIT-DR

Section 147Section 234ASection 250

outcome of the improvement made in the land and the cost of this improvement made is allowed as expenses on account of cost of improvement while calculating capital gain under income tax act. In this case the sale consideration is decided for Rs. 5,21,00,000/- in the registered ... appellant has made any expenses as claimed by the appellant like conversion expenses including incidental expenses, the same has to be claimed under cost of improvement. In order to claim the same appellant needs to prove that payment for such expenses has been made and appellant has to submit documentary