“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

Syed Ahmed Zeeshanuddin, Hyderabad vs. ADIT (International Taxation)-2, Hyderabad

In the result, appeal filed by the assessee in I

ITA 156/HYD/2024[2017-18]Status: DisposedITAT Hyderabad29 Oct 2024AY 2017-18

Bench: Shri Manjunatha G. & Shri K.Narasimha Charyआ.अपी.सं / Ita No.156/Hyd/2024 (निर्धारण वर्ा / Assessment Year: 2017-18)

For Respondent: Shri B.Bala Krishna, CIT, DR

Section 132Section 144C(13)Section 144C(5)Section 148Section 153ASection 153BSection 153CSection 48Section 56

Income tax Act, 1961 (“the Act”), 1961, in the hands of the impugned assessee. 8. (a) The Ld.AO has erred in disallowing the cost of improvements incurred by the assessee without considering the submission made by the assessee. (b) The Ld.AO ought to have appreciated the fact that the assessee ... banking channels. (d) The Ld.AO ought to have appreciated the fact that the cost incurred by the assessee can be considered as proper cost of improvement and eligible to be deducted from the sale consideration received on transfer of capital asset under section 48 of the Income

Smt. Aruna Chaudhary, New Delhi vs. ACIT, New Delhi

In the result, Ground No. 7 in A

ITA 3440/DEL/2017[2011-12]Status: DisposedITAT Delhi25 Oct 2024AY 2011-12

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri C.S. Anand, AdvFor Respondent: Ms. Ritu Sharma, CIT-DR

Section 139Section 147Section 153ASection 254(2)

argument as in respect of agricultural income that that no incriminating material was unearthed in the course of search with respect to the cost of improvement and its indexation and consequently the decision of the case of Kabul Chawla [supra] shall apply. 23. Per contra, the DR relied ... orders of the lower authorities. 24. We find that the additions in the hands of the assessee on account of cost of improvement and its indexation have been made without any incriminating material found from their premises at the time of search. Therefore, following the decision

Smt. Aruna Chaudhary, New Delhi vs. ACIT, New Delhi

In the result, Ground No. 7 in A

ITA 3439/DEL/2017[2009-10]Status: DisposedITAT Delhi25 Oct 2024AY 2009-10

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri C.S. Anand, AdvFor Respondent: Ms. Ritu Sharma, CIT-DR

Section 139Section 147Section 153ASection 254(2)

Smt. Aruna Chaudhary, New Delhi vs. ACIT, New Delhi

In the result, Ground No. 7 in A

ITA 3438/DEL/2017[2008-09]Status: DisposedITAT Delhi25 Oct 2024AY 2008-09

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri C.S. Anand, AdvFor Respondent: Ms. Ritu Sharma, CIT-DR

Section 139Section 147Section 153ASection 254(2)

D.Ramgopal, Coimbatore vs. DCIT, Central Circle-1(1), Coimbatore

In the result the appeal of the assessee is allowed

ITA 584/CHNY/2022[2014-15]Status: DisposedITAT Chennai23 Oct 2024AY 2014-15

Bench: Shri Aby T Varkey, Hon’Ble & Shri S. R. Raghunatha, Hon’Bleआयकरअपीलसं./Ita No.: 583 /Chny/2022 िनधा"रणवष" / Assessment Year: 2013-14 Deputy Commissioner Of Income Shri. D. Ramagopal, V. Tax, 14-A, 10Th Street, Central Circle -1, Ganapathypudur, Coimbatore. Ganapathy, Coimbatore – 641 006. [Pan: Akgpr-3621-L] (अपीलाथ"/Appellant) (""यथ"/Respondent) आयकरअपीलसं./Ita No.: 584/Chny/2022 िनधा"रणवष" / Assessment Year: 2014-15 Principal Commissioner Of Shri. D. Ramagopal, V. Income Tax, 14-A, 10Th Street, Central Circle -2, Ganapathypudur, Chennai. Ganapathy, Coimbatore – 641 006. [Pan: Akgpr-3621-L] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ"क"ओरसे/Appellant By : Shri. G.V. Jhabakh, Advocate ""यथ"क"ओरसे/Respondent By : Shri. Nilay Baran Som, Cit सुनवाई क" तारीख/Date Of Hearing : 06.08.2024 घोषणा क" तारीख/Date Of Pronouncement : 23.10.2024 आदेश /O R D E R

For Appellant: Shri. G.V. Jhabakh, AdvocateFor Respondent: Shri. Nilay Baran Som, CIT

Section 132Section 153ASection 50C

computation of long-term capital gain. 6. Further, the ld.AR argued that both the AO and Ld.CIT(A) have erred in rejecting the cost of improvement paid towards court fees of Rs.6,12,328/- paid towards proceedings with TNPID, which is recorded in the registered sale deed ... long-term capital gain. :-7-: ITA. No:583 & 584/Chny/2022 10. Further, the claim of the AR with regard to rejection of sales commission, cost of improvement, renovation expenses, payment made to vacate the tenants and court fees, we note that the ld.AR has failed to provide any documentary evidences

D.Ramgopal, Coimbatore vs. DCIT, Central Circle-1(1), Coimbatore

In the result the appeal of the assessee is allowed

ITA 583/CHNY/2022[2013-14]Status: DisposedITAT Chennai23 Oct 2024AY 2013-14

For Appellant: Shri. G.V. Jhabakh, AdvocateFor Respondent: Shri. Nilay Baran Som, CIT

Section 132Section 153ASection 50C

Lalita Trehan, New Delhi vs. DCIT, Circle Int. Tax 3(1)(1), New Delhi

ITA 3352/DEL/2023[2021-22]Status: DisposedITAT Delhi23 Oct 2024AY 2021-22

Bench: Shri Saktijit Dey & Shri Brajesh Kumar Singh[Assessment Year: 2021-22]

Section 143(3)Section 50CSection 54E

issued notice u/s 142(1) of the Act dated 12.12.2022 requesting to submit the relevant documentary evidences to justify the cost of improvement and land development charges claimed by the assessee. Further, the assessee was also requested to submit the documentary evidences to justify the circle rates taken to calculate

ACIT 16.3, Mumbai vs. Dr. Sangeeta Ganpat Sawant, Mumbai

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

ITA 3743/MUM/2024[2018-19]Status: DisposedITAT Mumbai17 Oct 2024AY 2018-19

Bench: Shri Amarjit Singhshri Sandeep Singh Karhail

For Appellant: Shri Sanjay ParikhFor Respondent: Shri BhangepatilPushkaraj Ramesh, Sr.DR

Section 143Section 143(2)Section 143(3)Section 250Section 69

regard to CIDCO and EXTENSION as the assessee filed necessary details. However, the learned CIT(A) upheld the addition on account of the cost of improvement under the name CISCO, as the assessee could not submit any evidence. Being aggrieved by the deletion of addition by the learned

Sadhwani Wood Product Private Limited, Kota vs. Principal Commissioner of Income Tax Central Jaipur, Jaipur

In the result, both the appeal of the assessee are allowed

ITA 922/JPR/2024[2018-2019]Status: DisposedITAT Jaipur16 Oct 2024AY 2018-2019

For Appellant: Sh. Sidharth Ranka, Adv. &For Respondent: Sh. Arvind Kumar, CIT

Section 115BSection 143(3)Section 253(5)Section 263Section 5Section 69A

without application of mind." Further in the case of Commissioner of Income Tax V/s Paville Projects (P)Ltd, the A.O had allowed the cost of Improvement to the assessee which was not as per law, the Honourable Apex Court upheld the action of the Commissioner of Income

Sadhwani Wood Product Private Ltd, Kota vs. Principal Commissioner of Income Tax, (Central) Jaipur, Jaipur

In the result, both the appeal of the assessee are allowed

ITA 398/JPR/2024[2019-2020]Status: DisposedITAT Jaipur16 Oct 2024AY 2019-2020

For Appellant: Sh. Sidharth Ranka, Adv. &For Respondent: Sh. Arvind Kumar, CIT

Section 115BSection 143(3)Section 253(5)Section 263Section 5Section 69A

Arjun Das Jasuja, Jabalpur vs. The CIT (It & Tp), Ahmedabad

In the result, appeal filed by the assessee is allowed

ITA 796/AHD/2024[2019-20]Status: DisposedITAT Ahmedabad15 Oct 2024AY 2019-20

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No.796/Ahd/2024 िनधा"रण वष" /Assessment Year : 2019-20 Arjun Das Jasuja The Cit (It & Tp) बनाम/ 16, Nayagaon, Rampur Circle-2 V/S. Jebalpur Ahmedabad Madhya Pradesh – 462 008 "थायी लेखा सं./Pan: Aehpj 3059 D अपीलाथ&/ (Appellant) '( यथ&/ (Respondent) Assessee By : Shri Sapan Usrethe, Ar Revenue By : Shri V. Nand Kumar, Cit-Dr सुनवाई की तारीख/Date Of Hearing : 03/10/2024 घोषणा की तारीख /Date Of Pronouncement: 15/10/2024 आदेश/O R D E R Per Makarand V. Mahadeokar, Am:

For Appellant: Shri Sapan Usrethe, ARFor Respondent: Shri V. Nand Kumar, CIT-DR

Section 143(3)Section 263Section 55(1)(b)

immovable property located at 16, Nayagaon, Rampur, Jabalpur, which was sold on 11.04.2018 for Rs.2,51,00,000/-. The assessee claimed a cost of improvement of Rs.68,90,000/- in the computation of capital gains, including expenses for interior work, kitchen appliances, plywood laminating flooring, and tiles. After indexing ... after obtaining all relevant details like the purchase deed, sale deed, computation of capital gains, bank statement, and valuation report, accepted the cost of improvement and assessed the income as returned. 2.2. Subsequently, the learned CIT, upon perusal of the records, found that the AO had allowed the assessee

Yalavarthy Padma Priya, Vijayawada vs. Income Tax Officer, Ward-2(3), Vijayawada

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

ITA 350/VIZ/2024[2018-19]Status: DisposedITAT Visakhapatnam15 Oct 2024AY 2018-19

Bench: Shri Duvvuru Rl Reddy, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकर अपील सं./I.T.A. No. 350/Viz/2024 (निर्धारण वर्ा/ Assessment Year: 2018-19) Yellavarthy Padma Priya V. Income Tax Officer – Ward – 2(3) Income Tax Office D.No. 48-6-6/5, Flat No. 401 C.R. Building, M.G. Road Sri Sai Plaza, Basavapunnaiah Street Vijayawada Gunadala Vijayawada – 520005 Andhra Pradesh [Pan: Adapy6673L] (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

Section 142(1)Section 143(2)Section 147Section 148Section 148A

offered long term capital gain of Rs. 1,34,637/- after claiming indexed cost of acquisition of Rs.2,17,471/- and indexed cost of improvement for Rs.1,36,91,892/- and assessee also accounted for the expenditure incurred in connection with the transfer of the property for Rs.2 ... Assessee has not filed any documentary evidences in support of cost of acquisition, cost of improvement and transfer expenditure as claimed in the return of income. The Assessing Officer considering the reply of the assessee, accepted the indexed cost of acquisition of land of Rs.2,17,471/-. Further, since

Varun Manjunatha, Bangalore vs. Income Tax Officer, Ward-5(3)(3), Bangalore

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

ITA 1278/BANG/2024[2015-16]Status: DisposedITAT Bangalore15 Oct 2024AY 2015-16

Bench: Shri Waseem Ahmed & Shri Soundararajan K.Assessment Year : 2015-16

For Appellant: Shri Joseph Varghese, AdvocateFor Respondent: Shri Subramanian .S, JCIT (DR)

Section 142(1)Section 143(2)Section 144Section 147Section 148Section 148ASection 151Section 234ASection 250

upholding and confirming the additions made by the Ld. AO in the assessment order without taking into consideration the indexed cost of acquisition, cost of improvement, expenses on transfer of the property on the facts and circumstances of the case. 7. The findings

Pankaj Dhandharia, Mumbai vs. ACIT-22(1), Mumbai

Appeal is dismissed

ITA 741/MUM/2024[2017-18]Status: DisposedITAT Mumbai15 Oct 2024AY 2017-18

Bench: Shri Prashant Maharishi, Am & Shrisunil Kumar Singh, Jm

Section 142ASection 144BSection 147Section 148Section 250Section 50(2)(vi)Section 500Section 56(2)(vii)

Pankaj Dhandharia Versus ACIT-22(1), Mumbai without prejudice to the above, erred in not appreciating that if the cost of improvement is added to the cost of the impugned property or is reduced from the stamp duty value within the +/-10% as per section

Mrs. Pratibha Ashokkumar Godha, Nadiad vs. The ITO, Ward-1 (Previously Ward-5), Nadiad

The appeal of the assessee is allowed

ITA 1273/AHD/2024[2013-14]Status: DisposedITAT Ahmedabad09 Oct 2024AY 2013-14

Bench: Dr. Brr Kumarasstt.Year : 2013-14 Mrs.Pratibha Ashokumar Godha The Ito, Ward-1 10, Prena Park, Vs (Previously Ward-5) Nr.Kashimir Park Society Nadiad. Nana Kumbhnath Road Nadiad. Pan : Afepg 0254 M (Applicant) (Responent) : Assessee By Shri Pratibha Parmar Revenue By : Shri Ravindra, Sr.Dr सुनवाई क" तारीख/Date Of Hearing : 09/10/2024 घोषणा क" तारीख /Date Of Pronouncement: 09/10/2024 आदेश/O R D E R आदेश आदेश आदेश

For Respondent: Shri Ravindra, SR.DR

Section 250Section 271Section 274Section 54

exemption u/s 54, whereas improvements in the nature of movable furniture are not eligible for exemption u/s 54. 6. It is submitted that cost of improvement incurred even after purchasing a new house is eligible for exemption u/s 54 against capital gains since cost of purchase includes any capital expenditure

Kumar Madhavanpillai.S, Thiruvananthapuram vs. ITO, Ward-1(4), Trivandrum

In the result, the appeal of the assessee is hereby allowed

ITA 461/COCH/2024[2017-2018]Status: DisposedITAT Cochin03 Oct 2024AY 2017-2018

Bench: Shri Waseem Ahmed & Shri Soundararajan K.Kumar Madhavanpillai S. Income Tax Officer -1(4) Chandra Press & Book Depot Aayakar Bhavan, Kowdiar P.O. Manjalikulam Road Thiruvananthapuram 695003 Vs. Thampanoor Thiruvananthapuram 695001 [Pan: Ajxps9299P] (Appellant) (Respondent)

For Appellant: Shri Anil Krishnan, AdvocateFor Respondent: Smt. Girly Albert, Sr. D.R

Section 50Section 54

under the head capital gain by disallowing exemption under section 54/54F of the Act and without giving the benefit of the cost of improvement. 3. The facts in brief are that the assessee is an individual who during the year under consideration sold immovable property being land &building vide deed ... incurred construction expenses in the year 2003-04 for Rs. 12.5 lakh on the construction of shop etc. which was claimed as the cost of improvement. Thus, the assessee after claiming indexed cost of acquisition and indexed cost of improvement and deduction u/s 54/54F of the Act on account

Assisstant Commissioner of Income Tax, 20(1), Mumbai vs. Almac Enterprises, Mumbai

In the result the appeal filed by the revenue stands partly allowed for statistical purposes

ITA 4162/MUM/2024[2020-21]Status: DisposedITAT Mumbai03 Oct 2024AY 2020-21

Bench: Smt. Beena Pillai, Jm & Shri Omkareshwar Chidara, Am

For Appellant: Shri Anant N. PaiFor Respondent: Shri Ram Krishn Kedia

Section 143(2)Section 46A

appreciated the facts of the case that the AO asked for documentary evidences regarding cost of improvement for property but the assessee not submitted any evidences. 2 ALMAC Enterprises; A. Y.2020-21 2. Whether on the facts and in circumstances of the case ... appreciated the facts that the assessee has not submitted any documentary evidences regarding cost of improvement of plot no.1 on the addition made on account of long term capital gain of Rs.2,96,72,585/-. 3. Whether on the facts and in circumstances of the case

Sundaramurthy Sathyakumar, Chennai vs. ITO Corp Ward 6(3), Chennai

In the result the appeal of the assessee is partly allowed

ITA 1011/CHNY/2024[2015-16]Status: DisposedITAT Chennai01 Oct 2024AY 2015-16

Bench: Shri S.S. Viswanethra Ravi, Hon’Ble & Shri S. R. Raghunatha, Hon’Bleआयकरअपीलसं./Ita No.: 1011/Chny/2024 िनधा"रणवष" / Assessment Year: 2015-16 Sundaramurthy Sathyakumar, Income Tax Officer, V-31, 13Th Street, Anna Nagar, V. Corporate Ward -6(3), Chennai - 600 040. Chennai. [Pan: Aasps-1930-K] (अपीलाथ"/Appellant) (""यथ"/Respondent) : Shri. K. Meenakshi Sundaram, Itp अपीलाथ" क" ओरसे/Appellant By ""यथ" क" ओरसे/Respondent By : Shri. Aroon Prasad, Addl. Cit सुनवाई की तारीख/Date Of Hearing : 25.07.2024 घोषणा की तारीख/Date Of Pronouncement : 01.10.2024

For Respondent: Shri. Aroon Prasad, Addl. CIT

Section 68

Tribunal had held in many cases of sales of rubber gardens, tea estates and coffee estates where the cost of acquisition and the cost of improvement could not be ascertained with accuracy the capital gains were estimated by the Chennai Tribunal at 30% of the sales price as long term ... decision deserves to be followed in this case also as the assessee as well as the department are equally unaware of the true cost of improvement. 11.The assessee craves leave to file additional grounds and or additional evidences as the gearing progresses in case a need arises for the same

Nirmala Devi Madhusoodhanan Nair Madhavikutty, Trivandrum vs. The ITO Ward 1(3), Trivandrum

In the result, the appeal of the assessee is allowed for statistical purposes and the stay application is dismissed as infructuous

ITA 404/COCH/2023[2011-12]Status: DisposedITAT Cochin27 Sept 2024AY 2011-12

Bench: Shri Waseem Ahmed & Shri Soundararajan K.

For Appellant: Shri Pathmanathan K.V., AdvocateFor Respondent: Smt. Girly Albert, Sr. D.R

order of the Assessing Officer (AO). 3. At the time of hearing the learned A.R. before us submitted that the assessee has incurred cost on improvement of the impugned property which has not been 2 Nirmala Devi Madhusoodhanan Nair allowed by the Revenue authorities. The learned A.R. further fairly admitted ... both the parties and perused the material available on record. Considering the fact that the assessee could not substantiate the claim for the cost of improvement during the appellate proceedings and further the assurance made by the learned A.R. of the assessee to make necessary compliance, we, in the interest

Rajen Rajmalbhai Mehta, Surat vs. ACIT, Mumbai

In the result, appeal of the assessee is allowed

ITA 1760/MUM/2024[2011-12]Status: DisposedITAT Mumbai27 Sept 2024AY 2011-12

Bench: Shri Satbeer Singh Godara & Shri Girish Agrawalassessment Year: 2011-12 Rajen Rajmalbhai Mehta, Assistant Commissioner Of 501, Swagat Complex, Income Tax, Vs. Near Mehta Park, Nanpura, Mumbai Surat, Gujarat – 395001 (Pan : Aabpm4155D) (Appellant) (Respondent) Present For: Assessee : None Revenue : Smt. Mahita Nair, Sr. Dr

For Appellant: NoneFor Respondent: Smt. Mahita Nair, Sr. DR

Section 143(3)

assessee for its adjudication. 5. The short point involved in the present appeal is in respect of disallowance made towards claim of cost of improvement of Rs.4,90,000/- incurred in 1983-84 while computing long term capital gain on the transfer of jointly owned house property by the assessee ... owner as per Balance sheet is Rs.300000/- The assessee has worked the indexed cost as 150000 X (711/116). $ The assessee has taken indexed cost of improvement as 245000 x (711/140) 7. The only issue before us is in respect of claim of Rs.4,90,000/- towards cost of improvement