“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

Dr. Arvind Taneja, New Delhi vs. ACIT Circle-61(1), New Delhi

In the result, the appeal of the assessee is allowed

ITA 9171/DEL/2019[2011-12]Status: DisposedITAT Delhi11 Mar 2024AY 2011-12

Bench: Shri M. Balaganesh & Shri Anubhav Sharmadr. Arvind Taneja, Vs. Acit, 75, Golf Links, Delhi Circle-61(1), New Delhi (Appellant) (Respondent) Pan:Aacpt0269N

For Appellant: Shri Bhupinder Jit Kumar, AdvFor Respondent: Shri Kanv Bali, Sr. DR

Section 143(2)Section 143(3)Section 147Section 148Section 151

unwarranted, unlawful, additions of Rs 23,04,167/- to the Long Term capital gains, the additions being part of the bonafide claim of cost of improvement incurred by the assessee in the past the land and building Dr. Arvind Taneja transferred during the relevant previous year in complete

Yogesh Gandhi, New Delhi vs. ACIT, Circle 1(3)(1), International Taxation, New Delhi

In the result, the appeal of the assessee is allowed

ITA 768/DEL/2023[2019-20]Status: DisposedITAT Delhi07 Mar 2024AY 2019-20

Bench: Shri Saktijit Dey- & Shri Pradip Kumar Kedia-

For Appellant: Shri Rishabh Ostwal, AdvocateFor Respondent: Shri Vizay B. Vasanta, CIT-DR

Section 143(3)Section 144C(13)

property. The AO denied the claim in the light of the DRP directions that stamp duty paid on gift deed does not constitute cost of improvement of I.T.A. No.768/Del/2023 3 property. 4. On perusal of records and in the light of factual matrix placed before us on behalf

Hari Narayan Meena, Jaipur vs. Income-Tax Officer Ward 2(5), Jaipur

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

ITA 56/JPR/2024[2016-17]Status: DisposedITAT Jaipur05 Mar 2024AY 2016-17

Bench: Commissioner Of Income-Tax (Appeals) Which Was Being Handled By The Earlier Authorized Representative & The Information & Details Of The Case Had Been Provided To The Assessee Recently Only.

For Appellant: Shri Ashish Sharma (Adv.)

Section 143(3)

appeal of the assessee by giving following findings on the issue:- “The allowable expenses for computation of STCG are Cost of acquisition, cost of improvement, registration expenses, stamp duty. The provisions of the Act which deals with these are given below - [Mode of computation. 48. The income chargeable under

Sachin Dhamija, Delhi vs. ITO, Ward 36(3), New Delhi

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

ITA 2932/DEL/2023[2017-18]Status: DisposedITAT Delhi05 Mar 2024AY 2017-18

Bench: Shri Shamim Yahyasachin Dhamija, Vs. Ito, Ward 36 (3), C-361, Majlis Park, Gali No.9, New Delhi. Delhi – 110 033. (Pan : Ajipd2855R) (Appellant) (Respondent) Assessee By : Shri Saurabh Rohtagi, Ca Shri Ashok Sharma, Advocate Revenue By : Shri Om Prakash, Sr. Dr Date Of Hearing : 28.02.2024 Date Of Order : 04.03.2024

For Appellant: Shri Saurabh Rohtagi, CAFor Respondent: Shri Om Prakash, Sr. DR

Section 250Section 50CSection 50C(2)

That on the facts and circumstances of the case, the Ld. CIT (A) was not justified in confirming the disallowance of indexed cost of improvement aggregating Rs.4,00,708/- even though the disallowance was without any valid justification or basis.” 3. At the outset, in this case, ld. Counsel

Bharat Bhushan, Ghaziabad vs. ITO, Ward- 1(5), Ghaziabad

The appeal of the assessee is dismissed

ITA 4102/DEL/2018[2009-10]Status: DisposedITAT Delhi05 Mar 2024AY 2009-10

Bench: Shri M. Balaganesh & Shri Anubhav Sharmaassessment Year: 2009-10

Section 147Section 148Section 48Section 69

order of learned authorities below show that the expenditure denied is of the nature of soil filling and boundary wall as cost of improvement of the property purchased as back as on 25.05.2006. The burden was on the assessee to establish the same and except for filing bills of same

Sushila Bhardwaj, Jaipur vs. ITO 1(4), Jaipur

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

ITA 604/JPR/2023[2016-17]Status: DisposedITAT Jaipur01 Mar 2024AY 2016-17

Bench: Hearing.”

For Appellant: Sh. Mukesh Khandelwal (CA)For Respondent: Sh. Anoop Singh (Addl. CIT)

Section 143(3)Section 54

property was 32 years old. Further, it is an undisputed fact that the property in question was a constructed property, hence cost of improvement needs to be allowed to the assessee. Since the property is very old, the appellant is not expected to have kept the bills/vouchers pertaining to construction ... property. However, the appellant should have made due diligence to calculate the cost of improvement through a registered valuer. The appellant failed to provide any basis for taking the cost of improvement at Rs. 321/- per sq Ft. as in 1982 and 1983. The AO on the other hand

Sandhya Garg, Jabalpur vs. The ITO, W-2(4), Bhopal

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

ITA 178/IND/2022[2011-12]Status: DisposedITAT Indore29 Feb 2024AY 2011-12

Bench: Shri Vijay Pal Rao & Shri B.M. Biyanisandhya Garg Ito War,2(4) 30, Subhash Grih Nirman Bhopal Society, Priydarshini Colony Vs. Jabalpur (Appellant / Assessee) (Respondent/ Revenue) Pan: Agtpg7994G Assessee By Shri Manoj Kumar Jain, Ar Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 29.02.2024 Date Of Pronouncement 29.02.2024

Section 54FSection 69

NFAC erred in confirming addition of Rs.387607/- as long term capital gain ITANo.178/Ind/2022 Sandhya Garg ignoring the actual cost of acquisition and cost of improvement incurred by the assesse on impugned shop. 3. Considering the fact that Furniture sold for Rs.400000/-was personal assets of the assesse comprising Sofa

ITO, Ward-35(7), New Delhi vs. Sumitra Devi, Delhi

In the result, the appeal of the Revenue stands dismissed and the Cross Objection of the assessee is partly allowed

ITA 906/DEL/2020[2010-11]Status: DisposedITAT Delhi28 Feb 2024AY 2010-11

Bench: Dr. Brr Kumar & Ms. Astha Chandraasstt. Year: 2010-11 & Co. No. 173/Del/2022 Asstt. Year 2010-11 Ito, Ward-35(7), Vs. Smt. Sumitra Devi, New Delhi. Plot No. 132/133, First Floor, Pocket-12, Sector-24, Rohini, Delhi-110 085. Pan Craps6145R (Appellant) (Respondent)

For Appellant: Shri Sachin Kumar, AdvocateFor Respondent: Shri Piyush Tripathi, Sr. DR

Section 147Section 148Section 151Section 45(1)Section 45(5)(b)

provisions of section 45(5)(b) and accordingly treated the entire amount as capital gains after treating the cost of acquisition and cost of improvement as NIL (Explanation (i) to section 45(5)(b)). The appellant has also raised an argument that even if the AO's contention

Krishnamurthy Thagarajan, Bangalore vs. ACIT RG 6(3), Mumbai

In the result, appeal of the assessee is allowed

ITA 1651/MUM/2013[2008-09]Status: DisposedITAT Mumbai20 Feb 2024AY 2008-09

Bench: Shri Vikas Awasthy& Shri Amarjit Singhआअसं.1651/मुं/2013 (िन.व. 2008-09) Krishnamurthy Thiagarajan, No.41, 36Th Main Dollar Scheme, Btm Layout, 1St Stage, Bangalore – 560 068. Pan: Aadpk-5126-C ...... अपीलाथ"/Appellant बनाम Vs. The Acit, Circle 6(3),Mumbai, Room No.522 (5Th Floor), Aaykar Bhavan, M.K.Road, Mumbai – 400 020. ..... "ितवादी/Respondent Assessee By : Shri Miteshkumar Gupta, Ca With Shri V.Shivkumar, Ca Revenue By : Shri P.D.Chougule, Sr.Dr सुनवाई क" ितिथ/ Date Of Hearing : 20/02/2024 घोषणा क" ितिथ/ Date Of Pronouncement : 20/02/2024 आदेश/Order Per Vikas Awasthy, Jm: This Appeal By The Assessee Is Directed Against The Order Of Commissioner Of Income Tax(Appeals)-12, Mumbai [In Short ‘The Cit(A)’] Dated 08/11/2012, For The Assessment Year 2008-09. 2. In Appeal Assessee Has Assailed Additions/Disallowances On Account Of: (I) Management Fee Paid To M/S. Bnp Paribas Investment Services India Pvt. Ltd. – Rs.1,71,028/-

For Appellant: Shri Miteshkumar Gupta, CA with Shri V.Shivkumar, CAFor Respondent: Shri P.D.Chougule, SR.DR

Section 14ASection 48

allows deduction in respect of expenditure incurred wholly and exclusively in connection with transfer of capital asset and the cost of acquisition and cost of improvement, if any. The contention of the assessee is that the management fee paid by the assessee to BNP Paribhas is linked to earning

DCIT - CC- 3, Thane vs. Ajiv Yashwant Patil, Mumbai

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

ITA 610/MUM/2022[2008-09]Status: DisposedITAT Mumbai15 Feb 2024AY 2008-09

Bench: Ms. Kavitha Rajagopal, Jm & Shri Gagan Goyal, Am Ajiv Yashwant Patil Acit, Central Circle-3 103, Parijat Apartments, Gaothan, Thane Vs. Virar (W), Thane-401 303

For Appellant: Shri Subodh RatnaparkhiFor Respondent: 22.11.2023

Section 132Section 143(2)Section 143(3)Section 147Section 148Section 250

grounds of reopening and the addition of Rs.2,73,50,000/- being the unexplained investment and disallowance of Rs.37,62,530/- towards cost of improvement. 3. The Revenue, on the other hand, has challenged the deletion of addition of Rs.30,70,00,000/- and restricting the disallowance on cost ... raised by the Revenue are hereby dismissed. 25. Ground no. 4 pertains to the addition of Rs.37,62,530/- towards cost of improvement being expenditure claimed by the assessee in working of LTCG arising on 14 ITA Nos. 549 & 610/Mum/2022 (A.Y.2008-09) Ajiv Yashwant Patil sale of the land at Virar

Ajiv Yashwnat Patil, Thane vs. ACIT, Central Circle-3, Thane

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

ITA 549/MUM/2022[2008-09]Status: DisposedITAT Mumbai15 Feb 2024AY 2008-09

Bench: Ms. Kavitha Rajagopal, Jm & Shri Gagan Goyal, Am Ajiv Yashwant Patil Acit, Central Circle-3 103, Parijat Apartments, Gaothan, Thane Vs. Virar (W), Thane-401 303

For Appellant: Shri Subodh RatnaparkhiFor Respondent: 22.11.2023

Section 132Section 143(2)Section 143(3)Section 147Section 148Section 250

Rajesh Saluja, Mumbai vs. DCIT Circle-70(1), New Delhi

In the result, the Appeal filed by the assessee is dismissed

ITA 5190/DEL/2019[2013-14]Status: DisposedITAT Delhi15 Feb 2024AY 2013-14

Bench: Shri N.K.Billaiya & Shri Yogesh Kumar U.S.

Section 142(1)Section 143(3)Section 234ASection 24

material on record. 3. That the Assessing officer has erred in disallowing the interest paid on housing loan as cost of acquisition and cost of improvement. 4. That the Assessing officer has erred in disallowing the amount of Rs. 94,17,082/-which is interest paid on housing loan ... sale consideration receipt 7,15,20,453/- Less: indexed acquisition cost (2,4!,34,901/551*852) 3,73,19,302/- Indexed cost of improvement (2,08,44,290/551 *852) 2,62,66,923 6,35,86,228/- LTCG 79,34,225/- Less: exemption claimed u/s 54 Taxable LTCG arising from

Shrenik Hiralal Shah, Vadodara, Gujarat vs. Assistant Commissioner of Income Tax, Circle 1(1)(1), Vadodara, Gujarat

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

ITA 1130/AHD/2023[2010-11]Status: DisposedITAT Ahmedabad14 Feb 2024AY 2010-11

Bench: Ms. Suchitra Kamble & Shri Waseem Ahmedassessment Year : 2010-11 Shri Shrenik Hiralal Shah The Asstt.Cit 5/A Vrundavan Bungalows Vs Circle-1(1)91) Near Mathura Nagari, Tandalja Vadodara Vadodara -390 020 Gujarat, India Pan: Apnps 0058 Q अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Ms.Amrion Pathan, Ar Revenue By : Shri B.P. Makwana, Sr.Dr सुनवाई क" तार"ख/Date Of Hearing : 07/02/2024 घोषणा क" तार"ख /Date Of Pronouncement: 14/02/2024 आदेश/O R D E R Per Ms. Suchitra Kamblethis Appeal Is Filed By The Assessee Against The Order Dated 31/10/2023 Passed By The Commissioner Of Income-Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [“Cit(A)” In Short] For Assessment Year 2010-11. 2. Grounds Of Appeal Are As Under:

For Appellant: Ms.Amrion Pathan, ARFor Respondent: Shri B.P. Makwana, Sr.DR

Section 147Section 148Section 24Section 271(1)(c)Section 50CSection 50C(1)Section 50C(2)

learned CIT(A) has erred in facts and in law in confirming the action of the learned AO in not allowing deduction of cost of improvement. 10) The learned CIT(A) has erred in facts and in law in confirming the action of the learned AO in not allowing deduction

Arjun Reddy Marri, Hyderabad vs. ITO., Ward-11(2), Hyderabad

In the result, appeal of the assessee is allowed

ITA 653/HYD/2023[2012-13]Status: DisposedITAT Hyderabad13 Feb 2024AY 2012-13

Bench: Shri K. Narasimha Chary

For Appellant: Shri A. Srinivas, ARFor Respondent: Shri M. Naveen Kumar, DR

Section 148

Assessing Officer issued notice under section 148 of the Income Tax Act, 1961 (‘the Act’) and also called for the information about the cost of improvement incurred between 1992 and 1994, and also obtained schedule rate of cost of construction from the Commissioner & Inspector General, Registration and Stamp Office ... such a report is very detailed and done by a qualified person. Page 2 of 6 Learned CIT(A) accordingly accepted the indexed cost of improvement at Rs. 79,61,426/- and determined the capital gains at Rs. 53,85,129/-. 5. Grievance of the assessee before us is that

Bhagirath Yadav, Jaipur vs. Income Tax Officer, Jaipur

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

ITA 742/JPR/2023[2012-13]Status: DisposedITAT Jaipur13 Feb 2024AY 2012-13

Bench: This Office That The Appellant Has Stated That The Appellant Has Invested Of Rs. 29,32,775/- In Accordance The Provision Of Section 54B Of Income Tax Act, 1961 To Purchases Agricultural Land Out Of Sale Consideration Of Rs.37,64,082/-

For Appellant: Sh. Yogesh Kumar Sharma (Adv.)For Respondent: Sh. Monisha Choudhary (Addl.CIT)

Section 10(37)Section 139(1)Section 144Section 2(14)Section 54Section 54BSection 54DSection 54ESection 54FSection 54G

Should be allowed. A copy of the Bill of Advocate fees is also attached herewith as Annexure-5. 10. That indexed cost of improvement of Rs 343722/- where in respect of the above sold agricultural land, we had incurred some expenses of improvement like sand filling, tarbandi, muddi on that ... specified agricultural land.The copies of the proof of such cost of improvement is attached herewith as Annexure-6. 4 Bhagirath Yadav vs. ITO 11. Reason for such Cost of Improvement and its sources a. Sand filling – The agricultural property was in deep and to achieve the object of farming

Shri Amit Nagesh Shinde, Mumbai vs. Income Tax Office-Ward-26(1)(1), Mumbai

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

ITA 2959/MUM/2023[2012-13]Status: DisposedITAT Mumbai08 Feb 2024AY 2012-13

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal () Assessment Year: 2012-13

For Appellant: Mr. Shashank MehtaFor Respondent: Mr. Surendra Kumar Meena, Sr. DR

Section 143Section 143(3)Section 69A

above. 4. In ground No. 1, the assessee is aggrieved In ground No. 1, the assessee is aggrieved with with the deduction for cost of improvement of the f improvement of the flats and interest and brokerage lats and interest and brokerage, which has not been considered while computing ... adjudicated the said claim of the assessee for Ld. CIT(A) has not adjudicated the said claim of the assessee for considering the cost of improvement. considering the cost of improvement. 4.1 We have heard rival submission of the parties on the issue in We have heard rival submission

Modi Rubber Ltd., New Delhi vs. ACIT, Circle- 17(1), New Delhi

In the result, Ground no.2 is partly allowed

ITA 6866/DEL/2018[2012-13]Status: DisposedITAT Delhi08 Feb 2024AY 2012-13

Bench: Shri Saktijit Dey- & Shri Pradip Kumar Kedia-

For Appellant: Shri Rohit Jain, AdvFor Respondent: Ms. Smita Singh, Sr.DR

Section 10(34)Section 139(1)Section 143(3)Section 14A

Commissioner rejected the revision petition on the ground that, from the sale price as specified in the agreement, only cost of acquisition, cost of improvement or expenditure incurred exclusively in connection with the transfer could be reduced in computing the capital I.T.A. No.6866/Del/2018 15 gains, and that the agreement between

Siel Ltd vs. ACIT, Circle-8(1)

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

ITA 2659/DEL/2004[1997-1998]Status: DisposedITAT Delhi31 Jan 2024AY 1997-1998

Bench: Shri Saktijit Dey & Shri N.K. Billaiya

For Appellant: Shri Tarandeep Singh, AdvFor Respondent: Shri Subhra Jyoti Chakraborty, CIT-DR

Section 115J

Ferguson & Co. on a going concern basis. As per the valuation report, the fair market value as on 01.04.1981 was 79.05 lakhs and cost of improvement from 01.04.1981 till the date of transfer i.e. 31.03.1996 was valued at Rs. 903.51 lakhs. Compressor business was transferred to subsidiary at book value ... long term capital loss on transfer of compressor business was worked out to Rs. 403.24 lakhs. 41. The dispute is in respect of cost of improvement taken at Rs. 903.51 lakhs. The Assessing Officer was of the opinion that the cost of improvement cannot be more than the total assets

Shree Yamuna Industries, Ahmedabad vs. The ITO, Ward-3(2)(5), Ahmedabad

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

ITA 154/AHD/2019[2012-13]Status: DisposedITAT Ahmedabad24 Jan 2024AY 2012-13

Bench: Shri Ramit Kochar & Ms. Suchitra Kambleassessment Year: 2012-13

Section 143(1)Section 147Section 50C

short term capital gains by adopting the Stamp Duty Valuation under Section 50C of the Act and also by disallowing the claim of cost of improvement while computing the capital gains. 2. In the alternate, and without prejudice, the learned Commissioner of Income Tax (Appeals) ought to have referred ... Assessment Order and in the order of the CIT(A) in respect of assessee’s grievance. 6. The Ld. DR submitted that the cost of improvement was disallowed by the Assessing Officer by giving reasonable justification, as the assessee has not proved the Actual cost of improvement in respect

DCIT, Central Circle Ajmer vs. Vijay Granimarmo Private Limited, Naya Ghar Gulab Bari Ajmer

In the result of the cross objection of the assessee in CO No

ITA 648/JPR/2023[2020-21]Status: DisposedITAT Jaipur17 Jan 2024AY 2020-21

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. C. M. Agarwal (CA)For Respondent: Sh. Alka Gautam (CIT) (V.H)

Section 143(3)

valued the property on the fair market value as on 14.02.2020. Therefore, the reverse calculation method has been adopted by applying the indexed cost of improvement for the F.Y 2018-19 to 2019-20. Based on these facts and after allowing the self- supervision charges @ 7.5 % the ld. AO calculated