“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

The ITO, Ward-3(2)(3), Surat vs. Shri Rameshbhai Vallabhbhai Gajera, Surat

ITA 1522/AHD/2017[2012-13]Status: DisposedITAT Surat24 Jan 2023AY 2012-13

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकर अपील सं./Ita No.1522/Ahd/2017 Assessment Year: (2012-13) (Physical Court Hearing) The Ito, Ward-3(2)(3), Vs. Rameshbhai Vallabhbhai Gajera, Surat. 153, Vaikunthdham Society, Laxmikant Ashram Road, Katargam, Surat. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Abapg3846B (Appellant)/(Revenue) (Respondent)/(Assessee) Assessee By Shri Rasesh Shah, Ca Respondent By Shri Ashok B. Koli, Cit(Dr) Date Of Hearing 05/01/2023 Date Of Pronouncement 24/01/2023

Section 142(1)Section 143(2)Section 143(3)Section 54B

Rs.17,88,327/-. During the verification of the return of income, it is noticed that the assessee has claimed the expenses / deduction i.e. cost of improvement of Rs.25,64,479/- and expenditure on transfer of Rs.8,52,320/-. The details of the above said expenses had been ITA No.1522/SRT/2017/AY.2012-13 Rameshbhai

Santosh Kumar Suri, Delhi vs. ACIT, Circle-40(1), New Delhi

In the result, the appeal of the Revenue is allowed for statistical purposes and the appeal of the assessee is partly allowed as indicated above

ITA 816/DEL/2020[2016-17]Status: DisposedITAT Delhi20 Jan 2023AY 2016-17

Bench: Shri Shamim Yahya & Shri Challa Nagendra Prasad

For Appellant: Shri Nagesh Behl, C. AFor Respondent: Shri Abhishek Kumar

Section 133(6)

giving opportunity of being heard to the AO. 2. Whether the CIT (Appeals) is correct in allowing the claim of the assessee of cost of improvement without any documentary evidence but only based on the letter submitted by third party.” 3. In so far as ground No. 1 is concerned ... were admitted without giving an opportunity to he Assessing Officer to go through the additional evidence furnished by the assessee in respect of cost of improvement made by the assessee. The additional evidence contains copies of cost of improvement year-wise. Cross ITA. Nos.816 & 721/Del/2020 4. On the other hand

ACIT, Circle-43(1), New Delhi vs. Santosh Suri, Delhi

In the result, the appeal of the Revenue is allowed for statistical purposes and the appeal of the assessee is partly allowed as indicated above

ITA 721/DEL/2020[2016-17]Status: DisposedITAT Delhi20 Jan 2023AY 2016-17

Bench: Shri Shamim Yahya & Shri Challa Nagendra Prasad

For Appellant: Shri Nagesh Behl, C. AFor Respondent: Shri Abhishek Kumar

Section 133(6)

Pramod Kasliwal, Jaipur vs. ITO WD. 6(2), Bhagwan Dass Road, Jaipur

Appeals of the assessee are allowed statistically

ITA 388/JPR/2022[2017-18]Status: HeardITAT Jaipur02 Jan 2023AY 2017-18

Bench: Ld. Cit/Nfac.

For Appellant: Sh. Pramod Patni (CA)For Respondent: Sh. A. S. Nehra (Addl.CIT) a

Section 143(3)Section 154Section 2Section 49(1)Section 54

assessee by any of the modes specified under Section 49(1) of the Act (viz. under a Gift or Will), not only the cost of improvement incurred by the assessee but also the cost of improvement incurred by the previous owner shall be deducted from the total Pramod Kasliwal, Jaipur ... Jaipur consideration received by the assessee while computing the capital gains under Section 48 of the Act. The question of deducting the cost of improvement incurred by the previous owner in the case of an assessee covered under Section 49(1) of the Act would arise only if the period

Pramod Kasliwal, Jaipur vs. ITO WD. 6(2), New Central Revenue Building, Bhagwan Dass Road, Jaipur 302005

Appeals of the assessee are allowed statistically

ITA 387/JPR/2022[2017-18]Status: HeardITAT Jaipur02 Jan 2023AY 2017-18

Bench: Ld. Cit/Nfac.

For Appellant: Sh. Pramod Patni (CA)For Respondent: Sh. A. S. Nehra (Addl.CIT) a

Section 143(3)Section 154Section 2Section 49(1)Section 54

DCIT, New Delhi vs. M/S. Golden Falcon Pacific Ltd., Navi Mumbai

In the result, appeals filed by the revenue is dismissed and appeal filed by the assessee is allowed

ITA 3895/DEL/2015[2011-12]Status: DisposedITAT Mumbai28 Dec 2022AY 2011-12

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Rahul Chaudhary, Hon'Bledcit –Circle – 10(1) V. M/S. Golden Falcon Pacific Ltd New Delhi Off. 101, Real Tech Park Sector-30, Vashi, Near Railway Station Navi Mumbai - 400705 Pan: Aadcg8569L (Appellant) (Respondent) M/S. Golden Falcon Pacific Ltd V. Dcit –Circle – 12(1) Now 10(1) C/O. M/S. Saraf & Chandra (C.A) Room No. 416-A Bharat Ins. Bldg, 3Rd Floor, 15-A Central Revenue Building Horniman Circle, Fort, Mumbai – 01 I.P. Estate, New Delhi - 110002 Pan: Aadcg8569L (Appellant) (Respondent)

Section 143(2)

transactions is with the related concern. With regard to other expenditure or other settlement claims by the assessee as part of the cost of improvement claimed by the assessee he objected the above said submissions and submitted that it cannot be part of the cost of acquisition in case

M/S. Golden Falcon Pacific Ltd., Mumbai vs. DCIT, New Delhi

In the result, appeals filed by the revenue is dismissed and appeal filed by the assessee is allowed

ITA 3653/DEL/2015[2011-12]Status: DisposedITAT Mumbai28 Dec 2022AY 2011-12

Section 143(2)

Late Shri K.Kandasamy Rep by L/H Smt. K.Amirtham, Trichy vs. ITO Ward 1(2), Trichy

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

ITA 1522/CHNY/2019[2007-08]Status: DisposedITAT Chennai20 Dec 2022AY 2007-08

Bench: Shri Mahavir Singhand Shri Manoj Kumar Aggarwalआयकर अपील सं./Ita No.: 1522/Chny/2019 िनधा"रण वष"/Assessment Year: 2007-08 Late Shri K. Kandasamy, The Income Tax Officer, Rep. By L/H Smt. K. Amirtham, Vs. Ward – 1(2), No.52, Dindigul Main Road, Trichy. Karumandapam, Trichy – 620 001. Pan : Awgpk 0750R (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri S. Sridhar, Advocate ""यथ" क" ओर से/Respondent By : Shri P. Sajit Kumar, Jcit सुनवाई क" तार"ख/Date Of Hearing : 20.12.2022 घोषणा क" तार"ख/Date Of Pronouncement : 20.12.2022 आदेश /O R D E R Per Mahavir Singh: This Appeal By Assessee Is Arising Out Of The Order Of The Commissioner Of Income Tax (Appeals)-1, Trichy In Ita No.260/2014-15/Cit(A)-1/Try Dated 24.04.2019. The Assessment Was Framed By The Income Tax Officer, Ward-I(2), Tiruchirappalli For The Assessment Year 2007-08, U/S.143(3) R.W.S. 147 Of The Income Tax Act, 1961 (Hereinafter The ‘Act’), Vide Order Dated 26.03.2015. 2. The Only Issue Remains For Adjudication Is As Regards To The Order Of Cit(A) Confirming The Action Of Ao In Computing Long Term Capital Gain On Sale Of Land Situated At Kuniamuthur, Coimbatore Admeasuring 6.75½ Acres For A Consideration Of Rs.45 Lakhs As Per Sale Deed But Addition Confirmed Based On Sworn Statement Of The Assessee Admitting The Sale Consideration At Rs.2,63,99,250/-.

For Appellant: Shri S. Sridhar, AdvocateFor Respondent: Shri P. Sajit Kumar, JCIT

Section 131Section 143(2)Section 143(3)Section 148

dated 26.03.2015, he has not considered the facts in proper perspective by not allowing indexed cost of acquisition, indexed cost of improvement, expenses of transfers, deduction u/s.54EC & 54F of the Act and also not considered the assessment framed in the purchasers namely Shri M. Balasaravanan by the AO, wherein only

Renu Ratnakar Bhattacharya, Mumbai vs. CIT (A), NFAC, Delhi

ITA 2146/MUM/2022[2016-17]Status: DisposedITAT Mumbai15 Dec 2022AY 2016-17

Bench: Shri Kuldip Singhassessment Year: 2016-17

For Appellant: Ms. Meena Mehta, A.RFor Respondent: Shri Krishna Kumar, D.R

Section 143(3)Section 54Section 54E

upholding the disallowance from the cost of acquisition of new house under section 54 for the amount of Rs. 16,34,243/-being Cost of Improvement for construction and structural repairs in order to make the new house property habitable, be added to the cost of purchase of New House ... investment in new house property to the tune of Rs.2,83,50,134/- however, disallowed the cost of brokerage, legal fees and cost of improvement total amounting to Rs.19,91,743/-. 3 Ms. Renu Ratnakar Bhattacharya 3. Assessee carried the matter before the Ld. CIT(A) by way of filing

A.Manoharan, Chennai vs. ITO Non Corporate Ward 17(2), Chennai

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

ITA 3512/CHNY/2018[2015-16]Status: DisposedITAT Chennai07 Dec 2022AY 2015-16

Bench: Shri Mahavir Singhand Shri Manoj Kumar Aggarwal

For Appellant: Shri V. Veeraraghavan, AdvocateFor Respondent: Shri P. Sajit Kumar, JCIT

Section 143(3)

paying differential stamp duty also and claimed the exemption to this extent. The assessee also wants to contest the issue of cost of improvement of Rs.28.07 lakhs. 3. Brief facts are that the assessee received sale consideration of Rs.2.35 crores in regard to sale of his 1/7th share of ancestral ... could not file any documentary evidence or registered documents to that extent. Even the assessee could not file any evidence in regard to cost of improvement of Rs.28.07 lakhs but only provided cheque numbers and the name of persons to whom payment is made. Now, the ld.counsel before us stated

Tyco Fire and Security India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle-7(1)(1), Bangalore

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

ITA 270/BANG/2021[2016-17]Status: DisposedITAT Bangalore28 Nov 2022AY 2016-17

Bench: Shri N. V. Vasudevan & Shri Chandra Poojariit(Tp)A No.270/Bang/2021 Assessment Year : 2016-17 Acit, M/S. Tyco Fire & Security India Private Limited, Vs. D-601, Rmz Centennial, Circle - 7(1)(1), Kundalahalli Main Road, Bengaluru. Bengaluru – 560 048. Pan : Aabct 0087 C Appellant Respondent Assessee By : Shri. Rajan Vora, Ca Revenue By : Shri. Sumer Singh Meena, Cit(Dr)(Itat), Bengaluru Date Of Hearing : 27/11.09.2022 Date Of Pronouncement : 28.11.2022 O R D E R Per N V Vasudevan

For Appellant: Shri. Rajan Vora, CAFor Respondent: Shri. Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 144C(13)Section 92Section 92(1)Section 92B(1)

case of depreciable assets, The book value in case of other assets. Net worth is deemed to be the cost of acquisition and cost of improvement for section 48 and section 49 of the Act. As per section 50B, no indexation benefit is available on cost of acquisition

M/S Mhm Holdings Pvt Ltd, Bangalore vs. The Additional Commissioner of Income Tax Range-12, Bangalore

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

ITA 372/BANG/2018[2010-11]Status: DisposedITAT Bangalore25 Nov 2022AY 2010-11

Bench: Smt. Beena Pillai & Ms. Padmavathy S.M/S. Mhm Holding Pvt. Ltd. Vs Acit, Range - 12 Bengaluru No. 52, Bassappa Road Shantinagar Bengaluru 560027 Pan – Aabcm6614L (Appellant) (Respondent) Assessee By: Shri Parthasarathi, Adv. Revenue By: Shri K.R. Narayana, Addl Cit-Dr Date Of Hearing: 23/11/2022 Date Of Pronouncement: 25/11/2022 O R D E R Per: Padmavathy, A.M.

For Appellant: Shri Parthasarathi, AdvFor Respondent: Shri K.R. Narayana, Addl CIT-DR

Section 143(2)Section 14ASection 40Section 50B

case of depreciable assets, The book value in case of other assets. Net worth is deemed to be the cost of acquisition and cost of improvement for section 48 and section 49 of the Act. There is no scope for any deviation from the aforesaid statutory provisions. Even the provisions ... case of depreciable assets, The book value in case of other assets. Net worth is deemed to be the cost of acquisition and cost of improvement for section 48 and section 49 of the Act. As per section 50B, no indexation benefit is available on cost of acquisition

Sri. Thayappa Balakrishna, Bangalore vs. The Assistant Commissioner of Income Tax, Circle- 8(1), Bangalore

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

ITA 101/BANG/2020[2011-12]Status: DisposedITAT Bangalore22 Nov 2022AY 2011-12

Bench: Shri George George K, Jm & Ms.Padmavathy S, Am

For Appellant: Sri.Ravi Shankar, AdvocateFor Respondent: Sri.K.R.Narayan, Addl.CIT-DR

Section 143(2)Section 234BSection 250

learned Commissioner of Income-tax (Appeals) failed to appreciate that the learned Assessing officer was not justified in law in considering the cost of improvement made to land by way of construction of building and the resulting sale proceeds under the head short term capital gains, rather the learned Assessing ... appellant a sum of Rs.14, 15,840/ - as deduction being labour wages paid to building under construction as part of the cost of improvement of capital assets on the facts and circumstances of the case. 9. The appellant denies himself liable to pay interest under section 234B and 234C

Deputy Commissioner of Income Tax, Circle- 4(1)(1), Bangalore vs. M/S. Lifestyle International Private Limited, Bangalore

In the result, the assessee’s appeal stands allowed and revenue’s appeal stands dismissed

ITA 93/BANG/2020[2013-14]Status: DisposedITAT Bangalore18 Nov 2022AY 2013-14

Bench: Smt Beena Pillai & Shri Laxmi Prasad Sahuassessment Year : 2013-14 M/S. Lifestyle International Pvt. Ltd., 77, Town Centre, The Deputy Building No. 3, Commissioner Of West Wing, Income Tax, Off Hal Airport Road, Circle – 4(1)(1), Yamlur, Vs. Bengaluru. Bengaluru – 560 037. Pan: Aaacl2937J Appellant Respondent & Assessment Year : 2013-14 (By Revenue)

Section 2Section 37Section 43(6)(c)Section 50B

reading of section 50 B it is abundantly clear that it is a code in itself for determining cost of acquisition and cost of improvement of undertaking but not for computation of capital gains in case of slump sale. The object of section 50 B is to determined the cost ... acquisition and cost of improvement which is vital for computing capital gains under section 45 of the Act. Thus the full value of consideration in the slum sales needs to be determined by reducing the value of liabilities of an undertaking from their great value of all assets

Mohideen Gafoor, Chennai vs. Income Tax Officer, Non Corporate Ward 1(3), Chennai

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

ITA 137/CHNY/2022[2011-12]Status: DisposedITAT Chennai16 Nov 2022AY 2011-12

Bench: Shri Mahavir Singhand Shri G. Manjunatha

For Appellant: Shri N V Narayanan, AdvocateFor Respondent: Shri R. Mohan Reddy, CIT

Section 143(3)Section 147Section 148Section 263

cannot consider, the order to be erroneous, when the assessing officer did not have any belief of escapement of income in respect of cost of improvement. 4. Brief facts are that the assessee is an individual, filed a belated return of income on 31.07.2013 for the relevant assessment year ... interest of Revenue for the reason that as per the revised computation of income, schedule 2, the assessee has claimed Rs.34.64 lakhs as cost of improvement during the financial year 2004-05 while arriving at the long term capital gain and the cost of improvement was also indexed. The nature

M/S. Sumit Exports, Mumbai vs. The ACIT 19(3), Mumbai

ITA 645/MUM/2022[2013-14]Status: DisposedITAT Mumbai10 Nov 2022AY 2013-14

Bench: Shri Kuldip Singh, Hon'Ble & Shri S. Rifaur Rahman, Hon'Blem/S. Sumit Export V. Acit – 19(3) Dw-5030, 5Th Floor Matru Mandir, Tardev Road D.Tower, Bharat Diamond Bourse Mumbai – 400 007 Bandra Kurla Complex Bandra (E), Mumbai -400051 Pan: Aacfs3599Q (Appellant) (Respondent) Assessee Represented By : Shri Rahul Sarda Department Represented By : Shri Manoj Sinha

Section 143(1)Section 143(2)Section 2(14)Section 2(47)

transaction as under: - Transfer Price 1,93,00,000 Indexed cost of acquisition (32,91,000*852/351) [1998-99] 79,88,410 Indexed cost of improvement (1,62,000*852/447) [2002-03] 31081779 Indexed cost of improvement (2,43,000*852/463) [2003-041 447,162 Indexed cost of improvement ... 852/480) (2004-05) 862,650 Indexed cost of improvement (3,97,000*852/497) [2005-061 509,143 Indexed cost of improvement (9,64,800*852/519) 12006-07] 1,583,834 Indexed cost of improvement (1,35,000*852/389) (1999-2000] 295,681 Long Term Capital gain

K.Gopalakrishnan, Chennai vs. ITO International Taxation 1(1), Chennai

The appeal stands partly allowed in terms of our above order

ITA 1501/CHNY/2018[2013-14]Status: DisposedITAT Chennai02 Nov 2022AY 2013-14

Bench: Hon’Ble Shri V. Durga Rao, Jmand Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Smt. T.V.Muthu Abirami (Advocate) – Ld. ARFor Respondent: Shri AR.V. Sreenivasan – (Addl. CIT) – Ld. Sr. DR

Section 143(3)Section 154Section 264Section 54

computed capital gains of Rs.24.73 Lacs. The assessee preferred further appeal to seek adjustment in cost of acquisition as well as cost of improvement which was allowed by ld. first appellate authority vide order dated 23.04.2018. 7. The perusal of assessment framed in the hands of Smt. Sharda Menon

Ravikumar Tirupati Parthasarathy, Bangalore vs. The Deputy Commissioner of Income Tax, Circle-2(1), Bangalore

In the result, the appeal is allowed for statistical purposes

ITA 676/BANG/2022[2019-20]Status: DisposedITAT Bangalore28 Oct 2022AY 2019-20

Bench: Shri N.V. Vasudevan & Ms. Padmavathy Sassessment Year : 2019-20

For Appellant: Shri Arjun Raj, CAFor Respondent: Shri K. Sankar Ganesh, Jt.CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 144C

proceeded to consider a sum of Rs.49,08,340 as the cost of acquisition (registered value of the property and cost of improvement) and arrived at the capital gain which resulted in an addition of Rs.52,89,346. Aggrieved, the assessee filed its objections before ... para 8 of the Draft Assessment Order. Hence, this panel upholds the action of AO. f) Assessee contended that AO has not considered cost of improvement of the property by the assessee/objector amounting to Rs.13,35,085/- for which cost inflation index works out to Rs. 28,72,679/- while

Abbasbhai A. Upletawala, Mumbai vs. ITO WD 16(1)(1), Mumbai

In the result, the appeal is allowed for statistical purposes in the terms indicated above

ITA 5332/MUM/2015[2006-07]Status: DisposedITAT Mumbai21 Oct 2022AY 2006-07

Section 143(3)Section 3Section 45

this stage. Let the CIT(A), if so necessary, recompute the capital gains after taking into duly indexed cost of acquisition and the cost of improvement, and let the assessee furnish necessary information input in this regard. This aspect of the matter also, therefore, may be examined afresh

Joseph Mudaliar, Mumbai vs. DCIT, -CC 4 (3), Mumbai

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

ITA 7199/MUM/2019[2014-15]Status: DisposedITAT Mumbai26 Sept 2022AY 2014-15

Bench: Shri Om Prakash Kant & Shri Sandeep Singh Karhail

For Appellant: Shri Ashok Sharma a/wFor Respondent: Shri Ajeya Kumar Ojha

Section 143(3)Section 14ASection 2(22)(e)Section 234ASection 250

share holder of Jaya Jewellery P. Ltd. 4. The Learned CIT(A) has erred in disallowing Rs. 79,24,051/- as cost of improvement of Shop B1 at Mayur Tower. However same was offered by appellant as undisclosed income before income tax settlement commission for AY 2006-07 during ... issue arising in ground no. 4, raised in assessee‟s appeal, is pertaining to disallowance of Rs. 79,24,051, as cost of improvement of shop owned by the assessee. 11. The brief facts of the case pertaining to this issue, as emanating from the record, are: During the year