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08-03-2019, Neelam Nananni, Section 54, 144, 48(1), Tribunal Mumbai

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2 months 6 days ago #8781 by amit
Section - 54, 144, 48(1)
Order Date - 08-03-2019
Favouring - Assessee Partly
Court - Tribunal Mumbai
Appellant - Neelam Nananni
Respondent - ITO
Justice - SAKTIJIT DEY JM & N.K. PRADHAN AM
Citation - 319Taxpundit229
Appeal No. - ITA no.3489/Mum./2016
Asstt. Year - 2005–06

Order

PER : SAKTIJIT DEY, J.M.

Aforesaid appeal has been filed by the assessee challenging the order dated 18th March 2016, passed by the learned Commissioner (Appeals)–32, Mumbai, for the assessment year 2005–06.

2. In ground no.1, the assessee has raised the issue of disallowance of deduction claimed on account of cost of improvement for computing long term capital gain.

3. Brief facts are, the assessee is an individual. For the assessment year under dispute, the assessee filed her return of income on 29th July 2005, declaring total income of ` 5,40,491, after claiming deduction under section 54 of the Income Tax Act, 1961 (for short “the Act”). Assessment in the case of assessee was originally completed under section 144 of the Act determining the total income at ` 69,66,219. Against the assessment order so passed, the assessee carried appeal before the first appellate authority and thereafter to the Tribunal. The Tribunal vide order dated 14th February 2013, restored the matter back to the Assessing Officer for de novo adjudication. In pursuance to the directions of the Tribunal, the Assessing Officer took up the assessment proceed ngs afresh. In the course of assessment proceedings, the Assessing Officer while verifying the computation of long term capital gain by the assessee noticed that it has claimed deduction of an amount of ` 40 lakh under section 48(1) of the Act towards cost of development/improvement. When the Assessing Officer called upon the assessee to furnish the necessary details to justify the claim of cost of development, as alleged by the Assessing Officer, the assessee could not furnish the required details and sought adjournment time and again. Accordingly, the Assessing Officer disallowed assessee’s claim of deduction of ` 40 lakh towards cost of improvement. Though, the assessee challenged the aforesaid disallowance before learned Commissioner (Appeals), however, he also sustained the disallowance on the reasoning that except furnishing a photograph of a bungalow the assessee could not produce any other evidence to demonstrate that it has incurred expenditure towards improvement/development of the property. Accordingly, he sustained the disallowance made by the Assessing Officer.

4. The learned Authorised Representative reiterating the stand taken before the departmental authorities submitted that the assessee had purchased a plot of land in the year 1999 for a consideration of ` 18 lakh. Thereafter, the assessee constructed a bungalow over the said plot of land and at the time of sale of the property the bungalow was still in existence. In this context, he drew our attention to the sale deed dated 17th May 1999 and sale deed dated 12th July 2004. He submitted, the sale deed under which the assessee sold the property clearly mentions existence of a building over the land. He also drew our attention to a photograph of a building kept in a paper book. He submitted, since existence of the building is very much evident, assessee’s claim of deduction under section 48 of the Act towards cost of improvement/development cannot be disallowed entirely. He submitted, in case, assessee was unable to furnish evidence to support the fact that an amount of ` 40 lakh was paid towards construction of

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