The Income Tax Appellate Tribunal(ITAT) “SMC” Bench, Mumbai, has recently, in an appeal filed before it by an assessee, held that allowance on the cost of improvement is not claimable in the absence of supporting bills, vouchers, source funds etc.
The aforesaid observation was made by the Tribunal when an appeal was preferred before it by an assessee, challenging the impugned order dated 30/09/2019, passed under section 250 of the Income Tax Act, 1961, by the Commissioner of Income Tax (Appeals)– 40, Mumbai, for the assessment year 2006–07.
The ground of the appeal as raised by the assessee being that the Commissioner of Income Tax (Appeals), CIT (A) , has erred in confirming the addition of Rs.81,775/- which was the cost of improvement to the godown sold during the year under consideration, without taking cognizance of the details & submission filed by her on 22/01/2013, 31/10/2014 and 30/09/2019, before dismissing her appeal , the assessee was pleading for the deletion of the said addition made ,which according to the her was unjustified .
The brief facts of the case pertaining to the issue being the assessee’s failure to submit proof with regard to cost of improvement claim of Rs.81,775, with supporting bills, date of incurring such expenditure, source of funds, etc. during the course of the assessment proceedings, followed by the Assessing Officer’s order passed under section 143(3) of the Act, disallowing the improvement cost as claimed by the assessee, and the CIT(A)’s subsequent dismissal of the assessee’s appeal on this issue, the Tribunal commented as follows:
“We have considered the rival submissions and perused the material available on record. In the present case, we find that the claim of the assessee was denied by the lower authorities in the absence of proof with regard to cost of improvement claimed by the assessee.”
“And even during the hearing before us, apart from showing certain photographs, the assessee has not produced any supporting bills, vouchers, source of funds, etc., in respect of its claim on account of cost of improvement”, the Bench added.
Thus, disallowing the assessee’s claim the Tribunal concluded:
“In the absence of these supporting details, we do not find any infirmity in the orders of the lower authorities denying the claim of the assessee on this issue.”
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