The Hyderabad bench of the Income Tax Appellate Tribunal (ITAT) has recently held that assessees could not claim cost of improvement and indexation cost unless they provide evidence to prove construction.
Assesse Vasamsetty Veera Venkata Satyanarayana, is an individual and derives income from business, long term capital gain and from other sources. A search and seizure operation under Section 132 of the Income Tax Act was conducted on the assessee as part of the searches conducted on M/s. Skill Promoters Pvt. Ltd Group and others.
Accordingly, notice under Section 153C of the Income Tax Act, was issued to the assessee. Assessee did not respond to the notice and not filed return.
Thereafter, assessee filed return of the income for the Assessment Year 2016-17. Subsequently notices were issued to the assessee then assessing officer had completed the assessment under Section 153C of the Income Tax Act, interalia by making addition of Rs.1,30,01,435/- on account of Long Term Capital Gains.
Aggrieved assessee filed an appeal before CIT(A). The CIT(A) partly allowed the appeal therefore assessee filed second appeal before the tribunal.
Ramakrishnan, counsel for the assessee submitted that the registered sale deed though recovered from the residential premises of searched person, could not be said to be an incriminating document registered sale deed was available in public domain and therefore, cannot be said to be an incriminating document
Rajendra Kumar, counsel for revenue, submitted that on the basis of the registered sale deed, the assessee had claimed long term capital gain and indexation cost whereas in the agreement of sale dated 21.11.2015 the property has been shown as vacant plot of land. Hence considering the above assessee had wrongly claimed long term capital gain as well as indexation cost.
The tribunal observed that, to claim the cost of improvement and indexation cost, assessee has to furnish some evidence and in the absence of any evidence or information, then the information contained in the registered sale deed is required to be accepted.
Therefore, the information contained in the registered sale deed relates to the assessee and Assessing Officer rightly invoked the jurisdiction under section 153C of the Income Tax Act.
Thus, the two member bench of RamaKanta Panda, Accountant Member and Laliet Kumar, Judicial Member dismissed the appeal filed by the assessee.
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