Indexation benefit to be Given on Improvement Expenses Increased towards Capital Assets: ITAT [Read Order]

The Income Tax Appellate Tribunal ( ITAT ), Bangalore, has recently, in an appeal filed before it, held that indexation benefit to be given on improvement expenses increased towards capital assets.

The aforesaid observation was made by the Tribunal when an appeal was preferred before it by an assessee as against the order of the CIT(A)-2, Bangalore dated 29.3.2019 for the assessment year 2016-17.

The ground of the assessee’s appeal being that the CIT(A)has erredin enhancing the long-term capital gains of the Appellant by directing the learned assessing officer to compute capital gains without giving the benefit of cost of improvement incurred by the appellant over the holding period of the asset amounting to Rs. 1,40,33,852/- and consequently in not allowing the appellant the indexation benefit on the cost of improvement claimed by the appellant on the facts and circumstances of the case, the Tribunal observed:

“During the course of hearing, the ld.AR fairly accepted that the evidences provided by the assessee had not been appreciated by the revenue authorities and that the amount for Rs. 1,40,33,852/- for cost of improvements has not been given.”

“The expenditure for cost of improvements being incurred from the drawings made by the assessee in the respective years, the assessee is eligible for indexation benefit for the cost of improvement expenses’ increased towards capital assets. ”the bench added drawing its conclusion for the case.

To Read the full text of the Order CLICK HERE

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