ITAT disallows Indexed cost of Acquisition and improvement on Failure to produce Conveyance Deed [Read Order]

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has disallowed the indexed cost of acquisition and improvement on failure to produce conveyance deed.

The assessee, Padmanabhan Mohan, was an NRI. He filed his return of income on 10-06-2017 declaring income which was selected for scrutiny under CASS. Accordingly, statutory notice under Section 143(2) of the Income Tax Act was issued and served upon the assessee. Subsequently, notice under Section 143(2) of Income Tax Act was issued to the assessee.

The assessee in response submitted details as called. The assessee sold an immovable property and after claiming indexed cost of acquisition and improvement, arrived at loss. The assessee claimed that he paid a sum to the builder for the acquisition of the property. Also, he claimed that he paid towards the registration fee. However, the AO noticed that the assessee had constructed the said property as per the master agreement dated 11-01-2007 executed between the assessee and Mahindra Gesco Developers Ltd. The assessee raised a housing loan from the HDFC Bank.

Indexed cost of acquisition and improvement

The AO observed that disbursement of loan was not made in 2006-07. The disbursement took place in the year 2007-08 and accordingly the claim for indexation benefit of the assessee was restricted from the years the assessee made payment to Mahindra Gesco Developers Ltd.

The AO considered the cost of the property only noticing that the assessee failed to submit about the payment made for the balance amount. Regarding the claim for registration charges the AO observed that the assessee did not furnish any proof thereon and the Master Agreement of the parties was an unregistered agreement. Accordingly, claim for registration amount disallowed.

R. Venkata Raman, appeared on behalf of the assessee the assessee is an NRI and it is not possible to furnish such a proof and property has already been sold

D. Hema Bhupal, appeared on behalf of the revenue.

The two-member Bench of Manjunatha G, (Accountant Member) and Manomohan Das, (Judicial Member) observed that the assessee failed to furnish evidence regarding the payment of registration fees. We agree to the observation of the Ld. CIT(A) that payment of stamp duty and registration fees can be ascertained from the conveyance deed under which the assessee acquired the property.

The Bench dismissed the appeal filed by the assessee holding that mere claims without any evidence could not be accepted, whether the assessee was an NRI or resident that was immaterial. As he, the assessee claimed registration charges, evidence thereof had to be furnished. Moreover, the assessee failed to submit the conveyance deed through which the assessee acquired the property in 2008. The total sale consideration of an immovable property could also be ascertained from such conveyance deed

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