Merely making Entries in books not discharge initial burden of proof regarding claim of cost of Improvement of Assets: ITAT [Read Order]
The Tribunal noted that the assessee had failed to discharge the initial burden of proof rested on him to substantiate his claim of having incurred expenditure on improvement of the property.
ITAT Chandigarh – Tax news- ITAT news – Taxscan
ITAT Chandigarh – Tax news- ITAT news – Taxscan
In a recent case, the Chandigarh bench of Income Tax Appellate Tribunal (ITAT) held that merely making entries in books not discharge initial burden of proof regarding claim of cost of improvement of assets. It was noted that the assessee had failed to discharge the initial burden of proof rested on him to substantiate his claim of having incurred expenditure on improvement of the property.
The Assessing Officer ( AO ) noted that the assessee , Shri Charanjit Singh while returning the income from capital gains of Rs.2,16,45,122/-, had claimed an amount of Rs.9 lacs towards cost of improvement of the property sold. The AO asked the assessee to substantiate its claim of the said expenditure with evidence. The assessee produced vouchers, which the AO stated were self-made. He further held that no evidence of improvement or tax deduction at source on the payment made was provided by the assessee. Accordingly, he disallowed the deduction claimed by the assessee of the cost of improvement while calculating the capital gains earned.
On appeal, the CIT(A) held that considering the fact that it was the assessee who had claimed an expenditure of Rs.9 lacs on the improvement of the building, the onus was on him to prove the same and also considering the fact that the bills did not bear any revenue stamp and gave no description of the work done and neither was it clear that they were bills or cash receipts and therefore, upheld the disallowance/addition made by the AO.
The Bench found that there was no mention of the nature of work done for which the invoices were raised, the address on the same was also incomplete since letters issued by the department on the said address were returned back by the postal department with the comment “incomplete address”.
The two member Bench of Aakash Deep Jain ( Vice President ) and Vikram Singh Yadav ( Accountant Member ) observed that merely making entries in the books of accounts and producing bills which are deficient in providing basic information regarding the transaction, is not sufficient for discharge of initial burden of proof on the assessee regarding its claim of cost of improvement.
The ITAT therefore dismissed the assessee's appeal.
To Read the full text of the Order CLICK HERE
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