Taxpayer Filed Copy of Bills and Bank Transaction Evidences: ITAT allows 40 lakhs Addition while Calculating LTCG from Property Sale [Read Order]

The Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) allowed Rs. 40 lakhs addition while calculating Long-Term Capital Gains ( LTCG ) from the sale of property as the taxpayer filed copies of bills and bank transaction as evidences.

The assessee Srikanth, file an appeal for disallowance of further investment of Rs.40,00,000/- claimed by the assessee while computing LTCG derived from transfer of property. The A.O has not considered additional payment made by the assessee to the builder for construction of building and further improvement in the property on the ground that the assessee could not furnish any evidences including payment details and bills for improvement to the building.

 Mr. N Arjun Raj, representing the assessee has filed certain evidence, but could not furnish bills for construction during the course of assessment proceedings. Further, the assessee has obtained certain additional evidences like bill from KK Builders to prove that the assessee has paid a sum of Rs. 40,00,000/- to the builder for improvement of the property and also filed bank statement evidencing payment through proper baking channel.

The bench found that the assessee claimed that cost of new house including a sum of Rs. 40,00,000/- paid to KK Builders for further improvement to the property. In this regard, the assessee has filed a copy of bill issued by KK Builders and the bank statement to prove that the said payment has been made through banking channel. These evidences were not before the A.O.

The two member bench of the tribunal comprising Manomohan Das (Judicial member) and Manjunatha. G (Accountant member) concluded that the matter needs to go back to the file of A.O to give one more opportunity to the assessee to substantiate his claim of cost of new house including sum of Rs.40, 00,000/- paid to Builder for construction of building including improvements to the property. In case, the assessee was able to establish the claim of cost of new house with necessary evidences then, the A.O may verify the claim of the assessee and allow additional amount of Rs.40,00,000/- as claimed by the assessee while computing LTCG derived from sale of property.

Accordingly, the appeal filed by the assessee was partly allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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