Lalita Trehan Vs DCIT (ITAT Delhi)
The assessee appealed against the assessment order dated 31.10.2023 passed under Sections 143(3) read with 144C(13) of the Income-tax Act, 1961, pursuant to the Dispute Resolution Panel (DRP) order dated 14.09.2023, for Assessment Year 2021-22. The dispute related to computation of long-term capital gains arising from the sale of an institutional property situated at DLF City, Phase-II, Gurugram.
The assessee, a non-resident residing in Texas, USA, sold the property comprising land measuring 1.55 acres (7502 sq. yards) with a school building for Rs.23,63,00,000. A Government Registered Valuer’s report dated 05.12.2019 valued the property and formed the basis of the assessee’s computation. The assessee claimed an indexed cost of acquisition of Rs.21,71,77,751, comprising indexed cost of land, construction completed before 2001, construction carried out during FY 2003-04, and land development charges, resulting in declared long-term capital gain of Rs.1,41,22,249 after deduction under Section 54EC.
During assessment, the Assessing Officer (AO) sought documentary evidence supporting the claimed cost of construction of Rs.91,09,820, land development charges of Rs.21,31,493, and the fair market value of land as on 01.04.2001. The assessee relied on the Government Registered Valuer’s report, occupancy certificate, demand notice, and other documents but did not produce bills or vouchers for the FY 2003-04 expenditure. Initially, the AO restricted the claim to 70% of the construction and development expenses.
