Case Law Details
Ashwin Kapur Vs ACIT (ITAT Delhi)
Introduction: The appeal by Ashwin Kapur against the final assessment order dated 19.01.2023 is based on the denial of indexed cost of improvement for the property sold during the assessment year 2020-21. The Assessing Officer (AO) disallowed the renovation expenses claimed by the assessee, leading to a challenge and subsequent proceedings before the Dispute Resolution Panel (DRP).
Detailed Analysis: During the assessment year, the assessee sold a property and claimed a deduction under section 48 of the Income Tax Act. The claimed renovation expenses of Rs.9,50,000/- faced scrutiny as the AO found insufficient documentation. The appellant argued that, being an NRI, payments were made through his mother’s accounts, and the renovation was done by Alok Lal through his firm M/s Fourth Dimension.
The DRP, after a remand report, upheld the AO’s decision, citing lack of evidence establishing the relationship between Fourth Dimension and Alok Lal. The appellant argued that the flat required significant renovation before being inhabitable, justifying the claimed expenses.
Citing a similar case, the appellant highlighted the practical challenges of obtaining evidence for renovations carried out several years ago. The appellant also emphasized the use of cheques for payments and cash withdrawals as evidence of genuine expenses.
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