Joseph Puthenpurayil Augusthy Vs DCIT (ITAT Cochin)
In a recent ruling, the Income Tax Appellate Tribunal (ITAT) Cochin Bench has provided partial relief to a non-resident Indian (NRI) assessee, Joseph Puthenpurayil Augusthy, significantly reducing the disallowance of construction costs made by tax authorities. The Tribunal restricted the addition to Rs. 10 lakh, a substantial reduction from the initial disallowance of approximately Rs. 1.3 crore, and entirely deleted the disallowance related to the cost of improvement.
The case pertains to the assessment year 2012-2013. Joseph Puthenpurayil Augusthy, an NRI, had filed his income tax return declaring a total income of Rs. 45,01,880. During scrutiny, the Assessing Officer (AO) observed that the assessee had shown business income from the sale of flats, apportioning construction costs over several years and distributing profits between himself and his spouse.
The primary issue arose when the AO requested proof for the claimed construction cost of Rs. 1.32 crore. The assessee reportedly failed to furnish the necessary documentary evidence, leading the AO to disallow the entire claimed cost of Rs. 1.3 crore and add it back to the assessee’s income. This decision was subsequently upheld by the Commissioner of Income-tax (Appeals) [CIT(A)].
Delay Condoned and Appeal Heard
