Vishnukumar Gokalchand Gupta Vs ACIT (ITAT Mumbai)
ITAT Mumbai Remands Case – Fresh Verification Ordered on Cost of Improvement in Capital Gains
Assessee sold a property for ₹7.93 crore in FY 2015-16. While computing long-term capital gains, he claimed ₹1.41 crore as indexed cost of improvement – comprising ₹36.52 lakh spent by him on the first floor & ₹1.04 crore incurred by his brother on the second floor before gifting that portion to Assessee.
AO rejected the claim holding that the bungalow purchased in 1988 was already a completed house & that no evidence was produced to prove any construction or major improvement. CIT(A)/NFAC also upheld the disallowance, observing that documents submitted during remand did not conclusively establish actual expenditure on improvement.
Before the Tribunal, Assessee argued that the property purchased in 1988 was incomplete & that substantial construction was completed by 1993-94. He produced additional evidences such as BMC’s commencement certificate, intimation of disapproval, architect’s appointment, plinth-level completion letter, sample invoices, & completion certificate dated 08.04.1995 to substantiate the claim. It was contended that due to the old nature of records, the documents could not be retrieved earlier.
After hearing both sides, ITAT noted that these documents prima facie supported Assessee’s contention that the construction & improvement were indeed carried out after purchase. The Bench observed that such evidences were crucial for determining the true cost of improvement under section 49(1). Since factual verification was necessary, the Tribunal admitted the additional evidences & restored the matter to the AO for detailed examination & fresh adjudication.
