Enhanced cost not substantiated with cogent evidence not allowable as cost of acquisition

Bhausaheb Sopanrao Bhoir Vs DCIT (ITAT Pune)

ITAT Pune held that as enhanced cost of acquisition not substantiated with cogent evidence, the same is not allowable as cost of acquisition of transferred assets.

Facts- The sole and substantive ground is directed against the determination of cost of acquisition of asset where excess payment is made over and above the agreed price consideration in acquiring it.

In a scrutiny assessment u/s 143(3) of the Act, the Ld. Dy. CIT, Circle-9, Pune [‘AO’] vide his order dt. 12/03/2013 assessed the total income at ₹99,28,610/- on account of three additions including the impugned addition of ₹48,70,000/- arising on account of slicing down the cost of acquisition of assets charged to tax on its transfer.

Conclusion- We are of the considered view that, the excess payment (if any) made by the appellant to the parties from whom the pieces of land were acquired does not ispo-facto sufficient it to attribute towards the cost of acquisition of transferred assets. This is so because, there is a complete absence of lawful contractual obligation or a document creating any additional liability upon the appellant purchaser or acquirer for any payment in addition to or over & above the agreed consideration of ₹26,30,000/- in relation to execution of registered POA. Therefore we do not find any infirmity with the orders of both the tax authorities below in disallowing the excess cost while computing the profits in the hands of appellant. For the reason we find the grounds of appeal meritless.

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