Pre-Possession Fit-Out expense allowed as Improvement Cost for Capital Gains

Shivani Bhasin Sachdeva Vs Assessment Unit (ITAT Mumbai)

The Income Tax Appellate Tribunal (ITAT), Mumbai, has ruled in favor of the assessee, Shivani Bhasin Sachdeva, allowing expenses incurred on interior fit-outs before the formal possession of a property to be considered as “cost of improvement” for calculating capital gains upon its sale. This decision over-turns the orders of the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)], who had disallowed the assessee’s claim. The AO’s primary contention was that since the property

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