ITAT Disallows Cost of improvement As Assessee Did Not Produce Supporting Bills, Vouchers, Source Of Funds

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has disallowed the cost of improvement as the assessee failed to produce supporting bills, vouchers, sources of funds, etc.

The two-member bench of Sandeep Singh Karhail (Judicial Member) and Om Prakash Kant (Accountant Member) noted that the claim of the assessee was denied by the lower authorities in the absence of proof with regard to the cost of improvement claimed by the assessee.

The assessee, being an individual, expired on June 13, 2019. The legal heir of the original assessee has filed revised Form no.36, duly introducing himself as a "Legal Heir" of the assessee. During the course of assessment proceedings, the assessee was asked to submit proof with regard to the cost of the improvement claim of Rs.81,775, with supporting bills, date of incurring such expenditure, source of funds, etc. However, in the absence of any details, the Assessing Officer, vide order passed under section 143(3), disallowed the cost of improvement claimed by the assessee.

The assessee submitted that it purchased a piece of land without any construction on it in the year 1996 and incurred expenditure for construction at A.C. Shield Power Loom Gala. The assessee referred to some pictures of the construction site, which form part of the paper book.

The Tribunal noted that apart from showing certain photographs, the assessee has not produced any supporting bills, vouchers, sources of funds, etc., in respect of its claim on account of the cost of the improvement.

The ITAT did not find any infirmity in the orders of the lower authorities denying the claim of the assessee on this issue.

Case Title: Late Smt. Bhanuben Dhanji Shah Versus Dy. Commissioner of Income Tax Range–23(2), Mumbai

Citation: ITA No.7711/Mum./2019

Date: 22/08/2022

Counsel For Appellant: Vishal Shah

Counsel For Respondent: Smita Nair

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