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2018 (12) TMI 1250 - ITAT COCHINCapital gain computation - Disallowance of the claim of indexed cost of improvement - Held that:- The assessee had produced the original purchase deed executed for the financial year 1993-1994 for a total consideration of ₹ 1,54,360. In the said sale deed, the description of the property is enumerated as paddy field. The assessee has also produced a copy of the land acquisition notice u/s 9(13) of the Land Acquisition Act, 1894, wherein it is clearly enumerated the land as a “filled wet land”. Therefore, these documents clearly show that when the purchase of the impugned property was made, it was a wet land and subsequently when it was compulsorily acquired, the same was a filled wet land. AR, in the course of hearing, had produced old note book, wherein the expenditure incurred for filling up of the land and constructing a compound wall was hand-written. The translated copies of the said note book was also enclosed therefore, the conclusion of the CIT(A) that no evidences were produced before him, for incurring cost for improvement of land, was factually incorrect. There is no doubt that the land purchased by the assessee was paddy wet land, which was subsequently filled up and the same is evidenced from both the purchase deed and the land acquisition notice. The assessee, out of 34 cents, had sold 6 cents of land in April 1996. The said 6 cents of land was sold after incurring cost for improvement and had fetched higher sale price of ₹ 45,000 per cent compared to ₹ 4,500 per cent for which it was purchased in the year 1993. The assessee has also produced the details of the expenses incurred for filling of land and compound wall, which worked out to more than ₹ 8,000 per cent. AO and the CIT(A) were not justified in denying the claim of indexed cost of improvement on the land. Accordingly, we direct the A.O. to re-calculate the LTCG after taking into account the indexed cost of improvement of ₹ 8,000 per cent, which was incurred during the period July 1995 to March 1996.
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