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2019 (12) TMI 599 - AT - Income TaxDisallowance of cost of construction cost of improvement of property while computing the Long Term Capital Gain - No documentary evidences in support of the construction work of boundary wall - HELD THAT:- The assessee has not produced any documentary evidences in support of the construction work of boundary wall except the receipts issued by these persons namely Shri Sharwan Lal Saini, Shri Arjun Lal Kumawat and Shri Sita Ram Verma, as well as affidavit of these persons. However, if the boundary wall which is a matter of fact and existence is found existed on the plot of land then the claim of the assessee cannot be rejected in toto. Only dispute between the assessee and AO is with regard to correct cost of construction of boundary wall. AO has not conducted any enquiry to contradict the claim of boundary wall on the plot of land. AO has denied the claim of cost of construction but has not denied that boundary is constructed. Therefore, once the existence of the assessee’s boundary wall is not denied by conducting any enquiry or verification of the fact by the AO then the claim of cost of construction made by the assessee cannot be denied in toto. The assessee has claimed the cost of construction at ₹ 3.83 lacs and filed the receipts as well as affidavits of three persons to whom payment was made for the work of cost of construction of boundary wall. Though the AO could not examine these persons for want of service of notice yet the cost of construction of boundary wall could have been otherwise estimated by the AO through expert being DVO. In the absence of carrying out such an exercise of ascertaining the correct cost of construction on the part of the AO, the evidences produced by the assessee cannot be rejected. Accordingly, in the facts and circumstances of the case, the claim of cost of construction of boundary wall deserves to be allowed. It is clarified that since it is a case of construction of boundary wall, therefore, the non-mentioning of the same in the sale deed will not ipso fact lead to the conclusion that boundary wall was not in existence on the plot of land. Thus the appeal of the assessee is partly allowed.
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