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2020 (10) TMI 1190 - AT - Income TaxRevision u/s 263 - Claim of cost of improvement - variance in the stands of the two sides, the assessee and the builder - HELD THAT:- Factors such as enquiry with the owners regarding the flooring, etc., and, equally, the nature and uniformity of the difference between the two sets of flats/duplexes, etc. would only complete the enquiry, establishing, completely missing, whether the stated modification was actually carried out and, if so, at the assessee’s instance, justifying payment of additional sum by him, at whatever value, to the Builder. Again, while the assessee claims marble flooring only in the bed rooms, the report says of it being in all the rooms. What does that mean: Has the Builder, in benevolence, provided marble even where not sought by the assessee? The inspection by the inspector, i.e., assuming so, is, thus, worthless and, in any case, farcical, if not a pretense. The said report – which does not concern the cost aspect – is to be, thus, at the highest, ignored, and, in the least, considered a sham document. That is, to be, either way, rubbished. Coming back to our earlier observation of the Builder having in fact, rather than confirming, refuted the assessee’s stand as to the payment thereto being toward cost of improvement. To clarify matters, there was in fact no enquiry by the AO with the Builder. AO notes a complete variance in the stands of the two sides, the assessee and the builder, and yet chooses to ignore the same, stating (in the ON) the same to be rather a reason for re-examination in the case of the Builder. The same is incomprehensible as, firstly, it is his prime duty to consider the validity of the claims of the assessee – wholly un-evidenced and, two, the avoidance of tax, if any, is, as would be apparent from the foregoing, in the assessee’s case. Assessee has reported receipt of ₹ 45 lacs by cheque/s, as against ₹ 40 lacs stated by the Builder, toward cash component of the consideration on transfer of land. But, then, the same would stand to be confirmed with reference to the latters’ books and, where accounted, as it, being by cheque/s, would presumably be, does not result in/lead to any loss of revenue. As such, the AO seeking, on the contrary, a re-examination of the Builders’ case, is perverse and, in any case, itself proves the need for verification to resolve the contradicting claims of the parties. Non-examination of the sale deeds by the AO, stated to be incorrect by Shri Purohit - There is a tacit admission of the relevance of the said deeds, as well as their examination by the assessing authority. He, however, could not exhibit their production in the assessment proceedings, much less their examination. Even as much as a letter or communication, i.e., in reply to the queries/requisition dated 16.3.2015, has not been brought on record. How could, one wonders, the direction by the ld. Pr. CIT for their production and examination by the AO, under the circumstances, be regarded as unjustified or not valid in law. The assessee’s case is, in view of the foregoing, both, wholly unproved and wholly unexamined, i.e., qua the two aspects referred to by the ld. Pr. CIT. To say, therefore, that the AO has taken a possible, reasonable view in the matter, is, under the circumstances, a complete misstatement on facts. He has, in our view, acted with haste and without due application of mind, accepting the assessee’s version, wholly unsubstantiated, without as much as causing its substantiation, much less verification thereof and, in fact, on one aspect, in face of contrary evidence/material. - Decided against assessee.
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