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2024 (5) TMI 543 - ITAT HYDERABADComputation of Long-Term Capital Gain derived from transfer of property - Indexed cost of improvement - AO not considering the cost of construction as per work order to complete the Semi-Finished Residential Flat - AO rejected the claim of the assessee only on the ground that the assessee could not justify the payment of consideration to the vendor with necessary bank statement - HELD THAT:- We are of the considered opinion that the argument of AO that the work order and agreement entered into by the assessee with the vendor is not genuine is totally incorrect and baseless. At the same time, the assessee is also unable to file further evidences to substantiate his case that he has paid a sum to the vendor for additional construction work in the property. Except the work order, the assessee could not furnish relevant bank statement to prove payment to the builder. Unless the assessee file necessary evidences to substantiate its claim, it is difficult for the AO to accept the claim of the assessee only on the basis of the work order. Therefore, we are of the considered opinion that the matter needs to go back to the file of the AO for further verification. Thus, we set aside the order of the AO and restore the issue back to the file of the AO with a direction to reexamine the claim of indexed cost of improvement on the basis of work order and agreement entered into with the vendor for putting up further construction in the property. AO is directed to call for necessary record from the Bank, if so necessary to ascertain the true nature of the work order entered into by the assessee with the vendor. In case the AO finds that the assessee has paid additional amount for further construction, then the AO is directed to allow deduction towards indexed cost of improvement while computing the Long-Term Capital Gain derived from transfer of property. Appeal filed by the assessee is allowed for statistical purposes.
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