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How to determine cost of improvement in case of sale of old or inherited land / building in the absence of any material i.e. evidence or documents

Income Tax - Direct Tax Code - DTC - By: - CA Surender Gupta - Dated:- 29-9-2016 Last Replied Date:- 30-9-2016 - The question arises in the present cases, perhaps a common question specially where the land and building are old one and sold. In general for old contraction or improvements, assessee does not have any evidence or documents to prove the cost of construction improvement. In such a situation, for the purpose of computation of Long Term Capital Gain and in compliance of the provisions o .....

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t ₹ 5,00,000 without any material. Except to state that the Mugappair area was actually a low lying area leading to water logging and that the assessee had put up a construction to the compound wall, the Commissioner granted the claim of the assessee absolutely unsupported by any material on record to support the claim that the assessee had incurred ₹ 5,00,000 towards cost of improvement at ₹ 5,00,000. Rightly, the Tribunal rejected the plea of the assessee and allowed the appe .....

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ent sources from which the money has been brought in. The assessee also has explained that during those days bank accounts were not so common and large families use to keep cash with themselves as most of the receipts were from agriculture and other allied sources. The fact that without improvements the assessee would not have received this amount is also pointed out. …….. In the circumstances and facts of the case, it is evident that the assessee has made substantial improvements .....

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