TMI Blog2020 (7) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... is shown as residential plot no. 10 Plot No.10, Bajrang Nagar, Village- Cha Getor, Tehsil-Sanganer, District Jaipur and even the site plan attached with the sale deed depicts the plot of land and doesn t show any constructed area thereon. At the same time, there is averment towards the end of the said sale deed that in the plot so sold, there is constructed area of 900 sq feet. We therefore find inconsistency in the sale deed so executed so far as the exact description of the property is concerned. It unusual that construction of 900 sq feet as so claimed by the assessee has taken around eight months time to construct and thereafter, as soon as construction was completed, the assessee has sold the property in less than a month. If the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on facts and in law in confirming the disallowance of indexed cost of improvement of ₹ 4,18,500/- claimed by the assessee on sale of plot, thereby computing the long term capital gain at ₹ 4,17,235/- as against long term capital loss of ₹ 1,265/- computed by the assessee. 2. The Ld. CIT(A) has erred on facts and in law in holding that agreement with contractor and his affidavit in respect of expenditure incurred on cost of improvement looks an afterthought story without any material basis. 2. During the course of hearing, the ld AR submitted that the assessee filed his return of income on 09.07.2010 declaring total income of ₹ 2,05,580/-. Thereafter, the AO issued notice u/s 148 on 27.03.2017 for the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d payment of taxes. Accordingly, he disallowed cost of improvement of ₹ 4,18,500/- and computed long term capital gain at ₹ 4,17,235/-. The Ld. CIT(A) confirmed the disallowance made by the AO and against the said findings, the assessee is in appeal before the Tribunal. 4. The ld AR submitted that from the facts stated above, it can be noted that the only dispute in the present case is the allowability of expenditure of ₹ 4,18,500/- incurred on construction of basement on the said plot. The fact that at the time of sale, there was construction of 900 sq. ft. is evident from the sale deed and the site plan attached with the sale deed. At the time of purchase of this plot, there was no construction as is evident from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht story is on surmises conjectures. In view of above, the ld AO be directed to allow the claim of cost of improvement at ₹ 4,18,500/- and consequently delete the addition of ₹ 4,17,235/- made by him in computing the long term capital gain. 5. The ld DR is heard who has vehemently argued the matter and submitted that the documents submitted by the assessee in support of cost of improvement has rightly been rejected by the ld. AO and the ld CIT(A). It was submitted that the contract note signed by the contractor is not a legal document, there is no proof that the construction has been actually carried out and at which part of the plot since only a part of the plot has been sold, there is no proof of payment to the contractor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, the claim of the assessee that out of 1200 sq feet of plot of land, there is construction of 900 sq feet and what has therefore been sold is a plot of land along with construction thereon cannot be accepted. The agreement with the contractor dated 30.04.2009 and subsequent affidavit of the contractor dated 23.10.2017 therefore doesn t inspire any confidence and cannot be accepted. Unless the assessee is able to demonstrate with verifiable evidence that there was actual construction on the property so sold, these agreement and affidavit cannot come to the aid of the assessee. The agreement is only an understanding between the two parties to carry out certain work and therefore, merely reflect an intention and understanding between t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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