ITAT confirms addition of capital gain in absence of evidence
ITAT confirms addition of capital gain in absence of evidence
The Commissioner of Income Tax (Appeals) erred by granting partial relief to the assessee
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has confirmed the addition of capital gain by disallowing the cost of purchase and improvement on failure by the assessee to produce the relevant evidence.
The assessee, Janardhan Gupta is an individual. In the assessment order, the assessing officer (AO) made an addition of capital gain by disallowing the cost of purchase and improvement.
He stated, "No other documentary evidence has been produced during the assessment proceedings for which the assessee stated that a dacoity took place at his residence and the relevant files relating to the property were stolen. In absence of any evidence, the claim of cost of construction and improvement cannot be allowed."
The issue arose when the Commissioner of Income Tax (Appeals) erred in upholding the disallowance of the claim amounting to Rs.3,63,681(30 percent of the total cost of construction) while computing the capital gain. The CIT(A) granted partial relief to the assessee.
Aggrieved by the decision, the revenue department approached ITAT.
The bench comprising Anubhav Sharma (judicial member) and Shamim Yahya (accountant member) observed, "We note that several notices were sent to the assessee, but they returned unserved. No one appeared on behalf of the assessee. Hence, we adjudicate the issue by hearing the department's representative and perusing the records. We find the revenue authorities disallowed the assessee's claim of cost of purchase and improvement de hors any corroborative evidence."
ITAT further stated, "There is no infirmity in the orders of the authorities as the onus is upon the assessee to cogently prove the cost of acquisition and the cost of the improvement. Since he failed to produce the necessary evidence, the authorities are correct in making the disallowance."
