2022 (5) TMI 1125 - AT - Income Tax

Revision u/s 263 - assessee failed to prove her claim for expenditure incurred so as to claim cost of improvement on the basis of vouchers furnished by the assessee which does not carry signatures and basic details - As per CIT vouchers for cost of improvement were not verified at all by the AO - HELD THAT - Though the assessee has filed written arguments vide her letter dated 15.05.2018 no material evidence for the claim of cost of improvement, construction, redevelopment expenditure have been placed before us. In the absence of any details, we are not in a position to interfere with the order passed by the ld.CIT, invoking provisions of section 263 of the Act. Thus, the grounds raised by the assessee are hereby rejected.

Summary

Issues:
Assessment under section 263 of the Income Tax Act, 1961 for the assessment year 2010-11.

Analysis:
1. The appeal was filed against the order invoking section 263 of the Income Tax Act, 1961. The assessee had declared a total income for the assessment year 2010-11. The assessment revealed discrepancies in the cost of acquisition and improvement claimed by the assessee concerning the sale of immovable property.

2. The Tribunal noted that the land area sold was inaccurately calculated, leading to an incorrect cost of acquisition. Specific discrepancies were identified in the survey numbers and areas of land sold, which impacted the revised cost of acquisition. The Tribunal highlighted the need for accurate calculations to determine the capital gain correctly.

3. The assessment also raised concerns about the cost of improvement claimed by the assessee. The Tribunal observed that the indexed cost of improvement significantly exceeded the indexed cost of acquisition. The documentation provided by the assessee lacked essential details such as dates and signatures, raising doubts about the authenticity of the claimed expenses.

4. The Commissioner, after reviewing the assessment records, found that the Assessing Officer had not verified the vouchers for the cost of improvement adequately. The Commissioner determined that the assessment order was erroneous and prejudicial to the revenue's interest due to the lack of verification and authenticity of the claimed expenses.

5. The Commissioner set aside the assessment order and directed a de novo assessment, allowing the assessee an opportunity to provide substantiated evidence for the claimed expenses. The assessee challenged this decision through an appeal, arguing that the original assessment was not erroneous or prejudicial to the revenue's interest.

6. The Tribunal considered the arguments presented by both parties and found that the assessee failed to provide sufficient evidence to support the claimed expenses for improvement, construction, and redevelopment. As a result, the Tribunal upheld the Commissioner's decision to invoke section 263 of the Act, dismissing the appeal and affirming the revision order.

7. The Tribunal emphasized the importance of providing verifiable evidence to support claims during assessments to ensure accuracy and compliance with tax regulations. The decision highlighted the need for thorough verification of expenses and documentation to prevent erroneous assessments and protect the revenue's interests.