2015 (12) TMI 352 - AT - Income Tax

Disallowance of deduction claimed u/s 54 - CIT(A) confirming disallowance of the cost of construction claimed in the computation of capital gains - Held that - It is clear from the facts on records that sale deed which is an important document for transfer of property and the basis of transfer of property u/s 2(47) does not contain any reference to sell / transfer of any residential house or construction. Therefore, no legal inference can be drawn in favour of the assessee on this issue. Despite the AO s insistence, assessee neither produced the contractor nor the supervisor to substantiate his version. Consequently, the assessee failed to discharge the burden cast on him to lead any credible evidence to support his plea about the plot and transfer of the same. Non-discharging of the burden to prove the eligibility of any claim will disentitle the assessee from availing the same. Apropos claim of cross examination, find merit in the arguments of the ld. DR that there is no universal rule to provide cross-examination in each and every case, more so when evidence on record is palpable against the assessee. Even if the evidence of Surendra Kumar Sen is excluded, the evidence on record is clinched against the assessee. In view thereof, the cross examination of Shri Surendra Kumar Sen becomes irrelevant as sufficient material is on record even if the statement of vendee is ignored. In view thereof uphold the order of the lower authorities and reject the claim of the assessee for construction cost and deduction u/s 54F of the Act. - Decided against assessee.

Summary

Issues:
1. Adoption of stamp duty value for calculating capital gain instead of actual selling price.
2. Disallowance of cost of construction and deduction claimed u/s 54.

Analysis:

Issue 1: Adoption of Stamp Duty Value
The appellant contested the adoption of stamp duty value for calculating capital gain instead of the actual selling price, claiming the fair market value was lower. The appellant's request for valuation from the Valuation Officer was not fulfilled. The AO disallowed the claim based on various observations, including the absence of construction on the sold land as per the sale deed and buyer's statement. The CIT(A) upheld the AO's decision, emphasizing the lack of evidence supporting the construction claim and denial of the buyer regarding any construction on the land. The appellant's argument for cross-examination was rejected, stating that the buyer's statement and sale deed sufficed as evidence. The Tribunal affirmed the lower authorities' decision, highlighting the importance of the sale deed and lack of credible evidence to support the construction claim.

Issue 2: Disallowance of Cost of Construction and Deduction u/s 54
Regarding the disallowance of the cost of construction and deduction claimed u/s 54, the appellant failed to produce the contractors or substantiate the construction claim. The absence of any reference to construction in the sale deed and the buyer's denial of any construction on the land strengthened the AO's decision. The CIT(A) and the Tribunal upheld the AO's findings, emphasizing the appellant's failure to provide credible evidence to support the construction claim. The contention for cross-examination was dismissed, stating that the evidence on record was adequate to establish the lack of construction. Consequently, the appellant's appeal was dismissed, affirming the disallowance of the construction cost and deduction u/s 54F of the Act.

In conclusion, the Tribunal upheld the lower authorities' decisions, emphasizing the importance of credible evidence to support claims and the significance of the sale deed in property transactions. The appellant's failure to substantiate the construction claim and provide necessary evidence led to the disallowance of the cost of construction and deduction u/s 54F.