2019 (5) TMI 1644 - HC - Income Tax

Computation of capital gain - evidence of cost of improvement - contractor in his statement recorded u/s 131 had stated that very petty renovation was made - no substantive or corroborative material was produced by the assessee with regard to the renovation works done - HELD THAT - The Tribunal upheld the addition of ₹ 10,31,906/- made on account of repair and renovation of the property by concluding that from the documents available on record, nowhere it was specified by the assessee as to when the renovation of hotel and from whom the same was done. The assessee had only relied upon quotation dated 26.6.1999 which was rejected by the Assessing Officer and the CIT(A) that the said quotation was not an evidence of actual expenditure incurred on renovation works in the hotel. In the absence of the bills of material and labour or any proof of having incurred renovation expenditure on the hotel building, the claim of the assessee was rightly rejected by the CIT(A). The Tribunal had further observed that the assessee got various opportunities to substantiate his claim, but he failed to establish his case. No illegality or perversity could be pointed out by learned counsel for the assessee in the findings recorded by the CIT(A) and affirmed by the Tribunal which may warrant interference by this Court - appeal is dismissed.

Summary

Issues Involved:
1. Delay in refiling the appeal.
2. Interpretation of tax laws regarding capital expenditure and capital gains.
3. Distinction between criminal and civil jurisprudence in legal proceedings.
4. Assessment of long-term capital gains and deductions related to property transactions.

Issue 1: Delay in Refiling the Appeal
The judgment condoned a delay of 77 days in refiling the appeal. The appeal was filed under Section 260A of the Income Tax Act, 1961 against the order passed by the Income Tax Appellate Tribunal. The delay was considered and allowed by the court.

Issue 2: Interpretation of Tax Laws
The case involved the interpretation of tax laws concerning capital expenditure, capital gains, and deductions. The appellant questioned the Tribunal's findings on the grant of a claim for capital expenditure under specific sections of the Income Tax Act. The court analyzed the facts related to the property transaction, including the cost of acquisition, renovation expenses, and investments made, to determine the chargeability of capital gains.

Issue 3: Distinction in Legal Proceedings
The judgment addressed the distinction between criminal and civil jurisprudence in legal proceedings. The appellant argued that the principles of law applicable to criminal and civil cases differ significantly. The court examined relevant legal precedents to assess the distinct degree of proof required in criminal and civil proceedings.

Issue 4: Assessment of Long-Term Capital Gains
The judgment detailed the assessment process of long-term capital gains and deductions related to property transactions. It outlined the history of the case, including assessments by the Assessing Officer, appeals before the Commissioner of Income Tax (Appeals) and the Tribunal, and subsequent orders. The court reviewed the evidence presented by the appellant regarding renovation expenses and upheld the decisions of the lower authorities based on the lack of substantiating material.

In conclusion, the court found no merit in the appeal after considering the arguments presented by the appellant. The judgment dismissed the appeal, affirming the decisions of the lower authorities regarding the assessment of capital gains and deductions related to the property transactions in question.