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TMI Blog2021 (10) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee, he should have been enquired through a builder who constructed the building inspite of neighbours - CIT(A) keeping in view the above and also by considering all other factors and also take into consideration that the assessee is not residing at Chennai he is only residing at Mumbai, he disallowed an amount of ₹ 5,00,000/- for lack of evidence and directed the A.O to allow the benefit u/s. 54 of the Act to the extent of ₹ 18,00,000/-. We have gone through the entire order of the Ld. CIT(A), we find that the disallowance made by the Ld. CIT(A) to the extent of ₹ 5,00,000/- is fair and reasonable and we find that no interference is called for. In view of the above, the appeal filed by the Revenue is dismissed. - ITA No.301/Chny/2020 - - - Dated:- 30-9-2021 - Shri V. Durga Rao, Judicial Member And Shri G. Manjunatha, Accountant Member For the Appellant : Mr. K. Meenakshi Sundaram, ITP For the Respondent : Mr. G. Johnson, Addl. CIT ORDER PER V. DURGA RAO, JUDICIAL MEMBER: This appeal filed by the Revenue is directed against the order of the learned Commissioner of Income Tax (Appeals)-13, Chennai in I.T.A No.112/2018-19/CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he entire amount. 4. On appeal, the Ld. CIT(A) has disallowed an amount of ₹ 5,00,000/- and directed the A.O to allow the improvement cost to the extent of ₹ 18,00,000/-. For the sake of convenience, the relevant portion of the order is extracted as under: 6. Now, I have carefully gone through the undisputed / uncontroverted facts marshalled and presented by the AO/AR, as reflected, essentially, in the excerpts from the assessment order and the submissions of the AR quoted supra as also the discussion aforesaid bolstered by supporting evidence relied on by the rival parties but on a relative and comparative consideration of the same, I am persuaded by the more substantive and meritorious reasoning / substantiation adduced by the AR on the issue at hand. 7. Firstly, the AO appears to have not appreciated the fact that any new buyer of an undisputedly old house will carry out improvements to make the house habitable to his convenience and he should have taken into account this human nature while appreciating the facts to verify for which he should have also been better served to have referred the case to the departmental valuer for a more scientific valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emption claimed u/s 54 amounting to ₹ 23,00,000/-, the same is disallowed as not proved. 7.2 It is common practice that an old house undisputedly purchased in the instant case would have many defects / disadvantages which normally does need to be rectified for dwelling purposes and the expenses claimed would therefore be towards renovation of the same and does not appear to be excessive or unreasonable for a Residential Class II Type II Upper middle class construction in a relatively upper middle class area in Avadi, Chennai. 7.3 The AO would therefore have done better to conduct basic enquiries with the Builder as to details of the cost of improvements as claimed in the matter rather than ascertain the same from neighbours / tenants who would have been hardly aware of any such development, much less the intricate details of the said improvement. 7.4 In the absence of any such exercise carried out by the AO, the details recorded by the Inspector who visited the new house are only the facts he had seen on the spot and not corroborative evidences to buttress his observations and disprove the evidences presented by way of bills and invoices. Therefore the inferen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reponderance of probability which would be applicable in the Instant case. Income Tax law being a special law and under this law evidence for anything and everything is not imperative and Income Tax Officers are not equated with the Judicial Officers of the Civil Court who follow Indian Evidence Act and decides any issue only on the basis of strict evidences produced by both parties. The following case laws support the proposition that strict proof is not necessary for reaching a decision in income tax matters; (i) CIT vs. Smt. Vimalaben Bhagavandhas Patel (1979) 118 ITR 134 (Guj) (ii) Anraj Narain Dass vs CIT (1951) 20 ITR 562 (Punj) (iii) Laxmin Co vs CIT (1959) 37 ITR 461 (All) (iv) Devi Dass Madhav Prasad vs CIT (1967) 63 ITR 356 (All) 9.1 The Income Tax Officer has discretion to take into account the principle of preponderance of probabilities and the facts of a case has to be appreciated in the light of the above legal principles and the facts obtained in an impugned case. 9.2 The assessee in the instant case was and is now working in Mumbai and wanted to have a house for his permanent residence whenever he visits Chennai on vacation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mainly, based on the enquires made with the neighbours, he came to the conclusion that the assessee has not carried out any improvement work and disallowed the entire expenditure claimed by the assessee. On appeal, the Ld. CIT(A) is of the opinion that if the A.O wanted to know exactly about the improvement works carried out by the assessee, he should have been enquired through a builder who constructed the building inspite of neighbours. Further, the Ld. CIT(A) keeping in view the above and also by considering all other factors and also take into consideration that the assessee is not residing at Chennai he is only residing at Mumbai, he disallowed an amount of ₹ 5,00,000/- for lack of evidence and directed the A.O to allow the benefit u/s. 54 of the Act to the extent of ₹ 18,00,000/-. We have gone through the entire order of the Ld. CIT(A), we find that the disallowance made by the Ld. CIT(A) to the extent of ₹ 5,00,000/- is fair and reasonable and we find that no interference is called for. In view of the above, the appeal filed by the Revenue is dismissed. 9. In the result, the appeal filed by the Revenue is dismissed. Order pronounced on 30th Septembe ..... 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