BALKRISHNA P. WADHWAN, MUMBAI V. DCIT CEN CIR 36, MUMBAI

ITA 5414/MUM/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9994 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 23-11-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Assessee Lawyers: B V JHAVERIA N SHAH
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Business income; Opportunity of being heard; Source of fund; Cost of acquisition
• Section: 143(3); 50C; 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN , JUDICIAL MEMBER ITA NO. 5414/MUM/2015 (ASSESSMENT YEAR 2010-11) BALKRISHNA P. WADHWAN, BUNGLOW NO.4, VASANT VIHAR COMPLEX, DR.C.G.ROAD, CHEMBUR, MUMBAI 400074 PAN:AAAPW1802G ...... APPELLANT VS. THE DCIT,CEN.CIR.36, AAYKAR BHAVAN,M.K.ROAD, MUMBAI 400020. .... RESPONDENT APPELLANT BY : S/SHRI B.V.JHAVERI/A.N.SHAH RESPONDENT BY : SHRI SUMAN KUMAR DATE OF HEARING : 10/01/2018 DATE OF PRONOUNCEMENT : 28/ 02 /201 8 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTA INING TO ASSESSMENT YEAR 2010-11 IS DIRECTED AGAINST THE ORDER PA SSED BY CIT(A)-53, MUMBAI DATED 31/07/2015, WHICH IN TURN ARISES OUT OF AN O RDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE AC T OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 19/03/2013. 2 ITA NO. 5414/MUM/2015 (ASSESSMENT YEAR 2010-11) 2. IN THIS APPEAL ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C.I.T, (A) ERRED IN HOLDING THAT THOUGH THERE WAS A SALE O F ASSET, SAME WAS NOT HELD AS CAPITAL ASSET AND FURTHER ERRED IN NOT HOLDING THAT THE INDEXED COST OF RS.79,15,886/- AS CLAIMED BY YOUR APPELLANT WAS NOT DEDUCTIBLE IN COMPUTING CAPITAL GAIN. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT (A) ERRED IN DENYING THE DEDUCTION OF RS.74,23,333/-BEI NG THE EXPENSES INCURRED RELATING TO THE PROPERTY SOLD BEING COST OF IMPROVEMENT. 3. BEFORE WE PROCEED TO ADJUDICATE THE SPECIFIC GRO UNDS OF APPEAL RAISED, WE MAY BRIEFLY TOUCH UPON THE BACKGROUND OF THE CAS E. THE APPELLANT BEFORE US IS AN INDIVIDUAL, WHO FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11 DECLARING AN INCOME OF RS.2,56,29,804/-. I N THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT ASSES SEE HAD SHOWN AN INCOME OF RS.2,21,60,781/- UNDER THE HEAD LONG TERM CAPITA L GAIN ON SALE OF A PROPERTY FOR A CONSIDERATION OF RS.3,75,00,000/-. IT WAS AL SO NOTED THAT INDEXED COST OF ACQUISITION WAS CLAIMED BY CONSIDERING THE YEAR OF ACQUISITION AS 1972, AND FURTHER EXPENSES OF RS.74,23,333/- WAS CLAIMED AS C OST OF IMPROVEMENT OF THE SAID PROPERTY. THE ASSESSING OFFICER FURTHER NOTED THAT IN SPITE OF GIVING OPPORTUNITIES, ASSESSEE COULD NOT FURNISH THE PURCH ASE AND SALE AGREEMENTS OF THE PROPERTY IN QUESTION AND, THEREFORE, HE WAS UNA BLE TO VERIFY THE LONG TERM CAPITAL GAIN DECLARED BY THE ASSESSEE. FOR THIS RE ASON, THE ASSESSING OFFICER CONSIDERED THE RECEIPT OF RS.3,75,00,000/- AS INCO ME FROM OTHER SOURCES AND NOT AS A LONG TERM CAPITAL GAIN. 4. BEFORE THE CIT(A) ASSESSEE FURNISHED THE COPIES OF THE PURCHASE AND SALE AGREEMENTS OF THE PROPERTY AND ALSO EXPLAINED THE R EASONS WHY IT COULD NOT BE PRODUCED IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE CIT(A) AFTER ALLOWING APPROPRIATE OPPORTUNITY TO THE ASSESSING OFFICER AD MITTED THE ADDITIONAL 3 ITA NO. 5414/MUM/2015 (ASSESSMENT YEAR 2010-11) EVIDENCE IN THE LIGHT OF RULE 46A OF THE INCOME TAX RULES, 1962. ON THAT BASIS THE CIT(A) CAME TO CONCLUDE THAT THE CONSIDERATION OF RS.3,75,00,000/- WAS RECEIVED BY THE ASSESSEE ON SALE OF AN IMMOVABLE PR OPERTY BUT ACCORDING TO HIM THE SAME WAS NOT A CAPITAL ASSET AND, THEREFO RE, HE DISAGREED WITH THE ASSESSEE THAT THE PROFIT ON SALE OF SUCH PROPERTY I S ASSESSABLE UNDER THE HEAD CAPITAL GAIN. INSTEAD, CIT(A) CONCLUDED THAT THE PROFIT ON SALE OF PROPERTY WAS ASSESSABLE AS BUSINESS INCOME. CONCURRENTLY, THE CIT(A) ALSO OBSERVED THAT IF IN FURTHER APPELLATE PROCEEDINGS, THE PROPERTY IN Q UESTION WAS TO BE TREATED AS A CAPITAL ASSET, THE PROVISIONS OF SECTION 50C OF THE ACT WOULD BE TRIGGERED AND HE DIRECTED THE ASSESSING OFFICER TO RECOMPUTE THE CAPITAL GAIN, AFTER CONSIDERING THE PROVISIONS OF SECTION 50C OF THE AC T, IF SUCH A NEED ARISES. ON THE ASPECT OF COMPUTATION OF CAPITAL GAINS, THE CIT (A) DISAGREED WITH THE ASSESSEE WITH REGARD TO HIS CLAIM FOR EXPENSES OF R S.75,23,333/- AS COST OF IMPROVEMENT, AS ACCORDING TO HIM, THE ASSESSEE HAD FAILED TO ESTABLISH THE INCURRENCE OF SUCH EXPENDITURE. IN THIS BACKGROUND , NOW THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE FIRST AND FOREMOST PLEA OF THE ASSESSEE IS T HAT THE CIT(A) ERRED IN NOT TREATING THE PROFIT EARNED ON THE SALE OF IMPUGNED PROPERTY AS CAPITAL GAIN AND THEREBY ERRONEOUSLY NOT ALLOWING THE BENEFIT OF DED UCTION OF INDEXED COST OF ACQUISITION OF RS.79,15,886/- AS CLAIMED BY THE ASS ESSEE. THE LD. REPRESENTATIVE FOR THE ASSESSEE EXPLAINED THAT THE PROPERTY WAS INITIALLY PURCHASED BY A PARTNERSHIP FIRM M/S.RAM & CO IN 197 2, WHEREIN ASSESSEES FATHER WAS A PARTNER AND ON THE DEATH OF THIS FATHE R IN 1987, THE PARTNERSHIP FIRM AUTOMATICALLY DISSOLVED AND THE PROPERTY DEVOL VED TO THE ASSESSEE. THE LD. REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THA T THE CIT(A) HAS ERRONEOUSLY CONSIDERED THAT THE PROPERTY WAS NOT TO BE TREATE D AS CAPITAL ASSET SINCE IT 4 ITA NO. 5414/MUM/2015 (ASSESSMENT YEAR 2010-11) WAS A BUSINESS ASSET IN THE HANDS OF THE ERSTWHILE PARTNERSHIP FIRM. THE LD. REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT TH E SAID INFERENCE OF THE CIT(A) IS BASED ON MERE CONJUCTURES AND SURMISES AN D THERE IS NO MATERIAL TO SUGGEST THAT THE PROPERTY IN QUESTION WAS A STOCK- IN-TRADE IN THE HANDS OF THE ERSTWHILE PARTNERSHIP FIRM. EVEN OTHERWISE, THE LD. REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE BUSINESS ASSET SO H ELD BY A CONCERN CANNOT BE STRAIGHTWAY TREATED AS STOCK-IN-TRADE AND FOR THA T MATTER REFERRED TO THE RATIO OF THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT I N THE CASE OF H.MOHAMMED & CO. VS. CIT, 107 ITR 637 (GUJ). IT WAS ASSERTED THAT THERE IS NOTHING TO SUGGEST THAT THE LAND WAS A STOCK-IN-TRADE IN THE HANDS OF THE ERSTWHILE PARTNERSHIP FIRM AND SO FAR AS THE ASSESSEE IS CONC ERNED, HE HAS NOT UNDERTAKEN ANY BUSINESS ACTIVITY UPON SUCH LAND AND , THEREFORE, IT WAS TO BE TAKEN A CAPITAL ASSET IN THE HANDS OF THE ASSESSE E, THEREBY REQUIRING THE ASSESSMENT OF PROFIT ON SALE OF SUCH PROPERTY UNDER THE HEAD CAPITAL GAIN. 5.1 ON THIS ASPECT, THE LD. DEPARTMENTAL REPRESENTA TIVE HAS MERELY REITERATED THE STAND OF THE CIT(A), WHICH IS TO EFF ECT THAT THE PROPERTY IN QUESTION COULD NOT BE STRAIGHTWAY CONSIDERED AS A CAPITAL ASSET WITHOUT ESTABLISHING THAT IT WAS NOT HELD AS STOCK-IN-TRA DE BY THE ERSTWHILE PARTNERSHIP FIRM. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE ORDER OF THE CIT(A) AND THE OTHER MATERIAL ON RECORD SHOWS THAT DURING THE YEAR UNDER CONSIDERATION ASSESSEE HAS SOLD A PLOT OF LAND ADME ASURING 966.40 SQ.MTS. FOR A CONSIDERATION OF RS.3,75,00,000/-. THE SUBMISSIONS AND MATERIAL LED BY THE ASSESSEE BEFORE THE CIT(A), COPIES OF WHICH HAVE BEEN PLACED IN THE PAPER BOOK BEFORE US, ALSO REVEAL THAT THE PLOT OF LAND S OLD DURING THE YEAR WAS A PART 5 ITA NO. 5414/MUM/2015 (ASSESSMENT YEAR 2010-11) OF THE FOUR PLOTS, WHICH ADMEASURED IN TOTAL 4648.7 0 SQ.MTRS. IT IS FACTUALLY EMERGING THAT THE FOUR PLOTS ADMEASURING 4648.70 SQ .MTRS DEVOLVED ON THE ASSESSEE AFTER THE DEATH OF HIS FATHER IN FEBRUARY, 1987 AS A CONSEQUENCE OF THE AUTOMATIC DISSOLUTION OF THE PARTNERSHIP FIRM M /S. RAM & CO., IN WHICH HIS FATHER WAS A PARTNER. TO FURTHER STRAIGHTEN THE RE CORD, IT IS NOTED THAT THE SHARE OF ASSESSEES FATHER DEVOLVED ON HIS WIFE, TW O SONS AND FOUR DAUGHTERS, AND IT WAS ONLY BY WAY OF DEED OF RELEASE REGIS TERED ON 16/1/2008, THAT ASSESSEE OBTAINED COMPLETE OWNERSHIP OF THE PLOT OF LAND FROM THE OTHER CO- INHERITORS. BE THAT AS IT MAY, THE QUESTION FOR CO NSIDERATION IS AS TO WHAT IS THE NATURE OF THE ASSET IN THE HANDS OF THE ASSESSEE WHETHER IT IS A CAPITAL ASSET OR STOCK-IN-TRADE. THE EXPRESSION CAPITAL ASSET HAS BEEN DEFINED IN SECTION 2(14) OF THE ACT; AND, SHORN OF OTHER DETAILS, SO FAR AS IT IS RELEVANT FOR OUR PURPOSE, THE DEFINITION PRESCRIBES THAT A CAPITAL A SSET MEANS PROPERTY OF ANY KIND HELD BY AN ASSESSEE BUT DOES NOT INCLUDE ST OCK-IN-TRADE HELD FOR THE PURPOSES OF HIS BUSINESS OR PROFESSION . THEREFORE, WHAT IS REQUIRED TO BE ESTABLISHED IN THE INSTANT CASE IS WHETHER TH E PLOT OF LAND SOLD WAS HELD BY THE ASSESSEE FOR THE PURPOSES OF HIS BUSINESS OR P ROFESSION. WE HAVE PERUSED THE COMPUTATION OF TOTAL INCOME FOR THE YEAR UNDE R CONSIDERATION AND FIND THAT NEITHER THE ASSESSEE HAS DECLARED INCOME F ROM ANY BUSINESS AND NOR ANY INCOME UNDER THE HEAD BUSINESS HAS BEEN DETER MINED BY THE ASSESSING OFFICER. EVEN AT THE LEVEL OF CIT(A), WE FIND THAT THERE IS NO MATERIAL TO SUGGEST THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF DEALING IN LANDS AND FOR THE MATTER WE FIND THAT THE SOURCES OF INCOME DETAILED IN TH E RETURN OF INCOME ARE ON ACCOUNT OF SALARIES, CAPITAL GAIN AND INCOME FROM O THER SOURCES. 6.1 THE BASIS FOR THE CIT(A) TO TREAT THE IMPUGNED PLOT OF LAND AS STOCK-IN- TRADE IS THE FACT THAT THE PROPERTY DEVOLVED TO TH E ASSESSEE FROM THE 6 ITA NO. 5414/MUM/2015 (ASSESSMENT YEAR 2010-11) ERSTWHILE PARTNERSHIP FIRM, WHERE ASSESSEES FATHE R WAS A PARTNER. AS PER THE CIT(A), THE PROPERTY WAS ACQUIRED BY THE PARTNERSHI P FIRM IN 1972 AND ASSESSEES FATHER DIED IN FEBRUARY, 1987. AS PER THE CIT(A), THE FINAL ACCOUNTS OF THE ERSTWHILE PARTNERSHIP FIRM WERE NOT AVAILABL E FOR EXAMINATION, THEREFORE, THE MANNER IN WHICH THE IMPUGNED PLOT OF LAND WAS ACCOUNTED FOR I.E. WHETHER AS CAPITAL ASSET OR NOT, COULD NOT BE VERIFIED. FOR THE SAID REASON, HE PROCEEDED TO PRESUME THAT THE LAND WAS HELD BY T HE ERSTWHILE PARTNERSHIP FIRM AS A BUSINESS ASSET FOR THE PURPOSE OF ITS BUSINESS . AS PER THE CIT(A), THE ONUS TO ESTABLISH THE CHARACTER OF A LAND IS ON THE ASSESSEE , WHICH ACCORDING TO HIM WAS NOT DISCHARGED BY THE ASSESSEE. WE HAVE CAREFULLY CONSIDERED THE AFORESAID PRESUMPTION BY THE CIT(A) AND FIND IT WHO LLY UNTENABLE. FIRSTLY, EVEN IF IT IS ASSUMED THAT THE IMPUGNED PLOT OF LAND WAS A STOCK-IN-TRADE IN THE BOOKS OF ACCOUNT OF THE ERSTWHILE PARTNERSHIP FIRM, YET THAT BY ITSELF IS NOT CONCLUSIVE TO TREAT IT AS STOCK-IN-TRADE IN THE HA NDS OF THE ASSESSEE. OSTENSIBLY, IT IS ANYBODYS CASE THAT UPON DISSOLUT ION OF THE ERSTWHILE PARTNERSHIP FIRM, ITS BUSINESS DEVOLVED ON TO THE ASSESSEE, THE FACT IS THAT ONLY THE LAND DEVOLVED TO THE ASSESSEE. SO FAR AS ASSESSEE IS CONCERNED, THERE IS NOTHING TO ESTABLISH THAT THE SAME HAS BEE N HELD BY HIM FOR THE PURPOSE OF HIS BUSINESS SO AS TO BE CONSTRUED AS ST OCK-IN-TRADE. IN FACT, AT THE TIME OF HEARING, THE LD.REPRESENTATIVE FOR THE ASSE SSEE EXPLAINED THAT ONLY ONE PLOT ADMEASURING 966.40 SQ.FT. OUT OF THE FOUR PLO TS OF LAND TOTALLING TO 4648.70 SQ.MTS., HAS BEEN SOLD IN THIS YEAR. IT HA S BEEN EXPLAINED THAT THE OTHER THREE PLOTS WERE SOLD BY THE ASSESSEE IN A SSESSMENT YEAR 2008-09 FOR A TOTAL CONSIDERATION OF RS.4,07,76,687/- AND THE GA IN ARISING THERE-FROM WAS DECLARED AS CAPITAL GAIN AND THE SAME HAS ALSO BEEN ACCEPTED BY THE ASSESSING OFFICER WHILE FRAMING AN ASSESSMENT UNDER SECTION 143(3) OF THE ACT DATED 7 ITA NO. 5414/MUM/2015 (ASSESSMENT YEAR 2010-11) 30/11/2009. IN THIS CONTEXT OUR ATTENTION HAS BEEN DRAWN TO PAGES 66 -76 OF THE PAPER BOOK, WHEREIN ARE PLACED THE COMPUTATION OF TOTAL INCOME, COPY OF THE INCOME TAX RETURN FILED AND THE ASSESSMENT ORDE R PASSED BY THE ASSESSING OFFICER FOR ASSESSMENT YEAR 2008-09. AT PAGES 77 TO 107 OF THE PAPER BOOK ARE ALSO PLACED SALE AGREEMENTS EVIDENCING SALE OF OTHER THREE PLOTS OF LAND IN ASSESSMENT YEAR 2008-09. THUS IN ASSESSMENT YEA R 2008-09 THE LAND DEVOLVED ON THE ASSESSEE FROM HIS FATHER HAS ALREAD Y BEEN ACCEPTED AS A CAPITAL ASSET. THE ENTIRE CONSPECTUS OF FACTS O N RECORD ALSO BRING OUT THAT THERE IS NOTHING TO SUGGEST THAT ASSESSEE HAS UND ERTAKEN ANY BUSINESS ACTIVITY VIS--VIS THE IMPUGNED PLOT OF LAND, SO AS TO CONST RUE THE PROFIT ON ITS SALE AS BUSINESS INCOME. THEREFORE, IN OUR CONSIDERED VI EW, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE THERE IS NO JUS TIFICATION TO TREAT THE PLOT OF LAND IN QUESTION AS STOCK-IN-TRADE AND THAT THE ASSESSEE WAS JUSTIFIED IN TREATING THE GAIN ON SALE OF THE PLOT TO BE ASSESSA BLE UNDER THE HEAD CAPITAL GAIN. THUS, ON THIS ASPECT ASSESSEE SUCCEEDS. 7. THE OTHER DISPUTE IN THIS APPEAL IS WITH REGARD TO THE DECISION OF THE CIT(A) IN DENYING THE DEDUCTION OF RS.74,23,333/- BEING EXPENSES CLAIMED TO HAVE BEEN INCURRED AS COST OF IMPROVEMENT OF THE PR OPERTY SOLD. IN THIS CONTEXT, RELEVANT DISCUSSION IS CONTAINED IN PARAS 4.3.5 TO 4.3.7 OF THE ORDER OF THE CIT(A). WE HAVE PERUSED THE SAME AND FIND TH AT THE CLAIM OF THE ASSESSEE WAS THAT AN EXPENDITURE OF RS.74,23,333/- WAS INCU RRED ON LEVELLING AND CONSTRUCTION OF BOUNDARY WALL ON THE PLOT OF LAND. IN SUPPORT OF THE EXPENDITURE, ASSESSEE FURNISHED BILLS/INVOICES RAIS ED BY MR. NELSON A. DCRUZ PROPRIETOR OF M/S.DCRUZ SONS & DEVELOPERS. A CONF IRMATION FROM THE SAID CONCERN WAS ALSO FILED BEFORE THE CIT(A). THE CI T(A) HAS CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER, WHOSE COMMENTS H AVE BEEN REPRODUCED BY 8 ITA NO. 5414/MUM/2015 (ASSESSMENT YEAR 2010-11) HIM PARA 4.3.5 OF HIS ORDER. PERTINENTLY, AS PER T HE REPORT OF THE ASSESSING OFFICER, THE EXAMINATION OF THE RETURN OF INCOME O F MR. NELSON A. DCRUZ DOWNLOADED FROM THE SYSTEM SHOWED TOTAL CREDITS T O THE P&L ACCOUNT OF RS.62,83,943/- AND, THEREFORE, AS PER THE ASSESSING OFFICER THE COST OF LAND DEVELOPMENT OF RS.74,23,333/- CLAIMED TO HAVE BEEN PAID BY THE ASSESSEE TO THE SAID DEVELOPER WAS NOT ESTABLISHED. THE CIT(A) HAS CONCURRED WITH THE SAID STAND OF THE ASSESSING OFFICER. THE CIT(A) AL SO EXAMINED THE BILLS ISSUED BY THE SAID CONCERN AND HE WAS NOT SATISFIED WITH THE DETAILING OF THE WORK DONE THEREIN. HE ALSO NOTICED THAT NO TAX WAS DEDUCTE D AT SOURCE BY THE ASSESSEE. THE CIT(A) ALSO DOUBTED THE EXPENDITURE ON THE GROU ND THAT ASSESSEE WAS A DIRECTOR IN AN INFRASTRUCTURE COMPANY AND THEREFORE , HE COULD HAVE UTILIZED THE SERVICES OF THE SAID COMPANY INSTEAD OF HIRING A CO NTRACTOR. FOR ALL THE SAID REASONS, THE CIT(A) HELD THAT THE CLAIM FOR INCURRE NCE OF EXPENDITURE OF RS.74,23,333/- AS COST OF IMPROVEMENT WAS NOT SUBST ANTIATED AND, THEREFORE, HE DENIED THE CLAIM OF DEDUCTION. 8. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESS EE POINTED OUT THAT THE DISCREPANCY NOTED BY THE ASSESSING OFFICER IN THE REMAND REPORT WAS ADEQUATELY EXPLAINED BEFORE THE CIT(A). IT IS EXPL AINED THAT DURING THE YEAR UNDER CONSIDERATION, ASSESSEE HAD PAID ONLY AN AMOU NT OF RS.30,00,000/- TO MR. NELSON A. DCRUZ AND, THEREFORE, THE CLAIM OF T HE ASSESSING OFFICER THAT THE GROSS RECEIPTS REPORTED BY MR. NELSON A. DCRUZ D ID NOT INCLUDE THE PAYMENT MADE BY THE ASSESSEE IS WRONG. IT WAS POINTED OUT THAT THERE IS NO REQUIREMENT ON THE PART OF THE ASSESSEE TO DEDUCT T DS ON THE PAYMENT MADE TO MR. NELSON A. DCRUZ. IT HAS BEEN EXPLAINED TH AT FOR SUCH REASON THE NAME OF THE ASSESSEE WAS ALSO NOT APPEARING IN THE DETAI LS OF TDS AS DOWNLOADED FROM THE SYSTEM. IN ANY CASE, THE LD.REPRESENTATIV E FOR THE ASSESSEE POINTED 9 ITA NO. 5414/MUM/2015 (ASSESSMENT YEAR 2010-11) OUT THAT A CONFIRMATION FROM THE SAID PARTY WAS FIL ED BEFORE THE CIT(A) AND THERE WAS NO REPUDIATION TO THE SAME. 9. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE HAS RELIED UPON THE ORDER OF THE CIT(A), WHICH WE HAVE ALREADY DETA ILED ABOVE, THEREFORE, THE SAME IS NOT BEING REPEATED FOR THE SAKE OF BREVIT Y. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. IN THIS CASE, COST OF IMPROVEMENT IS CLAIMED BY THE ASSESSEE ON ACCOUNT O F EXPENDITURE INCURRED ON LEVELING OF LAND AND CONSTRUCTION OF BOUNDARY WA LL. THE ASSESSEE FURNISHED THE DETAILS OF THE CONTRACTOR, WHO HAS UNDERTAKEN T HE WORK AND IN SUPPORT, THE BILLS RAISED ON THE ASSESSEE WERE FURNISHED. THE T OTAL CLAIM WAS MADE FOR RS.74,23,333/-, OUT OF WHICH RS.30,00,000/- IS SAID TO HAVE BEEN ACTUALLY PAID DURING THE PERIOD UNDER CONSIDERATION. IN THIS CON TEXT, WE HAVE CAREFULLY PERUSED THE POINTS BROUGHT OUT BY THE CIT(A) AND FI ND THAT THE SAME ARE QUITE POTENT. UNDOUBTEDLY, FOR A CLAIM TO BE ADMISSIBL E, THE SAME IS REQUIRED TO BE VERIFIED AND FOR THAT MATTER THE ONUS IS ON THE ASS ESSEE TO PRODUCE NECESSARY EVIDENCE TO JUSTIFY THE INCURRENCE OF THE IMPUGNED EXPENDITURE, ESPECIALLY CONSIDERING THE FACT THAT IN THE INSTANT YEAR COMPL ETE PAYMENT FOR THE EXPENDITURE HAS NOT BEEN MADE. THE REMAND REPORT O F THE ASSESSING OFFICER, WHICH HAS BEEN REPRODUCED BY THE CIT(A) ALSO BRINGS OUT THAT THE ATTEMPT TO ISSUE SUMMONS TO THE PARTY DID NOT FRUCTIFY AS MR. NELSON A. DCRUZ WAS NOT AVAILABLE AT THE GIVEN ADDRESS. CONSIDERING THE EN TIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE, IN OUR VIEW, IT WOULD BE IN THE FITNESS OF THING THAT THIS ASPECT IS REQUIRED TO BE EXAMINED BY THE ASSES SING OFFICER AFRESH AND FOR THAT MATTER THE ONUS SHALL BE ON THE ASSESSEE TO J USTIFY THE INCURRENCE OF THE IMPUGNED EXPENDITURE ON LEVELLING AND CONSTRUCTI ON OF BOUNDARY WALL ON THE 10 ITA NO. 5414/MUM/2015 (ASSESSMENT YEAR 2010-11) LAND IN QUESTION. THEREFORE, WE SET-ASIDE THE ORDE R OF THE CIT(A) AND REMAND THE MATTER TO THE FILE OF ASSESSING OFFICER FOR A D ECISION AFRESH ON THE LIMITED ASPECT OF DEDUCTION OF RS.74,23,333/- AS COST OF IM PROVEMENT OF THE PROPERTY SOLD. NEEDLESS TO MENTION, THE ASSESSING OFFICER SHALL ALLOW THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD BEFORE PASSIN G AN ORDER AFRESH AS PER LAW. 11. RESULTANTLY, WE DIRECT THE ASSESSING OFFICER TO COMPUTE THE INCOME UNDER THE HEAD CAPITAL GAINS IN VIEW OF OUR AFORE SAID DIRECTIONS. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 28/02/2018. SD/- SD/- (SANDEEP GOSAIN) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 28/02/2018 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI