ITAT Refuses Improvement Cost in the Absence of Bills, Vouchers & Funds

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) does not permit the cost of improvement since the taxpayer failed to build supporting bills, vouchers, sources of funds, and others.

In a two-member bench of Sandeep Singh Karhail (Judicial Member) and Om Prakash Kant (Accountant Member), the taxpayer’s claim was refused via lower heads as there was no evidence for the rectification of the cost which the taxpayer claimed.

The taxpayer, being an individual, expired on June 13, 2019. The taxpayer’s legal heir furnished the revised Form no.36, duly introducing himself as a “Legal Heir” of the taxpayer. For the assessment proceedings, the taxpayer was sought to provide evidence with respect to the cost of the improvement claim of Rs.81,775, with supporting bills, date of incurring such expenditure, source of funds, and others. But there was no information of the e Assessing Officer, vide order passed under section 143(3), disallowed the cost of improvement claimed via the taxpayer.

The taxpayer mentioned that the same was brought a piece of land where no construction is being there in 1996 and made the expenditure for the same at AC shield Power Loom Gala. the taxpayer concerning about some pics of the construction site that form part of the paper book.

Read Also: Easy Guide to Read & Check Income Tax Intimation U/S 143(1)

The Tribunal sees that besides showing some pictures of the construction site the taxpayer does not yield any bills, vouchers, sources of funds, and others to claim the same on the basis of the cost of the improvement.

The Income Tax Appellate Tribunal (ITAT) did not find any infirmity in the lower authorities’ orders rejecting the claim of the taxpayers.

Case Title	Late Smt. Bhanuben Dhanji Shah Versus Dy. Commissioner of Income Tax Range–23(2), Mumbai
Citation	ITA No.7711/Mum./2019
Date	30.09.2022
Counsel For Appellant	Vishal Shah
Counsel For Respondent	Smita Nair
Mumbai ITAT	Read Order