The case ITA 721/DEL/2020 and its cross appeal ITA 816/DEL/2020 involve the ACIT and Santosh Suri, engaging in a legal dispute over the assessment year 2016-17. These appeals focus particularly on the cost of improvement and indexation of assets which have been inherited.
The dispute began with the CIT(A) deciding on new evidence without the Assessing Officer’s input, leading to disagreements about the validity of improvements claimed on an inherited property. The ACIT challenged the acceptance of fresh evidence and the subsequent allowance of claims without proper documentation.
The Revenue’s appeal contested the CIT(A)’s decision to accept new evidence on the cost of improvements allegedly made to the property. The Assessee, on the other hand, argued against the indexation method used for calculating capital gains, insisting that the original acquisition date of the previous owner should be considered for indexation purposes.
The tribunal directed a de novo investigation by the Assessing Officer into the cost of improvements and confirmed the Assessee’s stance on indexation, referencing precedent cases. The decision thus partially favored both parties, with a directive for further verification and an acknowledgment of the Assessee’s approach to indexation.
This case illustrates the complexities involved in handling inherited properties and the associated tax implications, especially regarding improvements and their verification. It highlights the necessity for clear documentation and adherence to legal precedents in tax assessments.
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