Disallowance of land filling expenses right as except contractor bills no evidence produced

Disallowance towards land filling expenses was right as except contractor bills no other evidence was produced – ITAT

In a recent judgment, ITAT has confirmed the disallowance towards land filling expenses as except contractor bills no other evidence was produced showing how the property was made beneficial with land filling exercise.

ABCAUS Case Law Citation:
ABCAUS 3898 (2024) (03) ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) in confirming the disallowance made by the Assessing Officer (AO) us/ 48 of the Income Tax Act, 1961 (the Act) towards land filling expenses.

The asssessment in this case was completed us/ 147/144 of the Act. The AO had made several additions including disallowance towards land filling expenses.

The assessee had claimed exemption towards sale of agricultural land. The assessee had claimed the land to be situated at more than ten kms. away from headquarter of Municipal Corporation.

However, the AO disbelieved the certificate issued by the Tehsildar being ambiguous and the sale was considered to be a short term capital gain. The Tribunal confirmed the addition which was one of the additions challenged in the instant appeal.

The Tribunal observed the addition was made on the basis that AO had disallowed the expenses claimed as cost of acquisition under section 48 for land filling etc. The order of authorities below showed that the expenditure denied was of the nature of soil filling and boundary wall as cost of improvement of the property sold.

The Tribunal opined that the burden was on the assessee to establish that the expenses claimed towards land filling were genuine and except for filing bills of a contractor, there was no other evidence that how the property was made beneficial with this land filling exercise. The Tribunal opined that tax authorities below had rightly disallowed the expenditure.

Accordingly, the ground of appeal was dismissed.

Download Full Judgment Click Here >>

• ITAT allows exemption of Rs. 25 lakhs u/s 10(10A) to non-government employees
• PCIT has revisionary jurisdiction u/s 263 over the cases passed by the NFAC or the JAO
• Appellate court interfering with MACT finding must undertake reappreciation of evidence
• When delay is not huge & involves huge monetary liability, lenient approach to be taken
• EoGM of company can not ratify diversion of fund raised by preferential issue – SC