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June 20, 2022

In the absence of evidence, land development expenses are not deductible.

by CA Shivam Jaiswal in Income Tax

In the absence of evidence, land development expenses are not deductible.

Facts and issues of the case

This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)- 5, Pune [‘CIT(A)’ for short] dated 31.05.2016 for the assessment year 2011-12.The appellant is an individual carrying on the business in the name and style of “Rohan Francis Pereria”. The return of income for the assessment year 2011-12 was filed on 31.03.2013 declaring total income of Rs.11,80,070/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-4(5), Pune (‘the Assessing Officer’) vide order dated 14.02.2014 passed u/s 143(3) of the Income Tax Act, 1961 (‘the Act’) at total income of Rs.75,01,807/-. While doing so, the Assessing Officer made addition of Rs.62,21,737/- by disallowing the development charges incurred on sale of land situated at Baner, Pune for want of evidence. The Assessing Officer also made addition on account of unexplained expenditure incurred on foreign travel expenses of Rs.1,00,000/-.

Observation by the court

Being aggrieved by the above disallowances, an appeal was filed before the ld. CIT(A), who vide impugned order confirmed the action of the Assessing Officer as the appellant had failed to substantiate the expenditure incurred on development of land during the period from 1988-89 to 2006-07.Being aggrieved by the above decision of the ld. CIT(A), the appellant is in appeal before us.

When the matter was called on for hearing, none appeared on behalf of the appellant-assessee despite due service of several notices of hearing. Therefore, after hearing the ld. Sr. DR, we proceed to dispose of this matter on merits. The ld. Sr. DR submitted that the ld. CIT(A) had dealt with all the contentions raised by the appellant before him by passing a reasoned order and the said order of the ld. CIT(A) does not require any interference.

Court had heard the ld. Sr. DR and perused the material on record.The issue in the present appeal raised through various grounds of appeal relates to the allowance of expenditure claimed as development expenditure on sale of land situated at Baner, Pune while computing the capital gains on the sale of said land. On careful perusal of the order of the Assessing Officer, it was clear that the claim made for allowance of development expenditure was disallowed for want of evidence in support of the expenditure incurred on development of the said land. Even before the ld. CIT(A), the appellant had not produced any evidence in support of the expenditure incurred on development of land. In the absence of any evidence in support of development of land, the clam cannot be allowed. Therefore, we do not find any merits in the contentions raised by the appellant. Accordingly, the issue raised by the appellant through various grounds of appeal stands dismissed.

Conclusion

The appeal filed by the assessee was dismissed by the court.

Rohan-Pereria-Vs-ITO-ITAT-Pune..

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