Filing of affidavit before officer in support of the claim of cost of improvement can be useful?
Often the taxpayers don’t have the records related to the cost of improvement where it is very old. In such a case, seasoned counsel often files an
affidavit before officer in support of the claim of cost of improvement. Can it be useful in such a case?
Here is an interesting case before Delhi ITAT as under:
Surinder Kaur Sethi Vs ACIT
ITA No. 7246/Del/2019
The issue before delhi ITAT was whether affidavit filed by assessee is only self serving document and no weight can be attached to it in absence of any other material submitted to support claim of cost of improvement?
Let us have a short overview of the case:
Assessee sold one immovable property for Rs. 9,25,00,000/- during the year under consideration which was stated to be acquired/constructed prior to 01.04.1981.
For the purposes of calculation of Long Term Capital Gain, the assessee adopted the cost of acquisition of land and building as per valuation determined by the registered valuer.
The assessee also claimed cost of improvement which was worked out to Rs. 37,65,123 for deduction.
The AO found that the claim towards cost of improvement was not supported by any documentary evidence.
The AO accordingly observed that the cost of improvement claimed with a view to reduce tax liabilities.
The AO thus denied the cost of improvement.
On appeal, the CIT(A) upheld the order of AO. Further aggrieved, the assessee preferred appeal before the Tribunal.
On appeal, the Tribunal on the issued as to whether affidavit filed by assessee is only self serving document and no weight can be attached to it in absence of any other material submitted to support claim of cost of improvement, decided the issue in favour of the department with following observation:
it was admitted that other than affidavit, the assessee does not possess any other direct or indirect supporting evidence.
The only case of the assessee is that the cost of improvement has taken place 35 years back and that too incurred by his brother, and therefore, the assessee is not in a position to corroborate the claim.
The assessee mainly relies upon the doctrine of preponderance.
On perusal of the affidavit, it was noted that the affidavit is vague and non-descript. It is not clear from affidavit as to what is the basis for affirming the contents on oath.
An affidavit should clearly spell out how much is the statement to the deponents knowledge and how much is a statement of his belief based on information and source thereof.
The grounds of belief must be stated with sufficient particularity to enable the court/administrating authority to judge whether it would be safe to act on deponents ‘belief’.
In the instant case, the affidavit filed by the assessee bears only the verification that it has been sworn on oath and contents of the affidavit is correct but without giving source of knowledge or information.
Such bald verification makes the impugned affidavit meaningless and valueless.
The nature and source of knowledge is not found to be disclosed with sufficient particularity rendering it a piece of paper carrying no probative value and thus liable to be rejected.
The affidavit filed by the assessee appears to be only a self serving document and no weight can be attached to such standalone paper in the absence of any other material or corroboration about the improvements carried out to support assertions made in this regard.
The burden of proof lies on the assessee to produce evidence which is rightly considered unsatisfactory and devoid of any factual basis by the lower authorities.
We thus see no reason to interfere with the order of the CIT(A).
In the result, the appeal of the assessee is dismissed.
