01 February 2010
A person purchased a property in 1985 from a Registered Society and paid 30% cost as down payment and rest 70% cost has been paid in financed from bank payable in 15 years. Now, he sold the property in 2009-10. He has incurred huge amounts on the improvement of this property several times during these 24 years but has not kept these improvement bills with him. Now,
1.How will be the cost of acquisition indexed? Installments paid to bank should be indexed considering which yr as base year? 2. How he will be able to prove his improvement costs to Income tax deptt? 3. Need he submit some documents also while filing his ITR?
Pls keep the query open after ur replies to let other experts also opine over the query. THanks in advance.
01 February 2010
100% cost will be indexed as base year 1985 as the bankers had paid the cost to the society in 1985 (assumed). cost of improvements which are/can be capitalised can be indexed in the year which cost incurred. No need to file documents with ITR.But the AO can demand the documents later on.
But what documents AO can ask for? The assessee has not kept the improvement bills with him.Infact its not possible even to retain all these bills relating to around 20-25 years back. Can AO still demand these documents related to 1985-1990?
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