ITAT Mumbai reserves decision on house improvement deduction claim

In Vivek Juneja v. Revenue, the assessee sought to deduct Rs 40.44 lakh spent on improving a newly acquired residential property from his long-term capital gains for AY 2013-14. The assessing officer allowed only Rs 20 lakh on an ad hoc basis, disallowing the balance Rs 20.44 lakh after deeming items such as air conditioning, furniture and fittings non-essential for habitability. The First Appellate Authority upheld this partial disallowance despite the assessee’s claim that all expenses were for civil and electrical work to make the house habitable.

Before the Income Tax Appellate Tribunal (F Bench), the assessee argued that detailed invoices substantiated the full claim and that the adhoc truncation lacked a rational basis. The Departmental Representative maintained that the evidence was insufficient. The Tribunal has considered the submissions, but has left the substantive merits of the allowance pending further hearing.