ASST CIT 24(3), MUMBAI V. SRIDHAR VELLALA, MUMBAI

ITA 1031/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9545 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 14-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Keywords: Cost of acquisition; Fair market value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 1031/MUM/2017 (ASSESSMENT YEAR 2012-13) ASSTT. COMMISSIONER OF INCOME TAX 34(3), ROOM NO.205, 2 ND FLOOR, C-12, BKC, BANDRA (E), MUMBAI 400 050 ...... APPELLANT VS. SHRI SRIDHAR VELLALA, BUNGLOW NO.37, PALI VILAGE, 16 TH ROAD, BANDRA (W) MUMBAI 400 050. PAN: AFYPV 9267R .... RESPONDENT APPELLANT BY : SHRI RAM TIWARI RESPONDENT BY : NONE DATE OF HEARING : 22/08/2017 DATE OF PRONOUNCEMENT : 15/09/2017 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEAL FILED BY THE REVENUE PERTAIN ING TO ASSESSMENT YEAR 2012-13 IS DIRECTED AGAINST AN ORD ER PASSED BY CIT(A)- 46 MUMBAI DATED 21/11/2016, WHICH IN TURN ARISES OU T OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143 (3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 27/03/2015 . 2 ITA NO. 1031/MUM/2017 (ASSESSMENT YEAR 2012-13) 2. IN THIS APPEAL, REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- (I) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN ALLOWING THE BENEFIT OF INDE XATION FROM 1981 AS AGAINST THE YEAR 2012 FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAIN. (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) HAS ERRED IN RELYING ON THE BOMBAY HIGH C OURT DECISION IN THE CASE OF MANJULA J. SHAH, IN DOING SO, THE LD.CI T(A) HAS NOT APPRECIATED THAT THE DEPARTMENT AND SLP HAS BEEN FI LED AGAINST THE DECISION OF THE HON'BLE HIGH COURT. THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IS UNDER EXAMINATION BY THE APEX COURT IN THIS CASE AS SUCH THE ISSUE OF TAXABILITY OF CAPITAL GAI N HAS NOT REACHED TO ITS FINALITY.' 3. AT THE TIME OF HEARING, IT WAS NOTED THAT NONE APPEARED ON BEHALF OF THE ASSESSEE NOR HAS ANY APPLICATION FOR ADJOURNMENT PLACED BEFORE US INSPITE OF NOTICE OF HEARING BEING SERV ED UPON THE ASSESSEE. THEREFORE, WE PROCEED TO DISPOSE-OFF THE APPEAL EX- PARTE QUA THE RESPONDENT ASSESSEE AFTER HEARING THE LD. DEPARTMEN TAL REPRESENTATIVE ON MERITS IN TERMS OF RULE -25 OF INCOME TAX (APPEL LATE TRIBUNAL) RULES, 1963. 4. THE RELEVANT FACTS ARE THAT THE ASSESSEE IS AN I NDIVIDUAL, WHO INHERITED A PROPERTY TO THE EXTENT OF 1/5 TH FROM HIS PARENTS AND VIDE A SETTLEMENT AGREEMENT DATED 31/05/2011 WITH HIS FOUR SISTERS, THE REMAINING 4/5 TH SHARE OF THE PROPERTY ALSO CAME TO THE ASSESSEE. THE PROPERTY WAS SOLD DURING THE YEAR FOR A TOTAL CONSI DERATION OF RS.2,68,00,000/- AND ACCORDINGLY, THE ASSESSEE RETU RNED THE LONG TERM CAPITAL GAIN AT RS.2,57,36,750/-. THE ASSESSING OFFICER COMPUTED THE CAPITAL GAIN AT RS.3,35,80,000/-. THE DIFFERENCE B ETWEEN THE ASSESSING 3 ITA NO. 1031/MUM/2017 (ASSESSMENT YEAR 2012-13) OFFICER AND THE ASSESSEE WAS IN RELATION TO THE BEN EFIT OF INDEXATION AVAILABLE ON THE COST OF ACQUISITION. NOTABLY, THE ASSESSEE CONSIDERED THE COST OF ACQUISITION AND INDEXATION FACTOR AS ON 01/04/1981 SINCE THE PROPERTY WAS ACQUIRED BY HIS FATHER IN 1974. THE A SSESSING OFFICER ADOPTED THE FAIR MARKET VALUE AS ON 01/04/1981 AS T HE COST OF ACQUISITION BUT DIFFERED WITH THE ASSESSEE ON THE A LLOWABILITY OF INDEXATION BENEFIT. THE ASSESSING OFFICER GRANTED THE BENEFIT OF INDEXATION FROM THE YEAR 2011, WHEN ASSESSEE ACTUAL LY ACQUIRED THE PROPERTY IN HIS NAME. THE CIT(A) HAS UPHELD THE ST AND OF THE ASSESSEE BY FOLLOWING THE JUDGMENT OF THE HON'BLE BOMBAY HIG H COURT IN THE CASE OF CIT VS. MANJULA J. SHAH, 355 ITR 474 (BOM). AGAINST SUCH A DECISION, REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. FROM THE ORDERS OF AUTHORITIES BELOW, IT IS QUIT E CLEAR THAT ASSESSEE ACQUIRED THE RIGHTS IN THE PROPERTY ON INH ERITANCE AND SETTLEMENT WITH THE OTHER FAMILY MEMBERS AND, HENCE , THE PERIOD OF HOLDING OF THE PREVIOUS HOLDERS IS TO BE INCLUDED W HILE ALLOWING THE BENEFIT OF INDEXATION. THEREFORE, IN OUR VIEW, THE CIT(A) MADE NO MISTAKE IN APPLYING THE RATIO OF THE JUDGMENT OF TH E HON'BLE BOMBAY HIGH COURT IN THE CASE OF MANJULA J. SHAH(SUPRA) AN D ALLOWING THE INDEXATION BENEFIT W.E.F. 01/04/1981. EVEN IN THE GROUNDS OF APPEAL RAISED, THE REVENUE DOES NOT DISPUTE THE FACT THA T THE ISSUE IS COVERED BY THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF MANJULA J. SHAH(SUPRA),BUT THE ONLY POINT RAISED I S THAT AN SLP HAS BEEN FILED BY THE DEPARTMENT AGAINST THE DECISION OF TH E HON'BLE BOMBAY HIGH COURT IN THE HONBLE SUPREME COURT. BE THAT A S IT MAY, THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CA SE OF MANJULA J. 4 ITA NO. 1031/MUM/2017 (ASSESSMENT YEAR 2012-13) SHAH(SUPRA) CONTINUES TO SUBSIST AND IN VIEW THER EOF, WE FIND NO REASON TO INTERFERE WITH THE DECISION OF THE CIT(A) , THEREFORE, THE SAME IS HEREBY AFFIRMED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 15/09/2017. SD/- SD/- (PAWAN SINGH) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 15/09/2017 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI 5 ITA NO. 1031/MUM/2017 (ASSESSMENT YEAR 2012-13) DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 07/09/2017 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 07/09/2017 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/A M 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER