Mangalabai Vinayak Supnekar, Pune V. Dy Commissioner of Income-tax, Pune

ITA 1097/PUN/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9698 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 30-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAMESH K GANDHI
• Keywords: Capital asset; Gift; Cost of acquisition

Judgement Text

N THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI R.S. PADVEKAR JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 1097/PN/2011 (ASSTT. YEAR : 2005-06) MANGALABAI VINAYAK SUPNEKAR ... APPELLANT KUMARPURAM BLDG B, FLAT NO. 1101, MUKUNDNAGAR, PUNE 411 037 PAN : AJLPS 5212 J V. DCIT, CIRCLE 2, PUNE RESPONDENT (ASSTT. YEAR : 2007-08) APPELLANT BY : SHRI RAMESH K . GANDHI RESPONDENT BY : SMT. SHAILJA RAI DATE OF HEARING : 03 /9/12 DATE OF PRONOUNCEMENT : 12 - 9- 12 ORDER PER R.S. PADVEKAR, JM IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE IM PUGNED ORDER OF THE LD CIT(A) II, PUNE, DATED 30 TH JUNE 2011 FOR THE A.Y. 2005-06. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING EFFECTIVE GROUNDS : 1. THE DISALLOWANCE OF DEDUCTION OF INDEX COST OF ACQUISITION FOR THE SALE OF RIGHT IN THE PROPERTY IN SUB PLOT NO 4/ 1 AT S.NO.707 FINAL PLOT NO 411 WHICH WAS ACQUIRED BY THE ASSESSEE THRO UGH WILL DATED 21/07/2000 IN THE YESR 2003-04. THE LEARNED A.O. HAS ADOPTED COST INFLECTION INDEX OF THE FINANCIAL YEA R 2003-04 INSTEAD AS OF 01/04/1981 (CLAIMED BY THE ASSESSEE RS. 77,12 ,484/-, TAKEN BY THE A.O. RS. 26,56,127/-). THE ABOVE PLOT OF WA S ACQUIRED IN YEAR 1976 BY THE HUSBAND OF THE ASSESSEE. THE LEAR NED ASSESSING OFFICER ERRED IN ADOPTING THE COST OF INDEXATION FO R THE YEAR OF THE WILL IN PLACE OF THE YEAR IN WHICH THE PREVIOUS O WNER ACQUIRED THE ASSET. 2. THE BRIEFLY STATED FACTS ARE AS UNDER. DURING TH E A.Y. 2005-06, THE ASSESSEE HAS SOLD A PROPERTY AT SURVEY NO.707 OF P LOT NO. 4/1 OF FINAL 2 ITA NO. 1097/PN/2011 MANGALABAI VINAYAK SUPNEKAR A.Y. 2005-06 PLOT NO. 411 TPS III MUKUNDNAGAR, PUNE TO M/S. D & D ASSOCIATE FOR RS.2,05,00,000/-. THE ASSESSEE HAD RECEIVED THE SA ID PROPERTY IN WILL FROM HER HUSBAND ON 30.06.2003. THE ASSESSEE WHILE COMPUTING THE LONG TERM CAPITAL GAIN (LTCG) IN RESPECT OF THE SAL E OF THE SAID PROPERTY ADOPTED COST OF ACQUISITION AS ON 1.4.1981 AND COS T INFLATION INDEX (CII) WAS APPLIED TREATING THE ACQUISITION OF THE SAID PR OPERTY IN THE YEAR 1981- 82. THE ASSESSEE CALCULATED THE INDEX COST OF ACQU ISITION AT RS. 12,84,508/-. THE A.O. WAS OF THE OPINION THAT AS T HE ASSESSEE HAS RECEIVED THE PROPERTY IN THE FINANCIAL YEAR 2003-04 BY WILL, HENCE, IN VIEW OF EXPLANATION (III) OF SEC. 48 OF THE I.T. AC T, THE COST INFLATION INDEX (CII) FOR THE SAID YEAR SHOULD BE ADOPTED FOR WORK ING THE INDEX COST OF ACQUISITION (ICA). THE A.O., ACCORDINGLY, CALCULA TED THE INDEX COST OF ACQUISITION AS WELL AS INDEX COST OF IMPROVEMENT AN D HE WORKED OUT THE LONG TERM CAPITAL GAIN (LTCG). THE ASSESSEE CHALLE NGED THE ACTION OF THE A.O BEFORE THE LD CIT(A), BUT WITHOUT SUCCESS. NOW, THE ASSESSEE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD THE PARTIES. WE FIND THAT THE I SSUE STAND COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE JU RISDICTIONAL HIGH COURT IN THE CASE OF CIT, MUMBAI VS. MANJULA J. SHAH (I.T . APPEAL NO. 3378 OF 2010), JUDGMENT DATED 11 TH OCTOBER, 2011. MOREOVER, THE ITAT, PUNE BENCH HAD CONSIDERED AND DECIDED IDENTICAL ISSUE I N THE CASES OF DY CIT, PUNE VS. SHRI PADEEP V. SUPNEKAR AND OTHERS, ITA NO . 10, 11 AND 12/PN/2011, ORDER DATED 30 TH APRIL 2011. THE OPERATIVE PART OF THE ORDER IS AS UNDER : 3. THE RELEVANT FACTS ARE THAT THE ASSESSEE RESPON DENTS HAD RECEIVED CAPITAL ASSET THROUGH GIFTS/WILL. THE A.O. APPLIED THE COST INFLATION INDEX OF THE YEAR WHEN THE PROPERTY WAS RECEIVED BY THE A SSESSEE BY WAY OF GIFT/WILL. THE ASSESSEES CONTENDED THAT THE PROPER TIES HAVE BEEN RECEIVED BY WAY OF GIFTS/WILL AND THEREFORE, COST INFLATION INDEX HAS TO BE WORKED OUT BY TAKING THE DATE OF ACQUISITION BY THE PREVIO US OWNER. THE A.O DID NOT AGREE AND COMPUTED THE LONG TERM CAPITAL GAIN R ELYING UPON THE EXPLANATION (III) BELOW SEC. 48 OF THE ACT TO HOLD THAT THE COST INFLATION INDEX FOR THE PURPOSE OF WORKING THE INDEXED COST O F ACQUISITION WAS TO BE TAKEN FOR THE YEAR IN WHICH THE ASSESSEES BECAME OW NER OF THE PROPERTY I.E. RECEIVED IN GIFT/WILL. THE LD CIT(A) HAS HOWE VER FOLLOWING THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF DCI T VS. MANJULA J. SHAH (SUPRA) HAS HELD THAT FOR THE PURPOSE OF DETERMINI NG THE INDEXED COST OF ACQUISITION IN RESPECT OF AN ASSET ACQUIRED UNDER A GIFT/WILL THE COST INFLATION INDEX HAS TO BE WORKED OUT BY TAKING THE DATE OF ACQUISITION OF THE PROPERTY BY THE PREVIOUS OWNER. THIS DECISION OF SPECIAL BENCH OF THE TRIBUNAL ON THE ISSUE HAS NOW BEEN UPHELD BY THE H ONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. MANJULA J. SHAH ( SUPRA). 3 ITA NO. 1097/PN/2011 MANGALABAI VINAYAK SUPNEKAR A.Y. 2005-06 4. SINCE THE ISSUE AS DISCUSSED ABOVE IS NOW FULLY COVERED BY THE DECISION OF HONBLE JURISDICTIONAL MUMBAI HIGH COUR T IN THE CASE OF CIT VS. MANJULA J. SHAH (SUPRA), WE DO NOT FIND INFIRMITY I N THE FIRST APPELLATE ORDER IN THIS REGARD IN QUESTION. THE SAME IS UPHE LD. THE GROUNDS INVOLVING THE ISSUE ARE ACCORDINGLY REJECTED. WE, THEREFORE, ALLOW THE GROUND TAKEN BY THE ASSESS EE AND DIRECT THE A.O TO WORK OUT THE COST OF ACQUISITION AND COST OF IMP ROVEMENT BY ADOPTING COST INFLATION INDEX FOR THE FINANCIAL YEAR 1981-82 . 4. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 2 TH SEPTEMBER 2012. SD/- SD/- (R.K. PANDA) ACCOUNTANT MEMBER (R.S.PADVEKAR ) JUDICIAL MEMBER PUNE, DATED THE 12TH SEPTEMBER, 2012 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT- II, PUNE 4. THE CIT(A)-II, PUNE 5. THE D.R. B BENCH, PUNE 6. GUARD FILE /- TRUE COPY-/ BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE