The ACIT, Circle-2, Bhavnagar V. Vasuben T.Parekh, Bhavnagar

ITA 1409/AHD/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5989 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 01-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 27-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADEEP KUMAR MAJUMDAR
• Keywords: Capital asset
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA NO. 1409/AHD/2012 (ASSESSMENT YEAR:2009-10) ACIT, CIRCLE-12, BHAVNAGAR APPELLANT VS. VASUBEN T. PAREKH C/O PAREKH CLINIC, DIWANPARA ROAD, BHAVNAGAR, PIN : 364001 RESPONDENT PAN: ACYPP1645A /BY REVENUE : SHRI PRADEEP KUMAR MAJUMDAR, SR. D.R. /BY ASSESSEE : NONE /DATE OF HEARING : 01.05.2017 /DATE OF PRONOUNCEMENT : 03.05.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2009-10 E MANATES FROM THE CIT(A)-XX, AHMEDABADS ORDER DATED 27.04.2012, IN A PPEAL NO. CIT(A)- ITA NO. 1409/AHD/2012 ( ACIT VS. VASUBEN T. PAREKH) A.Y. 2009-10 - 2 - XX/448/11-12, IN PROCEEDINGS U/S. 143(3) OF THE IN COME TAX ACT, 1961, IN SHORT THE ACT. CASE CALLED TWICE. NONE APPEARS AT ASSESSEES BEHE ST. THE CASE FILE INDICATES THAT THE REGISTRY HAS ALREADY ISSUED NECE SSARY RPAD NOTICE TO HER. WE THUS PROCEED EX PARTE AGAINST ASSESSEE IN DECIDI NG THE INSTANT MAIN APPEAL. 2. THE REVENUE RAISES THE FOLLOWING SUBSTANTIVE GRO UNDS IN ITS INSTANT APPEAL: 1. THE LD.CIT(A)-XX, AHMEDABAD HAS ERRED IN LAW AN D ON FATS IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON TREATING THE PROFIT ARISING FROM THE SALE OF A HOUSE PROPERTY AS SHORT TERM CAPITAL GAIN. 1.2 THE LD.CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT PROPERTY UNDER REFERENCE WAS SOLD IN OCTOBER, 2008 AND 20% OF ITS SHARE WAS TRANSFERRED TO THE ASSESSEE IN FEBRUARY, 2008 HENCE, THE PROFIT THEREF ROM COULD NOT BE TREATED AS LONG TERM CAPITAL GAIN. 3. LEARNED DEPARTMENTAL REPRESENTATIVE STATES AT TH E OUTSET THAT THE MAIN DISPUTE BETWEEN THE PARTIES IS ABOUT TREATMENT TO B E GIVEN TO 20% OF SHARE OF RELEVANT CAPITAL ASSET SOLD IN THE RELEVANT PREVIOU S YEAR. HE REFERS TO ASSESSMENT ORDER DATED 30.12.2011 INDICATING THAT T HE ASSESSEE HAD INHERITED THE ABOVE 20% SHARE IN THE SAID RESIDENTIAL HOUSE/C APITAL ASSET. WE SOUGHT TO KNOW THE ORIGINAL OWNER OF THIS HOUSE IN LIEU OF PA YMENT OF CONSIDERATION. SHRI MAJMUDAR STATES VERY FAIRLY THAT THE ASSESSEE S FATHER SHRI TRAMBAKLAL PAREKH HAD PURCHASED THIS HOUSE. HE EXPIRED IN 196 0 LEAVING BEHIND TWO DAUGHTERS (INCLUDING ASSESSEE) AND SONS YOUNGER TO THEM. ALL OF THEM BECAME CO-OWNERS TO THE EXTENT OF 20% SHARE. THE A SSESSEES UNMARRIED ELDER SISTER MS. BHANUBEN T. PAREKH DIED IN THE YEA R 2008. HER 20% SHARE THEREAFTER DEVOLVED UPON THE ASSESSEE ON NO OTHER C LAIM OF INHERITANCE BEING RAISED BY THE OTHER SIBLINGS. THE ASSESSEE THEN SO LD THE IMPUGNED CAPITAL ITA NO. 1409/AHD/2012 ( ACIT VS. VASUBEN T. PAREKH) A.Y. 2009-10 - 3 - ASSET FOR RS.2.37CRORES ALONG WITH THE REMAINING CO -OWNERS. HER SHARE THEREIN CAME TO BE OF RS.95.09LACS. SHE CLAIMED TH E SAME TO BE CAPITAL GAINS. THE ASSESSING OFFICER HOWEVER TREATED HER LATTER 20 % SHARE TO BE SHORT TERM CAPITAL GAINS RESULTING IN THE IMPUGNED ADDITION OF RS.51.49LACS. THE CIT(A) REVERSES THE SAID ACTION. HE TREATS THE LATTER 20% OF THE ASSESSEES SHARE IN CAPITAL ASSET AS LONG TERM GIVING RISE TO IDENTICAL CAPITAL GAINS INSTEAD OF SHORT TERM CAPITAL GAINS. THIS LEAVES THE REVENUE AGGRIE VED. 4. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIV E. CASE FILE PERUSED. SHRI MAJMUDAR STRONGLY SEEKS TO REVIVE TH E ABOVE IMPUGNED ADDITION OF SHORT TERM CAPITAL GAINS. THERE IS NO DISPUTE THAT THE SOLE ISSUE IN THE INSTANT APPEAL REVOLVES AROUND TREATMENT OF ASS ESSEES SHARE INHERITED FROM HER DECEASED SISTER IN THE YEAR 2008 IN THE CA PITAL ASSET IN QUESTION AS TRANSFERRED IN THE IMPUGNED ASSESSMENT YEAR. IT IS EVIDENT THAT THE ASSESSEES FATHER IS ADMITTEDLY THE PREVIOUS OWNER FOR CONSI DERATION U/S. 49(1) EXPLANATION. BOTH THE ASSESSEE AS WELL AS HER SIST ER AND ULTIMATELY THE FORMER HAS ACQUIRED THE SAME TO THE EXTENT OF 40% SHARE TH EREIN BY WAY OF INHERITANCE U/S.49(1)(III)(A). WE COME TO SECTION 2(42A) OF THE ACT DEFINING SHORT TERM CAPITAL ASSET INCLUDING EXPLANATION (1) SPECIFICALLY ENVISAGING THAT IN DETERMINING THE PERIOD FOR WHICH ANY CAPITAL IS HELD BY THE ASSESSEE IN THE CASE OF A CAPITAL ASSET WHICH BECOMES THE PROPERTY OF THE ASSESSEE IN THE CIRCUMSTANCES MENTIONED IN SECTION 49(1), THERE SHA LL BE INCLUDED THE PERIOD FOR WHICH THE ASSET WAS HELD BY THE PREVIOUS OWNER REFERRED TO IN THE SAID SECTION. IT IS THUS CRYSTAL CLEAR THAT ASSESSEES HOLDING PERIOD HAS TO ALSO INCLUDE THE HOLDING PERIOD OF HER PREVIOUS OWNER FO R CONSIDERATION WHO TURNS OUT TO BE HER LATE FATHER. WE THUS CONCLUDE IN THI S FACTUAL AND STATUTORY BACKDROP THAT THE LEARNED CIT(A) HAS RIGHTLY REVERS ED ASSESSING OFFICERS FINDINGS IN TREATING THE ASSESSEES CAPITAL ASSET A S A LONG TERM ONE TO THE ITA NO. 1409/AHD/2012 ( ACIT VS. VASUBEN T. PAREKH) A.Y. 2009-10 - 4 - EXTENT OF HER 20% SHARE IN QUESTION. THE REVENUES ABOVE TWO SUBSTANTIVE GROUNDS ARE ACCORDINGLY REJECTED. 5. THE REVENUES APPEAL IS DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 3 RD DAY OF MAY, 2017.] SD/- SD/- ( PRADIP KUMAR KEDIA ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 03/05/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0