MR. JAIPRAKASH A. MISHRA, Mumbai V. ITO 22 (1)(4), Mumbai

ITA 1505/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8098 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 12-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Capital asset; Gift; Opportunity of being heard; Cost of acquisition; Set aside; Capital Gains
• Section: 143(3); 250; 208; 48

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 1505/MUM/2019 ASSESSMENT YEAR: 2007-08 MR. JAIPRAKASH A. MISHRA, D/12, SHRI TILAK COMPLEX, DEVIDAS LANE, NEAR SHANTI ASHRAM, BORIVALI (WEST), MUMBAI-400 113. VS. INCOME TAX OFFICER (ERSTWHILE ITO 19(1)(3), MUMBAI) NOW ITO-22(1)(4), PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-400 012. PAN NO. AAHPM 5163 F APPELLANT RESPONDENT ASSESSEE BY : MR. RAJENDRA KUMAR JAIN, AR REVENUE BY : MS. SMITA VERMA, DR DATE OF HEARING : 17/02/2021 DATE OF PRONOUNCEMENT : 30/03/2021 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVA NT ASSESSMENT YEAR IS 2007-08. THE APPEAL IS DIRECTED AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-34, MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3)R.W.S. 254 OF THE IN COME TAX ACT 1961, (THE ACT). MR. JAIPRAKASH A. MISHRA ITA NO. 1505/M/2019 2 2. THE GROUNDS OF APPEAL FILED BY THE ASSESSEE READ AS UNDER : 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS BY NOT HON ORING THE ORDER AND DIRECTION OF HONBLE ITAT AND JUSTIFYING THE CONTEMPT WITH TH E IRRELEVANT ANALOGY THAT ORDER OF THE OTHER INCOME TAX OFFICERS ARE NOT BINDING ON THE AO. 2. THE LD. CIT(A) HAD ERRED IN LAW AND ON FACTS IN NOT TREATING MR. RAMAKANT MISHRA AS JOINT OWNER AND TREATING THE SUBMISSION OF ASSES SEE AS MISREPRESENTATION OF FACTS. 3. THE LD. CIT(A) HAD ERRED IN LAW AND ON FACTS IN TRE ATING THAT THE ORDER OF MR. RAMAKANT MISHRA IS ADMITTED BY THE AO WHILE PASSING THE ORDER AND NOT FOLLOWING THE DIRECTION OF THE HONBLE ITAT IN LETTER AND SPI RIT AND CONFIRMING THE ADDITIONS. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2007-08 ON 16.0 3.2009 DECLARING TOTAL INCOME OF RS.96,410/-. ASSESSMENT U/S 143(3) WAS CO MPLETED BY THE ASSESSING OFFICER (AO) ON 23.12.2009, TAXING LONG TERM CAPITA L GAINS ON SALE OF PROPERTY AT RS.43,71,675/- AS AGAINST THE LONG TERM CAPITAL LOS S OF RS.1,01,169/- CLAIMED BY THE ASSESSEE. AGGRIEVED BY THE SAID ORDER OF THE AO, THE ASSESSE E FILED AN APPEAL BEFORE THE LD. CIT(A). THE APPEAL WAS PARTLY ALLOWED. AGGRIEVED BY THE SAID ORDER OF THE LD. CIT(A), BOT H THE ASSESSEE AND THE REVENUE FILED APPEAL BEFORE THE TRIBUNAL. WE FIND T HAT THE TRIBUNAL VIDE ORDER DATED 20.02.2013 (ITA NO. 126/M/2011 AND CO NO. 208 /M/2012) HELD THAT : 2. AT THE OUTSET, SHRI HRIDAY NARAIN, LD. COUNSEL FOR THE ASSESSEE MENTIONED THAT THE ISSUE IN THESE APPEALS RELATES TO TAXABILITY OF LONG TERM CAPITAL GAINS EARNED ON SALE OF HOUSE PROPERTY JOINTLY OWNED AND SOLD BY SH RI JAIPRAKASH A MISHRA, AND SHRI RAMAKANT R. MISHRA. DURING THE PROCEEDINGS BEFORE U S, THE LEARNED REPRESENTATIVES MR. JAIPRAKASH A. MISHRA ITA NO. 1505/M/2019 3 OF BOTH THE PARTIES MENTIONED THAT THE ISSUE HAS TO BE SET ASIDE TO THE FILES OF THE AO FOR ADJUDICATING THE ISSUE AFRESH CONSIDERING THE D ECISION OF THE AO IN THE CASE OF SHRI RAMAKANT R MISHRA. IN SAID ORDER OF ASSESSMENT , WE FIND THE SAID ASSESSMENT ORDER WAS PASSED PRIOR IN TIME BUT IT IS CLAIMED TO HAVE COME TO THE HANDS OF THE ASSESSEE SUBSEQUENT IN TIME AND THEREFORE, ASSESSEE IS PREVENTED FROM FURNISHING THE SAME BEFORE THE REVENUE AUTHORITIES AT THE TIME OF PASSING OF THE IMPUGNED ORDERS BY THE AO/CIT(A). THEREFORE, IN OUR OPINION, THE ORDER OF THE AO IN THE CASE OF SRI RAMAKANTH R MISHRA SHOULD BE ADMITTED BY THE AO IN THE SET ASIDE PROCEEDINGS. ACCORDINGLY, WE SET ASIDE ALL THE GROU NDS OF BOTH THE APPEALS TO THE FILES OF THE AO FOR ADJUDICATING THE ISSUE AFRESH A FTER CONSIDERING THE AFORESAID EVIDENCES AS WELL AS GRATING A REASONABLE OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE. GROUNDS AND THE OBJECTIONS RAISED ARE ACCORDINGLY S ET ASIDE. 3. IN THE RESULT, APPEAL FILED BY THE REVENUE AND T HE CROSS OBJECTION FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 4. THE AO PASSED AN ORDER DATED 14.03.2014 U/S 143( 3) R.W.S. 254, GIVING EFFECT TO THE ABOVE DIRECTION OF THE TRIBUNAL AND H ELD THAT THE PROPERTY IN QUESTION HAS DEVOLVED ONTO THE ASSESSEE UPON THE DI SSOLUTION OF THE PARTNERSHIP FIRM ON ACCOUNT OF THE DEATH OF HIS FAT HER AND IN SUCH A SITUATION, THE COST IN THE HANDS OF THE ASSESSEE WOULD BE THE COST AT WHICH THE FIRM TRANSFERS ITS ASSETS IN THE HANDS OF A PARTNERS AFT ER PAYING THE DUE CAPITAL GAINS TAX, IF ANY, THAT ARISES ON DISSOLUTION OF THE FIRM AS PER PROVISIONS OF SECTION 45(4) OF THE ACT. IN FACT, THE AO HAS FOLLOWED THE ORDER OF HIS PREDECESSOR-IN- OFFICE ON THE ABOVE ISSUE. FURTHER NOTING THAT THE ASSESSEE FAILED TO FURNISH ANY DOCUMENTARY EVIDENCE IN SUPPORT OF COST OF ACQUISIT ION AND ALSO CONSIDERING THE FACT THAT THE FIRM HAS NOT PAID ANY TAX ON DISS OLUTION WHICH IT WAS OTHERWISE LIABLE FOR PAYMENT OF TAXES AS PER THE PROVISIONS O F SECTION 45(4) OF THE ACT, THE AO TOOK INTO ACCOUNT THE COST OF ACQUISITION OF THE ASSESSEE IN THE YEAR 2000-01. MR. JAIPRAKASH A. MISHRA ITA NO. 1505/M/2019 4 THE AO FURTHER NOTED THAT SHRI. RAMAKANT MISHRA IS HOLDER OF 1/8 TH SHARE OF THE PROPERTY, WHEREAS BEFORE THE TRIBUNAL IT WAS REPRES ENTED THAT THE ASSESSEE AND SHRI. RAMAKANT MISHRA ARE THE ONLY JOINT OWNERS OF THE PROPERTY. THUS THE AO ESTIMATED THE VALUE OF THE PROPERTY FOR THE PURPOSE OF CALCULATION OF LONG TERM CAPITAL GAINS IN THE HANDS OF THE ASSESSEE AT RS.11 ,28,000/-, BY ALLOWING COST INFLATION INDEX FROM THE FINANCIAL YEAR 2000-01. 5. IN APPEAL, THE LD. CIT(A) VIDE ORDER DATED 30.11 .2018 HELD THAT : 4.3 ON PERUSAL OF THE FINDINGS OF THE AO IN THE AS SESSMENT ORDER AND THE SUBMISSION OF THE APPELLANT, THE FOLLOWING FACTS EM ERGE. I. FIRSTLY, THE CONTENTION OF THE APPELLANT THAT THE A O HAD PASSED THE ORDER FOLLOWING THE DIRECTIONS OF ITAT CANNOT BE ACCEPTED . THE HONBLE ITAT DIRECTED THE AO IN OUR OPINION, THE ORDER OF THE AO IN THE CASE OF SHRI RAMAKANT R. MISHRA BE ADMITTED BY THE AO IN THE SET ASIDE PROCEEDINGS. ACCORDINGLY, WE SET ASIDE ALL GROUNDS OF BOTH THE A PPEAL TO THE FILE OF AO FOR ADJUDICATING THE ISSUE AFRESH AFTER CONSIDERING THE AFORESAID EVIDENCES AS WELL AS GRANTING REASONABLE OPPORTUNITY OF BEING HEARD T O THE ASSESSEE AND ACCORDINGLY THE ORDER WAS SET ASIDE. FIRST OF ALL DURING THE COURSE OF ASSESSMENT PROCEE DINGS AS DIRECTED BY THE HONBLE ITAT, THE ORDER OF THE AO IN THE CASE OF SH RI RAMAKANT R. MISHRA WAS ADMITTED BY THE AO IN THE SET ASIDE PROCEEDINGS AND PROCEEDED FOR FURTHER ADJUDICATION BY GIVING ADEQUATE OPPORTUNITY OF BEIN G HEARD. II. THE SECOND CONTENTION OF THE APPELLANT THAT ORDER O F ITAT IS BINDING ON THE AO AND ANY DIFFERENT VIEW OTHER THAN ORDER OF HIGHE R AUTHORITIES IS AGAINST JUDICIARY DISCIPLINE CANNOT BE CONSIDERED. THE APPELLANT STATED THAT HE COULD NOT SUBMIT THE A SSESSMENT ORDER OF SHRI RAMAKANT MISHRA AT THE TIME OF THE ASSESSMENT PROCE EDINGS OF THE APPELLANT MR. JAIPRAKASH A. MISHRA ITA NO. 1505/M/2019 5 BEFORE THE AO. THIS WAS THE ARGUMENT OF THE APPELLA NT BEFORE THE TRIBUNAL ALSO THAT HE COULD NOT SUBMIT THE ORDER OF RAMAKANT MISHRA AT THE TIME OF HIS PROCEEDINGS AS RAMAKANT MISHRA IS THE JOINT OWNER O F THE PROPERTY. IN THE LIGHT OF THIS ARGUMENT, THE HONBLE ITAT DIRECTED T HE AO TO ADMIT RAMAKANT MISHRA'S ORDER IN THE PROCEEDINGS OF THE APPELLANT AND DIRECTED THE AO FOR ADJUDICATING THE ISSUE AFRESH AFTER CONSIDERING THE AFORESAID EVIDENCE AS WELL AS GRANTING REASONABLE OPPORTUNITY OF BEING HEARD. THIS DOESN'T INDICATE THAT THE ORDER OF SHRI RAMAKANT MISHRA IS REQUIRED TO BE FOLLOWED WHILE DECIDING THE ISSUE IN THE CASE OF THE APPELLANT. IT IS ALSO TO MENTION HERE THAT THE A.O OF THE APPELLANT IS NOT REQUIRED TO FOLLOW THE ORDER O F THE OTHER ASSESSING OFFICER EVEN IN THE CASE OF CO-OWNER IF THE ORDER I S WRONGLY DECIDED. THEREFORE, THERE IS NO JUDICIAL PRECEDENCE OF FOLLO WING THE ORDER ONE AO BY THE OTHER AO. TWO DIFFERENT AOS MAY TAKE DIFFERENT INDEPENDENT VIEWS. APPELLANT HAS RELIED UPON VARIOUS CASE LAWS WITH RE SPECT TO THE JUDICIAL PRECEDENCE NOT RESPECTED BY THE AO WHICH IN MY OPIN ION IS NOT APPLICABLE IN THIS CASE PARTICULARLY. III. THE THIRD CONTENTION OF THE APPELLANT THAT THE SAME ANALOGY CAN BE APPLIED IN BOTH THE CASES IS NOT ACCEPTABLE DUE TO THE FACT TH AT IN THE ASSESSMENT ORDER OF SHRI RAMAKANT MISHRA PASSED BY ITO-15(3)(3), THE SHARE IN THE PROPERTY HAS BEEN MENTIONED AS 1/8 TH SHARE WHEREAS BEFORE THE HONBLE ITAT, IT WAS REPRESENTED THAT THE APPELLANT AND MR. RAMAKANT MIS HRA WERE JOINT OWNERS OF THE PROPERTY WHICH SHOWS MISREPRESENTATION OF FA CTS AND ALSO RAMAKANT MISHRA'S ORDER HAS BEEN CONSIDERED BY THE AO WHILE PASSING THE ORDER IN THE CASE OF THE APPELLANT. 4.4. IN VIEW OF THE ABOVE AND GOING BY THE MERITS O F THE CASE, I AGREE WITH THE FINDINGS OF THE A.O. THAT THE VALUE OF THE PROPERTY FOR THE PURPOSE OF CALCULATION OF LONG TERM CAPITAL GAIN IN THE HANDS OF THE APPELLANT BE TAXED AT RS.11,28,000/-. THE GROUNDS OF APPEAL FILED ARE DIS MISSED. MR. JAIPRAKASH A. MISHRA ITA NO. 1505/M/2019 6 6. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBM ITS THAT THE ORDER OF THE TRIBUNAL WAS DISREGARDED BY THE AO ON THE PRETEXT T HAT ORDER OF THE ITO IS NOT BINDING ON THE OTHER ITO AND THE SAME WAS UPHELD BY THE LD. CIT(A). ELABORATING FURTHER, HE MENTIONS THAT IN CASE OF AN OTHER CO-OWNER, THE TRIBUNAL IN ITA NO. 445/MUM/2014 FOR THE SAME ASSESSMENT YEA R 2007-08 (SHRI NANDLAL R. MISHRA VIDE ORDER DATED 01.07.2015) HAS DISMISSED THE APPEAL F ILED BY THE REVENUE. THUS IT IS STATED THAT THE ABOVE OR DER OF THE TRIBUNAL IN THE CASE OF ANOTHER CO-OWNER BE FOLLOWED. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTA TIVE (DR) SUPPORTS THE ORDER PASSED BY THE LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. THE REASONS FOR OUR DECISIONS ARE GIVEN BELOW. TO ASCERTAIN THE FACTS, WE HAD ASKED THE LD. COUNS EL TO FILE A COPY OF DEED OF CONVEYANCE. THE SAME WAS FILED ON 15.02.2021. T HE FACTS IN THE PRESENT CASE AND IN SHRI NANDLAL R. MISHRA ARE SIMILAR. AS RECORDED BY THE TRIBUNAL, THE FACT S IN THE CASE OF SHRI NANDLAL R. MISHRA (SUPRA) ARE AS UNDER : 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE PROPERTY IN QUESTION WAS ORIGINALLY PURCHASED BY THE PARTNERSHIP FIRM IN THE YEAR 1975. THE FATHE R OF THE ASSESSEE EXPIRED IN 1976 WHO WAS A PARTNER IN THE SAID FIRM. THE ASSESSEE HA S TAKEN THE COST OF THE PROPERTY AS ON 01/04/1981, WHILE COMPUTING LONG TERM CAPITAL GA IN, AT RS.44,32,500/- AS AGAINST THE COST PRICE GIVEN BY THE VALUER AS RS. 44 LAKH. FOR THE PURPOSE OF CLAIMING RIGHTS IN THE PROPERTY, THE ACCOUNTS OF THE FIRM WERE MADE UP ON THE DATE OF SALE AND SALE CONSIDERATION SO RECEIVED WAS DISTRIBUTED AMONG ALL THE LEGAL HEIRS OF THE PARTNERS OF THE FIRM. THE ASSESSEE RECEIVED 1/8TH SHARE OUT OF THE TOTAL SALE CONSIDERATION AND THE MR. JAIPRAKASH A. MISHRA ITA NO. 1505/M/2019 7 SAME WAS OFFERED FOR TAX IN HIS RETURN UNDER THE HE AD INCOME FROM LONG TERM CAPITAL GAIN. THE ASSESSING OFFICER WAS OF THE VIEW THAT TH E RIGHT ON THE PROPERTY ARISE IN THE HANDS OF THE ASSESSEE AFTER THE DISSOLUTION OF THE FIRM, THEREFORE, COST INFLATION INDEX WILL BE ALLOWABLE AFTER THE DISSOLUTION OF THE FIRM AND NOT AS ON 01/04/1981. THE ASSESSING OFFICER ESTIMATED THE VALUE OF THE PROPER TY, FOR THE PURPOSES OF COMPUTATION OF LTCG, IN THE HANDS OF THE ASSESSEE, AT RS.4,64,250/- I.E. 1/8TH OF RS.45,14,000/-, AS PER VALUATION OF MUNDRAK ZILA AD HIKARI, THUS, THE LONG TERM CAPITAL GAIN, IN THE HANDS OF THE ASSESSEE, WAS COMPUTED AT RS.21,03,705/-. ON APPEAL BEFORE THE LD. CIT(A), SHRI NANDLAL R. M ISHRA RELIED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN CIT V. MANJULA J. SHAH (2012) 249 CTR (BOM) 270. THE LD. CIT(A), FOLLOWING THE ABOVE DECISION DIRECTED THE AO TO ADOPT COST INFLATION INDEX AS ON 01.04.2008. THE RE VENUE APPEALED AGAINST THE ORDER OF THE LD. CIT(A) BEFORE THE TRIBUNAL. WE FIN D THAT VIDE ORDER DATED 01.07.2015, THE TRIBUNAL (ITA NO. 445/MUM/2014 FOR THE SAME ASSESSMENT YEAR 2007-08) HELD THAT : 2.8. IT IS TRUE THAT THE WORDS OF A STATUTE ARE TO BE UNDERSTOOD IN THEIR NATURAL AND ORDINARY SENSE UNLESS THE OBJECT OF THE STATUTE SUG GESTS TO THE CONTRARY. THUS, IN CONSTRUING THE WORDS 'ASSET WAS HELD BY THE ASSESSE E' IN CL. (III) OF EXPLN. TO S. 48 OF THE ACT, ONE HAS TO SEE THE OBJECT WITH WHICH THE S AID WORDS ARE USED IN THE STATUTE. IF ONE READS EXPLN. 1(I)(B) TO S. 2(42A) TOGETHER WITH SS. 48 AND 49 OF THE ACT, IT BECOMES ABSOLUTELY CLEAR THAT THE OBJECT OF THE STATUTE IS NOT MERELY TO TAX THE CAPITAL GAINS ARISING ON TRANSFER OF A CAPITAL ASSET ACQUIRED BY AN ASSESSEE BY INCURRING THE COST OF ACQUISITION, BUT ALSO TO TAX THE GAINS ARISING ON T RANSFER OF A CAPITAL ASSET INTER ALIA ACQUIRED BY AN ASSESSEE AS PROVIDED UNDER S. 49 OF THE ACT WHERE THE ASSESSEE IS DEEMED TO HAVE INCURRED THE COST OF ACQUISITION. TH EREFORE, IF THE OBJECT OF THE LEGISLATURE IS TO TAX THE GAINS ARISING ON TRANSFER OF A CAPITAL ASSET ACQUIRED UNDER A GIFT OR WILL OR INHERITANCE BY INCLUDING THE PERIOD FOR WHICH THE SAID ASSET WAS HELD BY THE PREVIOUS OWNER IN DETERMINING THE PERIOD FOR WH ICH THE SAID ASSET WAS HELD BY MR. JAIPRAKASH A. MISHRA ITA NO. 1505/M/2019 8 THE ASSESSEE, THEN THAT OBJECT CANNOT BE DEFEATED B Y EXCLUDING THE PERIOD FOR WHICH THE SAID ASSET WAS HELD BY THE PREVIOUS OWNER WHILE DETERMINING THE INDEXED COST OF ACQUISITION OF THAT ASSET TO THE ASSESSEE. IN OTHER WORDS, IN THE ABSENCE OF ANY INDICATION IN CL. (III) OF THE EXPLANATION TO S. 48 OF THE ACT THAT THE WORDS 'ASSET WAS HELD BY THE ASSESSEE' HAS TO BE CONSTRUED DIFFERENT LY, THE SAID WORDS SHOULD BE CONSTRUED IN ACCORDANCE WITH THE OBJECT OF THE STAT UTE, THAT IS, IN THE MANNER SET OUT IN EXPLN. 1(I)(B) TO S. 2(42A) OF THE ACT. 2.9. APART FROM THE ABOVE, S. 55(1)(B)(2)(II) OF TH E ACT PROVIDES THAT WHERE THE CAPITAL ASSET BECAME THE PROPERTY OF THE ASSESSEE BY ANY OF THE MODES SPECIFIED UNDER S. 49(1) OF THE ACT, NOT ONLY THE COST OF IMPROVEMENT INCURRED BY THE ASSESSEE BUT ALSO THE COST OF IMPROVEMENT INCURRED BY THE PREVIOUS OW NER SHALL BE DEDUCTED FROM THE TOTAL CONSIDERATION RECEIVED BY THE ASSESSEE WHILE COMPUTING THE CAPITAL GAINS UNDER S. 48 OF THE ACT. THE QUESTION OF DEDUCTING THE COS T OF IMPROVEMENT INCURRED BY THE PREVIOUS OWNER IN THE CASE OF AN ASSESSEE COVERED U NDER S. 49(1) OF THE ACT WOULD ARISE ONLY IF THE PERIOD FOR WHICH THE ASSET WAS HE LD BY THE PREVIOUS OWNER IS INCLUDED IN DETERMINING THE PERIOD FOR WHICH THE AS SET WAS HELD BY THE ASSESSEE. THEREFORE, IT IS REASONABLE TO HOLD THAT IN THE CAS E OF AN ASSESSEE COVERED UNDER S. 49(1) OF THE ACT, THE CAPITAL GAINS LIABILITY HAS T O BE COMPUTED BY CONSIDERING THAT THE ASSESSEE HELD THE SAID ASSET FROM THE DATE IT WAS H ELD BY THE PREVIOUS OWNER AND THE SAME ANALOGY HAS ALSO TO BE APPLIED IN DETERMINING THE INDEXED COST OF ACQUISITION. FOR DETERMINING THE CAPITAL GAIN, THE COST OF ACQUI SITION OF CAPITAL ASSET IS CRUCIAL. THUS, KEEPING IN VIEW, THE TOTALITY OF FACTS, WE HO LD THAT THE LONG TERMS CAPITAL GAINS HAS TO BE FROM THE DATE FROM WHICH THE CAPITAL ASSE T IN QUESTION WAS HELD BY THE PREVIOUS OWNER AND THE INDEXED COST OF ACQUISITION ALSO HAS TO BE DETERMINED ON THE VERY SAME BASIS, CONSEQUENTLY, THE INDEXED COST OF ACQUISITION HAS TO BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OW NER FIRST HELD THE ASSET AND NOT THE YEAR IN WHICH THE ASSESSEE BECAME THE OWNER OF SUCH ASSET. THE RATIO LAID DOWN IN B.N. VYAS VS CIT (1986) 159 ITR 141 (GUJ.), CIT VS N.N. MOHAN & SONS (2001) 250 ITR 131 (DEL.), CIT VS HARBHAGWAN (1998) 145 CTR (P & H ) 332, SYNDICATE BANK LTD. VS ADDL.CIT 155 ITR 681 (KAR.), RANCHODBHAI B. PATEL V S CIT 81 ITR 446 (GUJ.), CIT VS M. MR. JAIPRAKASH A. MISHRA ITA NO. 1505/M/2019 9 RAMMAIYA REDDY 158 ITR 611 (KAR.), CIT VS SMT. M. S UBAIDA BEEBI 160 ITR 557 (KER.), CIT VS STEEL GROUP LTD. 131 ITR 234 (CAL.), CIT VS DUNCAN BROTHERS & COMPANY LTD. 209 ITR 44 (CAL.), ARUN SUUNY VS DCIT (2009) 1 84 TAXMAN 498 (KER.) FURTHER SUPPORTS THE CASE OF THE ASSESSEE. RESPECTFULLY FOL LOWING THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT IN MANJULA J. SHAH (SUPRA ), WE AFFIRM THE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), TH EREFORE, THE APPEAL OF THE REVENUE IS DISMISSED. 7.1 FACTS BEING IDENTICAL, WE FOLLOW THE ORDER OF T HE CO-ORDINATE BENCH IN THE CASE OF ANOTHER CO-OWNER SHRI NANDLAL R. MISHRA AND SET ASIDE THE ORDER OF THE LD. CIT(A). 8. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/03/2021. SD/- SD/- (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 30/03/2021 RAHUL SHARMA, SR. P.S. 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./ASSISTANT REGISTRAR) ITAT, MUMBAI