Income-tax Officer, V. Smt. Sandhya Anil Deshpande, Pune

ITA 1576/PUN/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9119 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 03-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK AGGARWAL
• Keywords: Cost of acquisition
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE , , , BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 1576 /P U N/201 5 / ASSESSMENT YEAR : 20 1 2 - 13 INCOME TAX OFFICER, WARD 3(4), PUNE ....... / APPELLANT / V/S. SMT. SANDHYA ANIL DESHPANDE, A/103, RUTURANG APARTMENT, S. NO. 4, NEAR BHARTI VIDYA BHAVAN, KOTHRUD, PUNE 411038 PAN : AFTPD4117R / RESPONDENT ASSESSEE BY : SHRI S.H. ARORA REVENUE BY : SHRI VIVEK AGGARWAL / DATE OF HEARING : 31 - 07 - 2017 / DATE OF PRONOUNCEMENT : 31 - 0 7 - 2017 / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL HAS BEEN FILED BY THE DEPARTMENT ASSAILING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 3, PUNE DATED 30 - 09 - 2015 FOR THE ASSESSMENT YEAR 2012 - 13. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE HAD ACQUIRED RESIDENTIAL PROPERTY FROM HIS FATHER ON 01 - 07 - 2002 AFTER HIS D EMISE. THE FATHER OF THE ASSESSEE HAD PURCHASED 2 ITA NO. 1576/PUN/2015, A.Y. 2012 - 13 RESIDENTIAL PLOT IN THE YEAR 198 1 AND HAD CONSTRUCTED A BUNGALOW ON THE SAID PLOT DURING THE FINANCIAL YEAR 1981 - 82. SUBSEQUENTLY, FURTHER IMPROVEMENT S /ADDITIONS WERE MADE TO THE BUNGALOW IN THE FINANCIAL Y EARS 1992 - 93 AND 2002 - 03. THE ASSESSEE CLAIMED TOTAL COST OF ACQUISITION/CONSTRUCTION OF RESIDENTIAL PROPERTY AS RS.19,50,700/ - . THE ASSESSEE SOLD THE SAID HOUSE PROPERTY ON 08 - 07 - 2011 FOR A CONSIDERATION OF RS.1,57,00,000/ - . THE ASSESSEE COMPUTED LONG TERM CAPITAL GAIN FROM SALE OF AFORESAID PROPERTY AS RS.71,36,446/ - . THE ASSESSEE CLAIMED EXEMPTION U/S. 54 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) AND RETURNED CAPITAL GAIN AS NIL . DURING THE COURSE OF SCRUTINY ASSESSMENT PR OCEEDINGS, THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAS WRONGLY CLAIMED INDEXATION BENEFIT FROM THE YEAR IN WHICH THE PREVIOUS OWNER I.E. THE FATHER OF THE ASSESSEE HAD ACQUIRED PROPERTY . ACCORDING TO ASSESSING OFFICER, THE ASSESSEE SH OULD HAVE APPLIE D INDEXATION BENEFIT IN THE FINANCIAL YEAR IN WHICH THE ASSESSEE BECOME OWNER OF THE PROPERTY. THE ASSESSING OFFICER THUS, MADE ADDITION OF RS.49,21,126/ - ON ACCOUNT OF LONG TERM CAPITAL GAIN. AGGRIEVED BY THE ASSESSMENT ORDER DATED 23 - 02 - 2015, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) FOLLOWING THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIO NER OF INCOME TAX VS. SMT. MANJULA J. SHAH REPORTED AS 355 ITR 474 AND VARIOUS OTHER DECISIONS OF THE PUNE BENCH OF THE TRIBUNAL , REVERSED THE FINDINGS OF ASSESSING OFFICER . NOW, THE DEPARTMENT IS IN APPEAL BEFORE THE TRIBUNAL ASSAILING THE FINDINGS OF CO MMISSIONER OF INCOME TAX (APPEALS) IN DETERMINING INDEXED COST OF ACQUISITION OF THE ASSET INHERITED BY THE ASSESSEE FROM THE DATE OF ACQUISITION OF THE ASSET BY PREVIOUS OWNER I.E. FATHER OF THE ASSESSEE . 3 ITA NO. 1576/PUN/2015, A.Y. 2012 - 13 3. SHRI VIVEK AGGARWAL REPRESENTING THE DEPARTME NT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER AND PRAYED FOR SETTING ASIDE THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). 4. ON THE OTHER HAND SHRI S.H. ARORA APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SMT. MANJULA J. SHAH (SUPRA). THE LD. AR SUBMITTED THAT THE APPEAL OF THE DEPARTMENT IS LIABLE TO BE DISMISSED BEING DEVOID OF ANY MERI T. 5. BOTH SIDES HEARD. O RDERS OF THE AUTHORITIES BELOW PERUSED. THE FACTS NARRATED ABOVE ARE NOT IN DISPUTE. THE COMMISSIONER OF INCOME TAX (APPEALS) GRANTED RELIEF TO THE ASSESSEE BY OBSERVING AS UNDER : 4.2 I HAVE CONSIDERED THE SUBMISSION MADE B Y THE APPELLANT AND PERUSED MATERIAL AVAILABLE ON RECORD BEFORE ME. IT IS SEEN THAT THE APPELLANT HAS RELIED ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS SMT. MANJULA J. SHAH, 355 ITR 474 (BOM), WHEREIN IT HAS BEEN HELD THAT THE COST OF THE ASSET HAS TO BE DETERMINED AFTER TAKING INTO ACCOUNT THE PERIOD FOR WHICH THE SAID ASSET WAS HELD BY THE PREVIOUS OWNER. THE HON'BLE HIGH COURT HELD THAT IN A CASE OF THE ASSESSEE COVER ED U/S 49(1) OF THE ACT, THE CAPITAL GAINS LIABILITY HAS TO BE COMPUTED BY CONSIDERING THAT THE ASSESSEE HELD THE SAID ASSET FROM THE DATE IT HAD BEEN HELD BY THE PREVIOUS OWNER AND SAME ANALOGY HAS TO BE APPLIED IN DETERMINING THE INDEXED COST OF ACQUISIT ION. IT IS SEEN THAT IN THE CASE OF THE APPELLANT THE PROPERTY WAS ACQUIRED AFTER THE DEATH OF THE APPELLANT'S FATHER LATE P.R. DESHPANDE. THE FATHER OF THE APPELLANT HAD PURCHASED THE PLOT IN THE YEAR 1981 AND HAD CONSTRUCTED A BUNGALOW ON THIS PLOT IN A. Y. 1981 - 82. THE ASSESSING OFFICER HAD GIVEN THE INDEXATION BENEFIT ONLY IN RESPECT OF THE F.Y. 2002 - 03 WHEN THE PROPERTY PASSED TO THE APPELLANT AFTER THE DEATH OF HER FATHER ON 01.07.2002. THE RATIO OF THE JURISDICTIONAL HIGH COURT DECISION HAS LAID DOWN THAT IN SUCH SITUATION THE INDEXED COST OF ACQUISITION HAS TO BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET AND IN THE YEAR IN WHICH THE ASSESSEE BECAME OWNER OF THE ASSET. FOLLOWING THIS THE COST OF ACQUISITION IN THE CASE OF THE APPELLANT TOO HAS TO BE DETERMINED WITH EFFECT FROM THE YEAR IN WHICH THE ASSET WAS FIRST ACQUIRED BY THE PREVIOUS OWNER. 4 ITA NO. 1576/PUN/2015, A.Y. 2012 - 13 6. THE LD. DR HAS NOT BEEN ABLE TO CONTROVERT THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). WE DO NOT FI ND ANY REASON TO INTERFERE WITH THE WELL REASONED FINDINGS OF THE FIRST APPELLATE AUTHORITY . THE COMMISSIONER OF INCOME TAX (APPEALS) IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE HAS RIGHTLY FOLLOWED THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SMT. MANJULA J. SHAH (SUPRA) . WE FIND NO MERIT IN THE APPEAL BY THE DEPARTMENT , A CCORDINGLY, THE IMPUGNED ORDER IS UPHELD AND THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED. 7. IN THE RESULT, THE APPEAL O F THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER HEARING ON MONDAY, THE 31 ST DAY OF JULY, 2017 . SD/ - SD/ - ( / ANIL CHATURVEDI ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 31 ST JULY, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 3, PUNE 4. THE PR. CIT - 2, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE