Smt. Anjanaben Khushalbhai Anadkat, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-2 (4), RAJKOT-GUJARAT

ITA 21/RJT/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1320 (ITAT-RAJKOT)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-04-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 08-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DM RINDANI
• Keywords: Capital asset; Fair market value; Valuation report
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: S H RI ANIL CHATURVEDI , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] SMT. ANJANABEN KHUSHALBHAI ANADKAT, BLOCK NO: A/39, OPP. AKASHWANI ROAD, KIRAN SOCIETY, RAJKOT PAN: AHXPA6138R (APPELLANT) VS THE ITO, WARD: 2(4), RAJKOT (RESP ONDENT) REVENUE BY : S H RI PRASOON KABRA , D . R. ASSESSEE BY: S H RI D.M. RINDANI , A.R. DATE OF HEARING : 07 - 04 - 2 016 DATE OF PRONOUNCEMENT : 29 - 04 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THI S ASSESSEE S APPEAL FOR A.Y. 2011 - 12 , AR ISES FROM ORDER OF THE CIT(A) - 2, RAJKOT DATED 15 - 10 - 2015 IN APPEAL NO. CIT(A) - 2 / 0134/13 - 14 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 21 / RJT /20 16 A SSESSMENT YEAR 2011 - 12 I.T.A NO. 21 /RJT /20 16 A.Y. 2011 - 12 PAGE NO SMT. ANJANABEN KHUSHALBHAI ANADKAT VS. ITO 2 2. THE ASSESSEE S SOLE SUBSTANTIV E CHALLENGES THE LOWER APPELLATE ORDER AFFIRMING ASSESSING OFFICER S ACTION IN TAKING COST INFLATION INDEX OF THE CAPITAL ASSET SOLD AS FINANCIAL YEAR 2001 - 02 INSTEAD OF 01 - 04 - 1981 RESULTING IN ADDITION OF LONG TERM CAPITAL GAINS AMOUNTING TO RS. 10,71,529/ - . 3. FACTS OF THE CASE ARE IN A NARROW COMPASS. THE ASSESSEE ALONG WITH FAMILY MEMBERS SOLD CAPITAL ASSET IN QUESTION FOR RS. 97,12,800/ - IN THE RELEVANT PREVIOUS YEAR. HER SHARE THEREIN IS 12.5 %. THE ASSESSEE FILED A VALUATION REPORT FROM A APPROVED FAIR MARKET VALUE R OF THE PROPERTY SOLD AS RS. 11,65,536/ - @ 240 PER SP MT. AS ON 01 - 04 - 1981 RESULT ING IN TOTAL CAPITAL GAINS OF RS . 14,25,840/ - . HER SHARE THEREIN WOULD COME TO RS. 1,71,230/ - . THE A SSESSING OFFICER DID NOT RAISE ANY DISPUTE EXCEPT THE ONE IN QUESTION RELATING TO THE DATE OF ADOPTING FAIR MARKET VALUE OF THE PROPERTY SOLD. THE ASSESSEE QUOTED HER DATE OF ACQUISITION AS 19 - 12 - 2007 I.E. THE DAY WHEN HER FATHER SHRI KALYANJEE GOKALBHAI S DEMISE . SHE PLEADED THAT HER FATHER ACQUIRED THE CAPITAL ASSET ON 10 - 04 - 1961 AND ITS FAIR MARKET VALUE IS TO BE TAKEN FROM 01 - 04 - 1981. THE ASSESSING OFFICER REJECTED THIS CONTENTION BY HOLDING THAT THE ASSESSEE HAD HELD THE ASSET FOR THE FIRST TIME IN THE YEAR 2001 AND THEREFORE, SECTION 48 EXPLANATION (III) WOULD BE ATTRACTED IN THE INSTANT CASE. HE PROCEEDED ON THIS REASONING TO RE - COMPUTE FAIR MARKET VALUE OF ASSESSEE S CAPITAL ASSET FROM FINANCIAL YEAR 2007 - 08 INS TEAD OF 01 - 04 - 1981 TO RE - COMPUTE TH E IMPUGNED LONG TERM GAIN OF RS. 10,71,529/ - AS AGAINST THOSE DECLARED EARLIER AMOUNTING TO RS. 1,78,230/ - THEREBY ADDING THE I.T.A NO. 21 /RJT /20 16 A.Y. 2011 - 12 PAGE NO SMT. ANJANABEN KHUSHALBHAI ANADKAT VS. ITO 3 DIFFERENTIAL OF RS. 8,93,299/ - IN ASSESSEE S HANDS IN ASSESSMENT ORDER DATED 30 - 09 - 2013. 4. THE CIT(A) UPHOLDS ASSESSING OFFICE R S ACTION. 5. BOTH THE LD. REPRESENTATIVES REITERATE RESPECTIVE STANDS IN THE COURSE OF HEARING. THE SOLE DISPUTE BETWEEN THE PARTIES IS ABOUT FAIR MARKET VALUE OF THE ASSESSEE S CAPITAL ASSETS WHETHER TO BE T AKEN FROM 01 - 04 - 1981 OR FINANCIAL YEAR 200 7 - 08. THERE IS NO DISPUTE THAT THE ASSESSEE ACQUIRED HER TITLE IN THE CAPITAL ASSET IN QUESTION BY WAY OF INHERITANCE AFTER HER FATHER S DEATH. HER FATHER HAD ATTAINED TITLE OF THIS CAP ITAL ASSET IN THE YEAR 1961. WE FIND THAT HON BLE JURISDICTIONAL HIG H COURT IN (2013) 38 TAXMANN.COM 42 (GUJ) CIT VS. GAUTAM MANUBHAI AMIN DEALS WITH SIMILAR ACQUISITION BY THE SAID ASSESSEE UNDER INHERITANCE TO HOLD THAT FAIR MARKET VALUE OF THE CAPITAL ASSET IN QUESTION HAD TO BE TAKEN FROM THE DATE OF THE INITIAL ACQUIS ITION OF THE ASSET BY THE PREDECESSOR IN INTEREST OR 01 - 04 - 1981; WHICHEVER IS EARLIER . THEIR LORDSHIPS UPHOLD SPECIAL BENCH DECISION OF THE TRIBUNAL IN DCIT VS. MANJULA J. SHAH (2010) 35 SOT 105 (MUM) (SB) DECIDED AFTER INTERPRETING SECTION 49(1)(III) OF THE ACT. T HE REVENUE IS UNABLE TO POINT OUT ANY DISTINCTION ON FACTS OR LAW THEREIN. WE CONCLUDE IN THESE PECULIARS FACTS AND CIRCUMSTANCES THAT FAIR MARKET VALUE OF THE ASSESSEE S CAPITAL ASSET SOLD HAS TO BE ADOPTED FROM 01 - 04 - 1981 AND BOTH THE LOWER AUTHORITIES HAVE ACCORDINGLY ERRED IN TAKING THE SAME AS IN FINANCIAL YEAR 2007 - 08 TURNING OUT TO BE THE YEAR OF HER ATTAINING TITLE ON ACCOUNT OF INHERITANCE AFTER HER FATHER S DEMISE. WE ACCEPT I.T.A NO. 21 /RJT /20 16 A.Y. 2011 - 12 PAGE NO SMT. ANJANABEN KHUSHALBHAI ANADKAT VS. ITO 4 ASSESSEE S ARGUMENTS TO DELETE THE IMPUGNED LONG TERM CAPI TALS GAINS. 6. THIS ASSESSEE S APPEAL IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OUR T ON 29 - 04 - 201 6 SD/ - SD/ - (ANIL CHATURVEDI ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 29 /04 / 2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT