The ITO, Ward-2(4), Baroda V. Shri Gautam M.Amin, Baroda

ITA 2194/AHD/2012

• Counselvise Citation: 219420514 RSA 2012
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 04-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA
• Keywords: Capital asset; Gift; Cost of acquisition; Fair market value

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , .. , '# ' $ BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ./ I.T.A. NO.2194/AHD/2012 ( & ' & ' & ' & ' / / / / ASSESSMENT YEAR : 2006-07) ITO, WARD-2(4) BARODA & & & & / VS. SHRI GAUTAM MANUBHAI AMIN 401-55/B, SUVARNPURI SOCIETY JETALPUR ROAD CHIKUWADI, BARODA ( '# ./)* ./ PAN/GIR NO. : ABKPA 2569B ( (+ / // / APPELLANT ) .. ( ,-(+ / RESPONDENT ) (+ . ' / APPELLANT BY : SHRI Y.P.VERMA, SR.D.R. ,-(+ / . ' / RESPONDENT BY : SHRI MANISH J.SHAH &0 / # / / / / DATE OF HEARING : 03/12/2012 12' / # / DATE OF PRONOUNCEMENT : 7.12.12 '3 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF THE LD.CIT(A)-II, BARODA DATED 03.07.2012 PASSED FOR A. Y. 2006-07 BY RAISING FOLLOWING GROUND:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT (APPEALS) ERRED IN ALLOWING INDEXED COST OF ACQUISITION FROM THE BASE YEAR I.E. FROM 1.4.1981 AND THEREBY DELETING T HE ADDITION OF ` 1,00,76,878/- MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN WITHOUT APPRECIATING THE FACT THAT THE ASSET WAS HELD BY TH E ASSESSEE ONLY FROM THE FINANCIAL YEAR 1998-99 AND AS PER THE PROVISION S OF EXPLANATION (III) TO SECTION 48 OF THE INCOME-TAX ACT THE COST INFLAT ION INDEX FOR THE FIRST YEAR IN WHICH THE ASSET WAS HELD BY THE ASSESSEE HA S TO BE CONSIDERED. ITA NO. 2194/AHD/2012 ITO VS. M/S. SHRI GAUTAM M.AMIN ASST.YEAR 2006-07 - 2 - 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.147 R.W.S.143(3) OF THE I.T.ACT, 1961 DA TED 16.08.2011 WERE THAT THE ASSESSEE IN INDIVIDUAL CAPACITY HAS INHERI TED A PROPERTY I.E. BANGALOW SITUATED NEAR GRID SUB-STATION, VILLAGE GO TRI ALONG WITH HIS BROTHER ON THE DEMISE OF THEIR FATHER LATE SHRI MAN UBHAI G.AMIN ON 23.12.1998. THAT PROPERTY WAS SOLD FOR A CONSIDER ATION OF RS.3.35 CRORES. THE ASSESSEE HAD CALCULATED HIS SH ARE OF CAPITAL GAIN AT RS.21,24,438/-. THE ISSUE WAS ON ACCOUNT OF THE F ACT THAT THE ASSESSEE HAD TAKEN THE BENEFIT OF COST INFLATION INDEX AS PER THE BASE YEAR 1981- 82. ON THE OTHER HAND, THE AO HAS HELD THAT THE P ROPERTY WAS ACQUIRED ON 23.12.1998, THEREFORE THE COST INFLATION INDEX SHOULD BE AS PER THE F.Y. 1998-99. WITH THE RESULT, THE CAPITAL GAIN WA S RECOMPUTED BY THE AO AND THE ASSESSEES 50% SHARE WAS ASSESSED AT RS. 1,25,76,878/-. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHO RITY. 3. LD.CIT(A) CITED A DECISION OF DY.CIT VS. MANJULA J.SHAH [2010] 35 SOT 105 (MUM.) WHICH WAS LATER ON AFFIRMED BY H ONBLE BOMBAY HIGH COURT REPORTED AS 249 CTR 270(BOM.) AND HELD T HAT THE COST INFLATION INDEX WAS TO BE GIVEN AS ON 1.4.1981. 4. WITH THIS BRIEF BACK-GROUND, WE HAVE HEARD BOTH THE SIDES. THE ISSUE IS DIRECTLY COVERED BY THE DECISION OF HONBL E BOMBAY HIGH COURT PRONOUNCED IN THE CASE OF CIT VS. MANJULA J.SHAH 24 9 CTR 270, WHEREIN THE HONBLE COURT HAS HELD THAT, QUOTE WHILE COMPUTING THE CAPITAL GAINS ARISING ON TRANSFER OF A CAPITAL ASSET ACQUIR ED BY THE ASSESSEE UNDER A GIFT, THE INDEXED COST OF ACQUISITION HAS TO BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER F IRST HELD THE ASSET AND ITA NO. 2194/AHD/2012 ITO VS. M/S. SHRI GAUTAM M.AMIN ASST.YEAR 2006-07 - 3 - NOT THE YEAR IN WHICH THE ASSESSEE BECAME THE OWNER OF THE ASSET. UNQUOTE. THE RELEVANT PROVISION IS UNAMBIGUOUS BEC AUSE U/S.49(1)(III) WHERE THE CAPITAL ASSET BECAME THE PROPERTY OF THE ASSESSEE BY SUCCESSION, INHERITANCE OR DEVOLUTION, THE COST OF ACQUISITION OF THE ASSET SHALL BE DEEMED TO BE THE COST FOR WHICH THE PREVIO US OWNER OF THE PROPERTY HAD ACQUIRED IT. THE PROPERTY IN QUESTI ON WAS UNDISPUTEDLY DEVOLVED ON THE ASSESSEE THROUGH INHERITANCE. THE ASSESSEE ALONG WITH HIS BROTHER HAVE INHERITED THE PROPERTY ON THE DEMI SE OF THEIR FATHER, WHO DIED ON 23.12.98. THEREFORE, THE ASSESSEE IS ENTI TLED FOR THE BENEFIT OF COST INFLATION INDEX AS ON 1.4.1981. IN THIS REG ARD, THE RESPECTED CO- ORDINATE BENCH ITAT DELHI IN THE CASE OF ACIT VS. S URESH VERMA 135 ITD 102 (DELHI) HAVE ALSO HELD THAT WHERE THE ASSES SEE BECAME OWNER OF THE PROPERTY BY INHERITANCE AND THE PROPERTY WAS AC QUIRED BY THE FATHER PRIOR TO 1.4.1981, THEN FAIR MARKET VALUE OF THE PR OPERTY IN THE HANDS OF THE ASSESSEE HAD TO BE TAKEN AS IN THE HANDS OF HIS FATHER AS ON 1.4.1981. RESPECTFULLY FOLLOWING THESE PRECEDENTS, WE HEREBY APPROVE THE VIEW TAKEN BY LD.CIT(A). THEREFORE, GROUND RAISED BY THE REVENUE IS DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. SD/- SD/ - ( .. ) ( ) '# ( T.R. MEENA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL ME MBER AHMEDABAD; DATED 7/ 12 /2012 ..&, .&../ T.C. NAIR, SR. PS ITA NO. 2194/AHD/2012 ITO VS. M/S. SHRI GAUTAM M.AMIN ASST.YEAR 2006-07 - 4 - '3 / ,4 5'4' '3 / ,4 5'4' '3 / ,4 5'4' '3 / ,4 5'4'/ COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. 6 / CONCERNED CIT 4. 6() / THE CIT(A)-II, BARODA 5. 49: ,& , , / LEARNED DEPARTMENTAL REPRESENTATIVE, ITAT, AHMEDABAD 6. :; <0 / GUARD FILE. '3& '3& '3& '3& / BY ORDER, -4 , //TRUE COPY// = == =/ // / ) ) ) ) ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DIRECT DICTATION 03/12/2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 04/12/2012 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S7.12.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7.12.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER