The DCIT, Circle-2(2), Baroda V. Shri Rajesh Vithalbhai Patel, Baroda

ITA 225/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60395 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 22-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Cost of acquisition

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) )* + ) )* + ) )* + ) ' ' ' ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.225/AHD/2010 [ASSTT.YEAR : 2006-2007] DCIT, CIR.2(2) BARODA. /VS. SHRI RAJESH VITHALBHAI PATEL GOTRI-SEVAL ROAD BARODA. PAN : ACUPP 6456 P ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) 1& 2 3 )/ ASSESSEE BY : NONE + 2 3 )/ REVENUE BY : SHRI SANJAY DHARIWAL 5 2 &(*/ DATE OF HEARING : 24 TH MAY, 2012 678 2 &(*/ DATE OF PRONOUNCEMENT : 1 ST JUNE, 2012 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL OF THE REVENUE FOR THE ASSESSMENT YEAR 2006-2007 IS DIRECT ED AGAINST THE ORDER OF THE LD CIT(A)-II, BARODA DATED 15.10.2009. ITA NO.225/AHD/2010 -2- 2. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE. ACCORDINGLY, THE APPEAL OF THE REVENUE IS BEING DEC IDED EX PARTE QUA THE ASSESSEE-RESPONDENT ON MERIT AFTER HEARING THE LEARNED DR. 3. THE ONLY GROUND OF THE APPEAL OF THE REVENUE REA DS AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DIRECTING TO COMPUT E THE LONG TERM CAPITAL GAIN ON THE BASIS OF INDEX COST OF ACQ UISITION AS ON 01.4.1981 INSTEAD OF TAKING THE COST OF ACQUISIT ION AS ON MARCH, 1995 IN WHICH THE ASSESSEE ACQUIRED THE PROP ERTY FROM HIS BROTHER AS SPECIFIED IN EXPLANATION (III) TO SE CTION 48 OF THE ACT THAT THE INDEXED COST OF ACQUISITION SHALL APPL Y FROM 01.04.1981 ONLY WHEN THE ASSESSEE (NOT THE PREVIOUS OWNER) HELD IT PRIOR TO 01.04.1981. 4. THE LEARNED DR HAS RELIED ON THE ORDER OF THE AO . HE SUBMITTED THAT THE BENEFIT OF INDEXATION FOR CALCULATING LONG TERM CAPITAL IS AVAILABLE TO THE ASSESSEE FROM THE DATE ON WHICH TH E SUB-REGISTRAR HAS TRANSFERRED THE HOUSE IN QUESTION IN THE NAME OF TH E ASSESSEE. HE REFERRED TO PARA 5.3 OF THE ASSESSMENT ORDER IN SUP PORT OF HIS SUBMISSIONS. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNE D DR AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FI ND THAT THE PROPERTY IN QUESTION WAS ACQUIRED BY THE ASSESSEE B Y WAY OF GIFT IN THE YEAR 1995 FROM HIS BROTHER. ACCORDINGLY, THE MODE OF ACQUISITION IS AS PROVIDED UNDER SECTION 49(I)(II) OF THE I.T.ACT. THE PROVISION OF SECTION 49 OF THE IT ACT LAYS DOWN THAT WHERE THE C APITAL ASSET BECOME THE PROPERTY OF THE ASSESSEE IN A GIFT OR WILL, THE COST OF ACQUISITION OF THE ASSET SHALL BE DEEMED TO BE A COST FOR WHICH TH E PREVIOUS OWNER OF THE PROPERTY ACQUIRED IT, AS INCREASED BY THE COST OF ANY IMPROVEMENT ITA NO.225/AHD/2010 -3- OF THE ASSET INCURRED OR BORNE BY THE PREVIOUS OWNE R OR THE ASSESSEE AS THE CASE MAY BE. IN THIS CASE, ADMITTEDLY, THE PRO PERTY IN QUESTION WAS ACQUIRED BY THE ASSESSEES BROTHER PRIOR TO 1.4.198 1 AND THE ASSESSEE BECAME OWNER THEREOF BY WAY OF GIFT OF PROPERTY BY THE BROTHER TO THE ASSESSEE. ACCORDINGLY, AS PER THE PROVISIONS OF SE CTION 49 OF THE IT ACT, THE COST OF ACQUISITION HAS TO BE TAKEN AS THE COST TO THE PREVIOUS OWNER AND SINCE THE PREVIOUS OWNER, THE BROTHER OF THE ASSESSEE, OWNED THIS PROPERTY PRIOR TO 1.4.1981, THE INDEXED COST OF ACQUISITION WAS RIGHTLY CLAIMED BY THE ASSESSEE AS ON 1.4.1981. THE ACTION OF THE AO IN TAKING THE COST OF ACQUISITION AS IN MARCH, 1 995 IS NOT JUSTIFIED. IN THESE FACTS, WE HOLD THAT THE ACTION OF THE CIT( A) IN DIRECTING THE AO TO RE-COMPUTE THE LONG TERM CAPITAL GAIN ON THE BASIS OF THE INDEXED COST OF ACQUISITION AS ON 1.4.1981 IS IN AC CORDANCE WITH THE STATUTORY PROVISIONS OF THE IT ACT, AND ACCORDINGLY , THE ORDER OF THE CIT(A) IS CONFIRMED AND THE GROUND OF THE APPEAL OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD