The ITO, Ward-10(3), Ahmedabad V. Shri Janak Chintan Desai, Ahmedabad

ITA 2355/AHD/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1241 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 19-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Keywords: Cost of acquisition

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD - , , BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ I.T.A.NO.2355/AHD/2012 ( / ASSESSMENT YEAR : 2009-10) INCOME TAX OFFICER WARD-10(3) AHMEDABAD / VS. JANAK CHINTAN DESAI BUNGALOW NO.4, PART-2 NISHANT, OPP.NEHA PARK SOC. JODHPUR, AHMEDABAD-380 015 $ ./ ./ PAN/GIR NO. : AMUPD 8500 G ( $' / APPELLANT ) .. ( ()$' / RESPONDENT ) $' * / APPELLANT BY : SHRI NARENDRA SINGH, SR.DR ()$' + * / RESPONDENT BY : SHRI TUSHAR P.HEMANI, AR ,- + . / DATE OF HEARING 05/11/2015 /0 + . / DATE OF PRONOUNCEMENT 23/11/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-XVI, AHMEDAB AD [CIT(A) IN SHORT] DATED 16/07/2012 PERTAINING TO ASSESSMEN T YEAR (AY) 2009-10. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- ITA NO.2355 /AH D/2012 ITO VS. JANAK CHINTAN DESAI ASST.YEAR 2009-10 - 2 - (1) THE LD.CIT(A) HAS ERRED IN LAW AND ON FAC TS IN GRANTING THE BENEFIT OF AVAILING INDEXED COST OF ACQUISITION OF THE PROPERTY LOCATED AT 101, VALKESHWAR ROAD, MALABAR HILL, MUMBAI, AS WAS ACQUIRED BY THE PREVIOUS OWNER WHEREAS SUCH ASSET WAS ACTUALLY ACQU IRED BY THE ASSESSEE IN THE F.Y.2007-08. (2) THE LD.CIT(A) HAS ERRED IN LAW AND ON FAC TS IN NOT TAKING INTO CONSIDERATION THE FACT THAT, THE ASSESSEE DID NOT F URNISH BEFORE THE ASSESSING OFFICER THE NECESSARY DOCUMENTARY EVIDENC ES TO CORROBORATE THE DATE OF ACQUISITION OF THE PROPERTY IN QUESTION SO AS TO ARRIVE AT THE CORRECT INDEXED COST OF ACQUISITION FOR THE PURPOSE OF COMPUTATION OF LONG TERM CAPITAL GAINS. (3) THE LD.CIT(A) HAS FURTHER ERRED IN LAW AN D ON FACTS INASMUCH AS, HE FAILED TO CONSIDER THAT THE ORAL FAMILY ARRA NGEMENT BETWEEN THE FAMILY MEMBERS WAS MADE ON 01/01/2008. PRIOR TO SUC H ORAL FAMILY ARRANGEMENT, THE PORTION OF SHARE TO THE ASSESSEE I N THE PROPERTY AS AT THAT DATE I.E. 01/01/2008 WAS NOT ASCERTAINED. HOWE VER, PATENTLY BY VIRTUE OF THE ORAL FAMILY ARRANGEMENT REDUCED IN WR ITING VIDE AGREEMENT DATED 01/05/2008; SHARE OF 3.11% HAD COME INTO EXISTENCE IN THE HANDS OF THE ASSESSEE IN RESPECT OF THE PROPERT Y IN QUESTION. (4) THE LD.CIT(A) HAS ERRED IN LAW AND ON FAC TS IN NOT CONSIDERING THE PROVISIONS OF SEC.48(III) R.W.S. 49 OF THE ACT FOR TAKING THE CORRECT FACTOR OF INDEXED COST OF ACQUISITION FOR THE PURPO SE OF COMPUTATION OF LONG TERM CAPITAL GAINS. (5) ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. (6) IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND THAT OF THE ORDER OF THE ASSESSING OFFICE R BE RESTORED TO THE ABOVE EXTENT. ITA NO.2355 /AH D/2012 ITO VS. JANAK CHINTAN DESAI ASST.YEAR 2009-10 - 3 - 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 29/11/2011. WHILE FRAMING THE ASSESSMENT, THE ASSESSING OFFICE R (AO IN SHORT) ADOPTED THE INDEX COST OF ACQUISITION FOR THE FINANCIAL YEAR (FY) 2007-08 INSTEAD OF AS ON 01/04/1981 AND THEREB Y MADE ADDITION OF RS.24,74,246/-. THE ASSESSEE BEING AGGRIEVED BY TH E ASSESSMENT ORDER, PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS AND RELYING ON THE DECISION OF THE SPE CIAL BENCH RENDERED IN THE CASE OF DY. CIT VS. MANJULA J.SHAH REPORTED AT (2010) 35 SOT 105 (MUM.) (SPECIAL BENCH), JUDGEMENT OF HONBLE HI GH COURT OF BOMBAY RENDERED IN THE CASE OF CIT VS. MANJULA J.SH AH REPORTED AT (2012) 204 TAXMAN 691/16 TAXMANN.COM 42 (BOM.) AND JUDGEMENT OF HONBLE HIGH COURT OF GUJARAT RENDERED IN THE CASE OF CIT VS. GAUATAM MANUBHAI AMIN REPORTED AT (2013) 38 TAXMANN.COM 42 (GUJARAT), DELETED THE ADDITION. AGGRIEVED BY THE ORDER OF THE LD.CIT( A), NOW THE REVENUE IS IN APPEAL BEFORE US. 3. THE ONLY ISSUE IN THIS APPEAL TO BE DECIDED IS W HETHER THE LD.CIT(A) WAS JUSTIFIED IN DIRECTING THE AO TO ADOP T THE INDEXED COST OF ACQUISITION FOR COMPUTATION OF LONG TERM CAPITAL GA IN (LTCG) AS ON 01/04/1981 INSTEAD OF FY 2007-08. ITA NO.2355 /AH D/2012 ITO VS. JANAK CHINTAN DESAI ASST.YEAR 2009-10 - 4 - 4. THE LD.SR.DR SUPPORTED THE ORDER OF THE AO AND S UBMITTED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN DIRECTING THE AO TO ADOPT THE INDEXED COST OF ACQUISITION AS ON 01/04/1981 INSTEAD OF FY 2007- 08. THE LD.SR.DR SUBMITTED THAT THE AO HAS GIVEN FINDING THAT THE PR OPERTY WAS ACQUIRED BY WAY OF FAMILY SETTLEMENT AS ON 01/01/2008. 4.1. ON THE CONTRARY, THE LD.COUNSEL FOR THE ASSESS EE SUPPORTED THE ORDER OF LD.CIT(A) AND SUBMITTED THAT THE ISSUE IS SQUARE LY COVERED IN FAVOUR OF ASSESSEE. HE SUBMITTED THAT THE AO MISDIRECTED HIM SELF BY OBSERVING THAT THE ASSESSEE HAS ACQUIRED THE PROPERTY ONLY ON THE DATE OF FAMILY SETTLEMENT WAS EXECUTED, I.E. ON 01.01.2008. HE SU BMITTED THAT IN THE CONVEYANCE-DEED AND DEED OF FAMILY ARRANGEMENT, THE ASSESSEE IS SON OF MRS.PRITI DESAI WHO IS GRAND-DAUGHTER OF LATE MR .N.R.PANDYA. THE ASSESSEE HAS NOT PAID ANY AMOUNT TO ANYBODY FOR BUY ING THE RIGHT IN THE PROPERTY, OR HAS HE ACQUIRED THE PROPERTY AS STATED BY THE AO. HE WAS ALLOTTED SHARE IN THE PROPERTY AS HE IS SON OF GRAN D-DAUGHTER OF LATE MR.N.R.PANDYA. THEREFORE, THE AO WAS NOT JUSTIFIE D IN ADOPTING THE INDEXED COST OF ACQUISITION FOR FY 2007-08. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE CASE-LAWS RELIED UPON BY THE LD.COU NSEL FOR THE ASSESSEE. THE REVENUE HAS NOT CONTROVERTED THE FACT THAT THE PROPERTY WAS INHERITED BY THE ASSESSEE AND THE LD.SR.DR COULD NOT CONTROVE RT AS TO HOW THE RATIO LAID DOWN BY THE MUMBAI ITAT SPECIAL BENCH IN THE C ASE OF DCIT VS. ITA NO.2355 /AH D/2012 ITO VS. JANAK CHINTAN DESAI ASST.YEAR 2009-10 - 5 - MANJULA J.SHAH(SUPRA), THE HONBLE HIGH COURT OF B OMBAY IN THE CASE OF CIT VS. MANJULA J. SHAH(SUPRA) AND THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF CIT VS. GAUTAM MANUBHAI AMIN (SUPRA) IS NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. UNDER THESE FACTS, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE L D.CIT(A) ON THIS ISSUE, SAME IS HEREBY UPHELD. THUS, GROUNDS RAISED IN TH E REVENUES APPEAL ARE REJECTED. 6. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED . ORDER PRONOUNCED IN THE COURT ON MONDAY, THE 23 RD DAY OF NOVEMBER, 2015 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( MANISH BORAD ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 23/ 11 /2015 4..., ,.../ T.C. NAIR, SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ()$' / THE RESPONDENT. 3. 56 7 / CONCERNED CIT 4. 7 ( ) / THE CIT(A)-XVI, AHMEDABAD 5. 8,9 (56 , . 560 , / DR, ITAT, AHMEDABAD 6. 9;< =- / GUARD FILE. / BY ORDER, )8 ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD