Shri Sohanlal Sakaria, CHENNAI V. ITO, CHENNAI

ITA 2369/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4326 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 02-05-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 18-08-2016
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Deemed Gift on Purchase of immovable Property below Jantri value; Gift; Cost of acquisition

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI , ! ' ! # . $% & '( BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.2369/MDS./2016 / ASSESSMENT YEAR :2013-14 SHRI SOHANLAL SAKARIA , 3,GENGURAMAN STREET, CHENNAI-600 003. VS. THE ITO, INTERNATIONAL TAXATION 2(2), CHENNAI 600 034. [PAN ARCPS 5195 D ] ( )* / APPELLANT) ( +,)* /RESPONDENT) / APPELLANT BY : MR.S.SRIDHAR, ADVOCATE /RESPONDENT BY : MR.SUPRIYO PAL, JCIT, DR / DATE OF HEARING : 0 2 - 05 - 2017 / DATE OF PRONOUNCEMENT : 02.06 - 2017 - / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-16, CHENNA I DATED 04.05.2016 PERTAINING TO ASSESSMENT YEAR 2013-14. 2. THE ASSESSEE HAS RAISED ONLY SUBSTANTIVE GROUND IS WITH REGARD TO FINDINGS OF LD.CIT(A) THAT DATE OF INDEXA TION IS FROM THE DATE ITA NO.2369/MDS./16 :- 2 -: ON WHICH THE PROPERTY DEVOLVED ON THE ASSESSEE AND NOT THE DATE ON WHICH IMMEDIATE PREVIOUS OWNER FIRST HELD THE ASSET . 3. THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE AN D HIS BROTHER RECEIVED A GIFT OF IMMOVABLE PROPERTY AT PURASAWALK AM, CHENNAI FROM THEIR MOTHER THROUGH SETTLEMENT DEED DATED 01.03.20 02 AND THE SAID PROPERTY WAS SOLD ALONG WITH HIS BROTHER FOR A CONS IDERATION OF 15.20 CRORES, ASSESSEES SHARE BEING 7.60 CRORES, ON WHIC H LTCG WAS ADMITTED AT 6,74,22,758/-. SINCE THIS IS A GIFT BY MOTHER TO ASSESSEE, THE ASSESSEE CLAIMED INDEXATION BENEFIT FROM 01.04. 1981 AS PROVIDED IN SEC.2(42A) OF THE ACT R.W.S 49(1)(II) OF THE ACT AND SEC.48 EXPLANATION (III) WHICH WAS DENIED BY THE AO. THE L D. ASSESSING OFFICER CONSIDERED THE DATE ON WHICH I.E.01.03.2002 THE ASS ESSEE BECAME THE OWNER OF THE PROPERTY. AGGRIEVED BY THE ACTION OF T HE LD. ASSESSING OFFICER, THE ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A). ON APPEAL, LD.CIT(A) CONCURRED WITH THE FINDINGS OF TH E AO AND UPHELD THE SAME. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. SIMILAR ISSUE CAME FOR CONSIDERATION BEFORE THIS TRIBUNAL IN THE CASE OF MR.RAMALINGAM BALAJI VS. DCIT IN ITA NO.86/ MDS./2016 FOR ASSESSMENT YEAR 2011-12 VIDE ORDER DATED 24.03.2016 WHEREIN HELD AS FOLLOWS:- ITA NO.2369/MDS./16 :- 3 -: 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND JUDICIAL DECISION CITED. THE LD.A.R HAS EMPHASIZED ON THE DISPUTED ISSUE ON HOLDING PERIOD OF THE ASSESSEE ON WHOM THE ASSETS ARE DEVOLVED ON THE DEATH OF ASSESSEES FATHER, THE PRO VISIONS OF SECTIONS 48 & 49(I) OF THE ACT ALLOW SPECIAL MODE OF TRANSFER IN GIFT AND SUCCESSION. THE ACTION OF THE AO THAT THE PROPERTY WAS ACQUIRED BY ASSESSEES FATHER AND NOT INHERITED AS PER THE PROVISIONS OF THE ACT CANN OT BE ACTED UPON WERE ASSESSEE BECAME A RIGHTFUL OWNER AS PER EXPLANATIO N 1(I)(B) TO SECTION 2(42A) OF THE ACT AND IN THE PRESENT CASE, ASSESSEE DEEMED TO HOLD THE PROPERTY AS ON 1981 AND INDEXED COST OF ACQUISITION HAS TO BE CALCULATED FROM 01.04.1981 WITH THE BASE YEAR AS 100. THE ASSE SSEES FATHER ACQUIRED PROPERTY IN 1965-66 ALONG WITH HIS BROTHERS AND ON PARTITION IN 1979, HE BECAME THE ABSOLUTE OWNER OF ENTIRE ASSET AND ASSES SEE HAS COMPLIED WITH THE CONDITIONS OF THE PREVIOUS OWNER AS ON 01.04.1 981 AND RIGHTFULLY CLAIMED THE COST IN INFLATION INDEXATION FROM THE B ASE YEAR I.E. 01.04.1981 AND THE ARGUMENTS OF THE LD.A.R ARE SUPPORTED BY T HE DECISION OF CO- ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ITO VS. SHRI SYED ALI SHIRAZHI IN ITA NO.1998/MDS./2014 VIDE ORDER DATED 30.10.201 4 FOLLOWING THE DECISION OF SPECIAL BENCH IN THE CASE OF MANJULA J SHAH VS. DCIT (2009) 318 ITR (AT) 417, WHICH HAS BEEN CONFIRMED BY THE HONBLE BOMBAY HIGH COURT REPORTED IN (2013) 355 ITR 474. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MANJULA J.SHAH (SUPRA) HELD THA T WHEN THE ASSESSEE SELLS HIS IMMOVABLE PROPERTY WHICH IS ACQUIRED UNDE R GIFT OR WILL, WHILE COMPUTING THE CAPITAL GAIN THE INDEX COST OF ACQUIS ITION HAS TO BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH PREVIOUS OWNER FIRST HELD THE ASSET AND NOT THE YEAR IN WHICH THE ASSESSEE BECAME THE OWNER OF THE ASSET. ITA NO.2369/MDS./16 :- 4 -: THEREFORE, THE RATIO OF THIS DECISION IS SQUARELY A PPLICABLE TO THE FACTS OF THE PRESENT CASE OF THE ASSESSEE. 6. RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDIN ATE BENCH, WE DIRECT THE AO TO ALLOW THE COST INFLATION INDEXATION TO THE AS SESSEE FROM 01.04.1981FOR COMPUTATION OF CAPITAL GAINS. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . 5. ACCORDINGLY, WE ARE INCLINED TO DECIDE THE APPE AL IN FAVOUR OF THE ASSESSEE ON SIMILAR LINE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED ON 02 ND JUNE, 2017, AT CHENNAI. SD/ - SD/ - ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) & / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER () / CHENNAI *+ / DATED: 02 ND JUNE, 2017. K S SUNDARAM +,-- ./-0/ / COPY TO: - 1 . / APPELLANT 4. - 1 / CIT 2. / RESPONDENT 5. /23- 4 / DR 3. - 1-!' / CIT(A) 6. 3&-5 / GF