ITO, CHENNAI V. K.Ranjan, CHENNAI

ITA 2750/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90417 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 27-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 05-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Gift; Cost of acquisition

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . , ! , ' #$ % [BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER] ./ I.T.A.NO.2750/MDS/2014 / ASSESSMENT YEAR : 2007-08 THE INCOME TAX OFFICER BUSINESS WARD II(3) CHENNAI VS. SHRI K. RANJAN FLAT NO.C-2, II FLOOR, OLD NO.11 NEW NO.23, RAMAN STREET T. NAGAR, CHENNAI 600 017 [PAN AAIPR 0736 N] ( &' / APPELLANT) ( !(&' /RESPONDENT) / APPELLANT BY : DR. B. NISCHAL, JCIT /RESPONDENT BY : SHRI R. VIJAYARAGHAVAN, ADVOCATE / DATE OF HEARING : 27-05-2015 ! / DATE OF PRONOUNCEMENT : 29-05-2015 ) / O R D E R PER D. KARUNAKARA RAO, ACCOUNTANT MEMBER: THIS IS THE APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-I, CHENNAI, DATED 28.7.2014, FOR THE ASSESSMENT YEAR 2007-08. 2. THE ONLY ISSUE RAISED IN THE GROUNDS OF APPEAL RELA TES TO INDEXED COST OF ACQUISITION OF THE ASSET. THE AS SESSEE CLAIMS THAT FOR ITA NO.2750/14 :- 2 -: THE PURPOSE OF COMPUTATION OF CAPITAL GAINS QUA THE INDEXED COST OF ACQUISITION, THE YEAR OF ACQUISITION BY THE PREVIOU S OWNER HAS TO BE TAKEN INTO CONSIDERATION. ON THE OTHER HAND, TH E ASSESSING OFFICER WAS OF THE OPINION THAT THE YEAR OF ACQUISITION OF THE PROPERTY BY THE ASSESSEE BECOMES RELEVANT. 3. BEFORE US, AT THE OUTSET, THE LD. COUNSEL FOR THE A SSESSEE BROUGHT OUR ATTENTION TO PARA 5 OF THE IMPUGNED OR DER AND SUBMITTED THAT THE CIT(A) EXAMINED THE LEGAL POSITION AND ANA LYZED THE APPLICABILITY OF THE DECISION OF SPECIAL BENCH OF T HE MUMBAI TRIBUNAL IN THE CASE OF THE DY. CIT VS MANJULA J. SHAH[2009] 12 6 TTJ 145, WHICH WAS FINALLY APPROVED BY THE HON'BLE BOMBAY HIGH COU RT 355 ITR 474 AND EVENTUALLY HELD IN FAVOUR OF THE ASSESSEE. TH E RATIO OF THE DECISION IS THAT FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS, WITH REFERENCE TO INDEXED COST OF ACQUISITION, THE YEAR OF ACQUISITION BY THE PREVIOUS OWNER HAS TO BE TAKEN INTO CONSIDERATION A ND NOT THE YEAR IN WHICH THE ASSESSEE ACQUIRED THE PROPERTY AS GIFT F OR THE PURPOSE OF BASE YEAR (PARA 5.2.2 OF THE CIT(A)S ORDER). 4. THE UNDISPUTED FACTS IN THIS CASE INCLUDES THAT TH E ASSET WAS ORIGINALLY OWNED BY THE ASSESSEES GRANDMOTHER PRI OR TO 1.4.1981 AND CONSEQUENTLY THE FINANCIAL YEAR 1981-82 IS CORR ECTLY TAKEN BY THE ASSESSEE FOR THE PURPOSE OF INDEXED COST OF ACQUI SITION. THE ITA NO.2750/14 :- 3 -: REVENUES INITIATIVE TO THRUST ON THE ASSESSEE THE COST OF INFLATION INDEX RELEVANT TO FINANCIAL YEAR 1994-95 IS NOT VAL ID IN VIEW OF THE JUDGMENT IN THE CASE OF MANULA J SHAH(SUPRA). FOR T HE PURPOSE OF COMPLETENESS OF THIS ORDER, RELEVANT PARA 5.2.2 OF THE IMPUGNED ORDER IS EXTRACTED AS UNDER: 5.2.2 RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY HON'BLE SPECIAL BENCH, IT IS HELD THAT FOR THE PURPOSE OF CO MPUTATION OF CAPITAL GAINS, THE YEAR OF ACQUISITION BY THE PR EVIOUS OWNER HAS TO BE TAKEN INTO CONSIDERATION AND NOT THE YEAR IN WHICH THE ASSESSEE HAS ACQUIRED THE PROPERTY AS GIFT FOR THE PURPOSE OF BASE YEAR AND ALSO FOR THE PURPOSE OF IN FLATION INDEX. SINCE THE SAID PROPERTY WAS ORIGINALLY ACQUI RED BY APPELLANTS GRANDMOTHER PRIOR TO 1.4.1981, THE YEAR 1981 -82 SHOULD BE TAKEN AS COST OF INDEX VALUE. ACCORDINGL Y, THE A.O IS DIRECTED TO ADOPT COST INFLATION INDEX APPLICABL E FOR F.Y 1981-82 INSTEAD OF F.Y 1994-95 TAKEN BY HIM. THE GROUND IS ALLOWED. 5. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT T HE ORDER OF THE CIT(A) ON THE ISSUE UNDER CONSIDERATION IS F AIR AND REASONABLE. WE AFFIRM THE SAME. ACCORDINGLY, THE GROUNDS RAIS ED BY THE REVENUE ARE DISMISSED. ITA NO.2750/14 :- 4 -: 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH OF MAY, 2015, AT CHENNAI. SD/- SD/- ( ! ) (CHALLA NAGENDRA PRASAD) ' / JUDICIAL MEMBER ( . ) (D. KARUNAKARA RAO) / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED: 29 TH MAY, 2015 RD %& '()( / COPY TO: 1 . / APPELLANT 4. * / CIT 2. / RESPONDENT 5. (+, - / DR 3. *./ / CIT(A) 6. ,01 / GF