Indira Sivaprasad, CHENNAI V. ITO, CHENNAI

ITA 2863/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7682 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 04-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V NANDA KUMAR
• Keywords: Cost of acquisition; Fair market value

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO. 2863/MDS/2016 / ASSESSMENT YEAR : 2013-14 SMT. INDIRA SIVAPRASAD, RUDRA PRASADA, 93, V.M. STREET, MYLAPORE, CHENNAI - 600004. PAN : ABAPI0449N V. THE INCOME TAX OFFICER, INTERNATIONAL TAXATION 1, CHENNAI. ( /APPELLANT) ( !' /RESPONDENT) & ./ ITA NO. 2864/MDS/2016 / ASSESSMENT YEAR : 2013-14 SHRI RAHUL KONDAGUNTA SIVAPRASAD, RUDRA PRASADA, 93, V.M. STREET, MYLAPORE, CHENNAI - 600004. PAN : EIWPS7567A V. THE INCOME TAX OFFICER, INTERNATIONAL TAXATION 2, CHENNAI. ( /APPELLANT) ( !' /RESPONDENT) # /APPELLANT BY : SHRI VEPA KRISHNA, FCA !' # /RESPONDENT BY : SHRI V. NANDA KUMAR , JCIT # /DATE OF HEARING : 29.12.2016 # /DATE OF PRONOUNCEMENT : 28.02.2017 2 I.T.A. NO.2863/MDS/2016 & I.T.A. NO.2864/MDS/2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : BOTH THE APPEALS OF THE ASSESSEE ARE DIRECTED AGAIN ST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-16, CHENNAI DATED 29.07.2016 AND PERTAINS TO THE ASSESS MENT YEAR 2013-14. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN BOTH THE APPEALS, WE HEARD THE SAME TOGETHER AND DISPOSING OFF THE SAME BY THIS COMMON ORDER. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DETERMINATION OF FAIR MARKET VALUE FOR THE PURPOSE OF CAPITAL GAIN. 2. SHRI VEPA KRISHNA, THE LD. REPRESENTATIVE FOR TH E ASSESSEE SUBMITTED THAT THE ASSESSEES ARE MEMBERS OF THE JOI NT FAMILY AND RECEIVED THE SUBJECT PROPERTY ON A PARTITION WHICH TOOK PLACE ON 01.05.2012 AND ACCORDINGLY ADAPTED THE INDEXED COST OF ASSET AS ON 01.04.1981. PLACING RELIANCE ON THE JUDGMENT OF THE BOMBAY HIGH COURT IN CIT V MANJULA J SHAH (2013) 355 ITR 472, THE LD. REPRESENTATIVE SUBMITTED THAT EVEN THOUGH THE ASSESSEE INHERITED T HE PROPERTY AND OBTAINED A SPECIFIC SHARE ON A PARTITION WHICH TOOK PLACE ON 01.05.2012, IT CANNOT BE SAID THAT THE ASSESSEE HAS ACQUIRED THE P ROPERTY. THE PROPERTY WAS RECEIVED BY THE ASSESSEE ONLY BECAUSE OF INHERITANCE FROM THE PARENTS. THEREFORE, THE COST OF INDEXATION HAS TO BE ADOPTED FROM THE YEAR IN WHICH THE ASSESSEES FATHER ACQUIRED THE PRO PERTY. THEREFPRE THE 3 I.T.A. NO.2863/MDS/2016 & I.T.A. NO.2864/MDS/2016 CIT (APPEALS) IS NOT JUSTIFIED IN CONFIRMING THE OR DER OF THE ASSESSING OFFICER. 3. ON THE CONTRARY, SHRI V. NANDA KUMAR, THE LD. DE PARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEES HAVE BE CAME THE OWNER OF THE PROPERTY ON 01.05.2012, WHEN THE PARTITION TOOK PLACE BY MEANS OF A SETTLEMENT DEED. THEREFORE, THE ASSESSING OFFICER AND THE CIT (APPEALS) HAVE RIGHTLY FOUND THAT COST INFLATION INDEX HAS TO BE ADOPTED FROM THE FINANCIAL YEAR 2012-13. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AN IDENTI CAL ISSUE WAS CONSIDERED BY THE BOMBAY HIGH COURT IN THE CASE OF MANJULA J SHAH ( SUPRA) . THE BOMBAY HIGH COURT FOUND THAT WHEN THE PROPER TY WAS INHERITED, THE COST OF INDEXATION HAS TO BE ADOPTED FROM THE YEAR IN WHICH THE PREVIOUS OWNER ACQUIRED THE PROPERTY. INHERITA NCE OF PROPERTY AND THE ALLOTMENT OF SPECIFIC SHARE ON A PARTITION BY M EANS OF FAMILY SETTLEMENT CANNOT BE CONSTRUED AS A TRANSFER OF PRO PERTY. HENCE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN HOLDING THAT THE ASSESSEE ACQUIRED THE PROPERTY ONLY ON 01.05.2012, WHEN THE SPECIFIC SHARE OF THE PROPERTY WAS ALLOTTED TO THE ASSESSEE. BY RESPECTFULLY FOLL OWING THE JUDGMENT OF THE BOMBAY HIGH COURT IN THE CASE OF MANJULA J SHAH ( SUPRA), THIS 4 I.T.A. NO.2863/MDS/2016 & I.T.A. NO.2864/MDS/2016 TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE INDE XED COST OF ACQUISITION HAS TO BE ADOPTED FROM THE YEAR IN WHICH THE PREVIO US OWNER ACQUIRED THE PROPERTY. THEREFORE, WE ARE UNABLE TO UPHOLD T HE ORDERS OF BOTH THE AUTHORITIES BELOW. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ADOPT THE COST INFLATION INDEX FROM THE YEAR IN WHICH THE PREVIOUS OWNER ACQUIRED THE PROPERTY. 6. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEES STANDS ALLOWED. ORDER PRONOUNCED ON 28 TH FEBRUARY, 2017 AT CHENNAI. SD/- SD/- ( . . ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) /ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, /DATED, THE 28 TH FEBRUARY, 2017. JR. # ! $ % $ /COPY TO: 1. /APPELLANTS 2. !' /RESPONDENT 3. &' ( )/CIT(A)-16, CHENNAI 4. &' /CIT 5. ! $ /DR 6. () /GF.