Shri Bindiganavale Ravi , Bangalore V. Deputy Commissioner of Income Tax Circle-5(2)(1), Bangalore

ITA 2959/BANG/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9450 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 8 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 28-07-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 31-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Capital asset; Rule of consistency; Question of law; Cost of acquisition; Fair market value; Revised return; Capital Gains
• Section: 48; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER IT A NO . 2959/BANG/2018 ASSESSMENT YEAR : 2015 - 16 SHRI BINDIGANAVALE RAVI, B-3042, KREST PART APTS., 36, KANAKAPURA ROAD, BENGALURU 560 034. PAN: BFFPR 5573E VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 5(2)(1), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SMT. R. P RATHIBA, ADVO CATE RESPONDENT BY : SHRI PRIYADARSHI MISHRA, A DDL. C IT(DR)(ITAT ), BENGALURU. DATE OF HEARING : 28 . 0 7 .2021 DATE OF PRONOUNCEMENT : 29 .0 7 .202 1 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(APPEALS) DATED 22.8.2018 FOR THE ASSESSMENT YEA R 2015-16. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1) THE LEARNED CIT( A) ERRED IN PASSING THE ORDER IN THE MANNER WHICH HE DID. 2) THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDIT ION OF RS. 42,28,768/- AS CAPITAL GAIN WITHOUT APPRECIATIN G THE SUBMISSION OF THE APPELLANT. ITA NO.2959/BANG/2018 PAGE 2 OF 16 3) THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THA T THE AGREEMENT TO SELL THE UNDIVIDED SHARE AND ALSO THE AGREEMENT FOR DETERMINATION OF VALUE OF THE PROPERTY WERE EXECUTE D ON 09.06.2006 AND THE APPELLANT HAD CONSTRUCTIVE POSSE SSION OF THE LAND FROM THAT DATE AS CONTEMPLATED UNDER SECTION 5 3A OF THE TRANSFER OF PROPERTY ACT READ WITH SECTION 2(47)(V) OF THE IT ACT AND THE CONSTRUCTION OF THE APARTMENT WAS FOR AND O N BEHALF OF THE APPELLANT FOR WHICH THE COST WAS INCURRED FROM TIME TO TIME AS PER THE SCHEME OF PAYMENT PROVIDED IN THE AGREEMENT AND ACCORDINGLY THE APPELLANT HAD RIGHTLY COMPUTED THE COST INFLATION INDEX WHILE COMPUTING THE CAPITAL GAIN AN D THE SAME SHOULD HAVE BEEN ACCEPTED. 4) THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE APARTMENT WAS CONSTRUCTED ON BEHALF OF THE APPELLANT AND IT W AS NOT A CASE OF PURCHASE WHEN THE PROPERTY STOOD REGISTERED. 5) THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THA T THE APARTMENT WAS DEEMED TO HAVE BEEN HELD BY THE APPEL LANT FROM THE DATE OF EXECUTION OF JOINT DEVELOPMENT AGREEMEN T (JDA) WHICH HAS BEEN HONORED AND THE PAYMENT SCHEDULE HAS BEEN MADE ACCORDINGLY WITHOUT DEFAULT AND CONSEQUENTLY T HE APARTMENT IS DEEMED TO HAVE BEEN HELD BY THE APPELLANT FROM 0 9.06.2006 AND THE COST INFLATION INDEX AS COMPUTED BY THE APP ELLANT WAS CORRECT AND COMPLETE AND THE IMPUGNED DISALLOWANCE AS MADE BY THE CIT(A) IS OPPOSED TO LAW AND LIABLE TO BE DELET ED. 6) THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THA T THERE ARE JUDICIAL PRECEDENCE SUPPORTING THE CLAIM OF THE APPELLANT AND HE OUGHT TO HAVE ACCEPTED THE EXPLANATION AND REFRA INED FROM DISALLOWING THE CLAIM OF THE APPELLANT. 7) THE LEARNED CIT(A) OUGHT TO HAVE ALLOWED THE COS T OF IMPROVEMENT OF RS.5,72,000/- CLAIMED BY THE APPELLA NT. 8) THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THA T THOUGH BILLS WERE NOT PROVIDED, THE APPELLANT HAD GIVEN CO RROBORATIVE EVIDENCE AND THE COST OF IMPROVEMENT CLAIMED WAS AL SO IN ACCORDANCE WITH THE FAIR MARKET VALUE AND NO INFLAT ION COULD BE CONTEMPLATED TO JUSTIFY THE DISALLOWANCE AS MADE. ITA NO.2959/BANG/2018 PAGE 3 OF 16 9) THE LEARNED CIT(A) OUGHT TO HAVE ACCEPTED THE EXPLANATION OFFERED BY THE APPELLANT AND REFRAINED FROM DISALLOWING THE COST OF IMPROVEMENT AS CLAIMED BY T HE APPELLANT. 10) WITHOUT PREJUDICE, THE ADDITION AS CONFIRMED BY THE LEARNED CIT(A) IS ARBITRARY, EXCESSIVE AND OUGHT TO BE DELETED IN TOTO. 11) THE LEARNED CIT(A) ERRED IN CONFIRMING INTEREST UNDER SECTION 234D OF THE ACT. 12) FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE UR GED AT THE TIME OF HEARING, THE APPELLANT PRAYS THAT THE APPEA L MAY BE ALLOWED. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE DURI NG THE RELEVANT YEAR HAS SOLD A RESIDENTIAL PROPERTY FOR A CONSIDERATION OF RS. 2,01,24,000 VIDE SALE DEED DATED 23.06.2014 AND COMPUTED THE LONG TE RM CAPITAL GAIN AT RS. 41,08,845 AND OFFERED THE SAME FOR TAXATION. THE P ROPERTY SOLD WAS AN APARTMENT CONSTRUCTED BY BRIGADE ENTERPRISES PVT LT D. IN PURSUANCE OF THE AGREEMENT EXECUTED ON 29.06.2006 SUBSEQUENTLY A SAL E DEED WAS EXECUTED ON 17.05.2010 IN ACCORDANCE WITH THE AGREE MENT DATED 09.06.2006 THE LAND VALUE WAS FIXED AT RS. 17,20,00 0 AND CONSTRUCTION VALUE WAS FIXED AT RS. 43,35,800. IN ADDITION THE APPELLANT HAD TO PAY TOWARDS VAT SERVICE TAX AND ALSO FOR ALL OTHER CHAR GES PAYABLE. THUS THE TOTAI COST INCURRED WAS RS. 7,72,4934 BESIDES STAMP DUTY CHARGES AND REGISTRATION CHARGES TOTALING TO RS.8034964. THE C ONSIDERATION WAS PAID BETWEEN 31 ST JANUARY 2006 AND 5' MAY 2010. THE COST OF IMPROVEME NT OF RS. 1,10,080 WAS PAID ON 14.08.2010 AND WHILE COMPU TING THE CAPITAL GAIN THE APPELLANT HAS TAKEN THE COST INFLATION INDEX ON THE RATES PROVIDED FOR THE YEAR 2006 ONWARDS AND THE COST INFLATION INDEX WAS PROPORTIONATELY DETERMINED ON THE DATES OF PAYMENT MADE. THUS THE APPELLANT DETERMINED THE COST AS INFLATED BY INDEXED COST AT RS. 1,58,00 ,924. ALSO THE IMPROVEMENT COST OF RS. 11000 WAS INFLATED TO RS. 1 ,32,303 AND THUS THE ITA NO.2959/BANG/2018 PAGE 4 OF 16 NET CAPITAL GAIN OF RS. 41,08,845 WAS OFFERED FOR T AXATION. THE ASSESSEE ALSO CLAIMED DEDUCTION FOR THE IMPROVEMENT MADE TO THE INTEREST FOR EXPENDITURE OF RS. 5,72,000 WAS INCURRED. 4. THE AO HOWEVER DID NOT ALLOW THE CLAIM OF COST O F IMPROVEMENT BY WAY OF INTERIORS ON THE GROUND THAT THE APPELLANT D ID NOT PRODUCE BILLS EVEN THOUGH THE PARTICULARS OF IMPROVEMENT MADE, THE PER SON WHO HAD CARRIED OUT THE IMPROVEMENT AND DETAILS OF CHEQUE PAYMENTS MADE TO HIM WERE PROVIDED. FURTHER THE AO DETERMINED THE INFLATED C OST ONLY FROM THE DATE OF REGISTRATION OF SALE DEED I.E., 17.05.2010 AND CONS EQUENTLY ARRIVED AT CAPITAL GAIN AT RS. 83,37,613 WHICH CAUSED AN ADDIT ION OF RS. 42,28,768 TO THE RETURNED INCOME. 5. BEFORE THE CIT(APPEALS), THE ASSESSEE SUBMITTED THAT THAT THE AGREEMENT TO SELL THE UNDIVIDED SHARE AND ALSO THE AGREEMENT FOR DETERMINATION OF VALUE OF THE PROPERTY WERE EXECUTE D ON 09.06.2006 AND THE APPELLANT HAD CONSTRUCTIVE POSSESSION OF THE LA ND FROM THAT DATE AS CONTEMPLATED UNDER SECTION 53A OF THE TRANSFER OF P ROPERTY ACT READ WITH SECTION 2(47)(V) OF THE IT ACT. THE CONSTRUCTION O F THE APARTMENT WAS FOR AND ON BEHALF OF THE APPELLANT FOR WHICH THE COST W AS INCURRED FROM TIME TO TIME AS PER THE SCHEME OF PAYMENT PROVIDED IN THE A GREEMENT AND ACCORDINGLY THE APPELLANT HAD RIGHTLY COMPUTED THE COST INFLATION INDEX WHILE COMPUTING THE CAPITAL GAIN. FURTHER IT WAS NO T A CASE OF PURCHASE WHEN THE PROPERTY STOOD REGISTERED. THE APARTMENT W AS DEEMED TO HAVE HELD BY THE APPELLANT FROM THE DATE OF EXECUTION OF JOINT DEVELOPMENT AGREEMENT (JDA) WHICH HAS BEEN HONOURED AND THE PAY MENT SCHEDULE HAS BEEN MADE ACCORDINGLY WITHOUT DEFAULT. CONSEQUENTL Y THE APARTMENT IS DEEMED TO HAVE BEEN HELD BY THE APPELLANT FROM 09.0 6.2006 AND THE COST INFLATION INDEX AS COMPUTED BY THE APPELLANT WAS CO RRECT AND COMPLETE AND THE IMPUGNED DISALLOWANCE AS MADE BY THE ASSESSING OFFICER IS OPPOSED ITA NO.2959/BANG/2018 PAGE 5 OF 16 TO LAW AND LIABLE TO BE DELETED. THE ASSESSEE PLAC ED RELIANCE ON THE ITAT DELHI ORDER IN THE CASE OF PRAVEEN GUPTA VS ACIT DATED 13.08.2010 . 6. HOWEVER, THE CIT(APPEALS) WAS OF THE VIEW THAT T HE ASSESSEE HAS PURCHASED THE ASSET ON 17/05/2010, HENCE THE COST O F INDEXATION CAN BE GIVEN FOR THE FINANCIAL YEAR 2010-11 ONLY. THE ASSE SSEE HAS CLAIMED RS.86,06,964/- AS THE COST OF ACQUISITION BUT HAS N OT BEEN ABLE TO SUBSTANTIATE THE FULL CLAIM BUT SUBMITTED THE DOCUM ENTS FOR RS.80,34,964/-. THE ASSESSEE IN HIS REPLY TO SHOW CAUSE NOTICE ALSO HAS MENTIONED THAT HE HAS NOT BEEN ABLE TO LOCATE THE COPIES OF THE BILLS FOR THE AMOUNT OF RS. 5,72,000/-. HENCE COST OF ACQUISITION HAS BEEN REST RICTED TO RS. 80,34,964/. THE INCOME FROM CAPITAL GAINS IS RECOMPUTED AT RS.8 3,37,613/-. HOWEVER IN THE REVISED RETURN OF INCOME DATED 23.09.2015, T HE ASSESSEE HAS DECLARED A CAPITAL GAIN OF RS.41,08,845/- RESULTING IN SHORT COMPUTATION OF RS.42,28,768/-. HENCE, THE SAME WAS ADDED TO THE RE TURNED INCOME AND ASSESSMENT WAS CONCLUDED AFTER ADDITION OF RS.42,28 ,768/-. THE CIT(APPEALS) THEREFORE CONFIRMED THE ORDER OF AO. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE MAIN CONTENTION OF THE LD. COUNSEL FOR THE A SSESSEE IS THAT THE AGREEMENT TO SELL THE UNDIVIDED SHARE AND ALSO THE AGREEMENT FOR DETERMINATION OF THE PROPERTY WERE EXECUTED ON 09.0 6.2006 AND THE APPELLANT HAD CONSTRUCTIVE POSSESSION OF THE LAND F ROM THAT DATE AS CONTEMPLATED U/S. 53A OF THE TRANSFER OF PROPERTY A CT READ WITH SECTION 2(47)(V) OF THE I.T. ACT AND THE CONSTRUCTION OF TH E APARTMENT WAS FOR AND ON BEHALF OF THE ASSESSEE FOR WHICH THE COST WAS INCU RRED FROM TIME TO TIME AS PER THE SCHEME OF PAYMENT PROVIDED IN THE AGREEMENT . ACCORDINGLY THE APPELLANT HAD RIGHTLY COMPUTED THE COST INFLATION I NDEX WHILE COMPUTING THE CAPITAL GAIN. FURTHER IT IS SUBMITTED IT WAS NOT A CASE OF PURCHASE WHEN THE PROPERTY STOOD REGISTERED. THEREFORE, THE APARTMENT WAS DEEMED TO HAVE BEEN HELD BY THE APPELLANT FROM THE DATE OF JDA ON 9.6.2006 ACCORDING TO ITA NO.2959/BANG/2018 PAGE 6 OF 16 WHICH PAYMENTS HAVE BEEN MADE. AS SUCH, COST INFL ATION INDEX AS COMPUTED BY THE APPELLANT WAS CORRECT AND THE IMPUG NED DISALLOWANCE IS LIABLE TO BE DELETED. FURTHER, RELIANCE WAS PLACED ON THE ORDER OF THE TRIBUNAL IN THE CASE OF L. VIVEKANANDA IN ITA NO.1087/BANG/2018 DATED 18.11.2020. 8. THE LD. DR RELIED ON THE ORDERS OF LOWER AUTHORI TIES. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THE CONTENTION OF THE ASSESSEE IS THAT FOR THE PURP OSE OF COMPUTATION OF CAPITAL GAIN, INDEXATION OF COST OF ACQUISITION IS TO BE MADE FROM THE DATE OF INCURRING VARIOUS PAYMENTS FOR THE PURPOSE OF ACQUI SITION OF CAPITAL ASSET WHICH IS SUBJECT MATTER OF CHARGING OF CAPITAL GAIN . HOWEVER, THE LOWER AUTHORITIES CONSIDERED THE DATE OF REGISTRATION OF THE PROPERTY IN FAVOUR OF ASSESSEE I.E., 17.5.2010 AND DETERMINED THE CAPITAL GAIN. IN OUR OPINION, AS DECIDED BY THE TRIBUNAL IN THE CASE OF L. VIVEKANANDA (SUPRA) , THE COST OF ACQUISITION OF ASSESSEE HAS TO BE CONSIDERED FRO M THE DATE OF INCURRING THE EXPENDITURE TO ACQUIRE THE CAPITAL ASSET. THE OBSERVATIONS OF THE TRIBUNAL IN THAT CASE ARE AS FOLLOWS:- 10. `WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERU SED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN THE PRESENT CASE, ASSESSEE GO T ALLOTMENT LETTER FOR SITE NO.S-4, SIDDHARTH LAYOUT, MYSORE ON 20.5.1986. PAYMENT OF CONSIDERATION WAS PAID BY ASSESSEE BY 29 .5.1986 AND THE POSSESSION CERTIFICATE ISSUED BY THE AUTHORITIE S ON 23.6.1998. THE SALE DEED WAS EXECUTED BY MUDA IN FAVOUR OF THE ASSESSEE ON 6.1.2004. THE SAID PROPERTY WAS SOLD BY ASSESSEE ON 9.5.2012. THE ASSESSEES CONTENTION IS THAT FOR THE PURPOSE O F COMPUTATION OF CAPITAL GAIN, INDEXATION COST OF ACQUISITION TO BE MADE FROM THE DATE OF ALLOTMENT OF THE SITE I.E. 20.5.1986. CONTR ARY TO THIS, A.O. CONSIDERED DATE OF GRANT OF POSSESSION CERTIFICATE AS 23.6.1998 TO DETERMINE THE COST OF INFLATION INDEXATION SO AS TO COMPUTE THE CAPITAL GAINS. NOW, THE ISSUE BEFORE US IS WHETHER THE DATE OF ALLOTMENT OF SITE OR DATE OF ISSUE OF POSSESSION CE RTIFICATE TO BE ITA NO.2959/BANG/2018 PAGE 7 OF 16 CONSIDERED TO DETERMINE THE COST OF INFLATION INDEX ATION. THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. A. SURESH RAO 223 TAXMAN 228 (KARN) HAS ANALYSED AND EXPLAINE D AT LENGTH. HONBLE HIGH COURT ANALYSED VARIOUS PROVISI ONS OF THE ACT PERTAINING TO COMPUTATION OF CAPITAL GAIN UNDER VARIOUS SITUATIONS AND ALSO CIRCULARS ISSUED BY THE CBDT ON THIS ISSUE. RELEVANT PORTION OF THE OBSERVATION WHEREIN THE ISS UE BEFORE US HAS BEEN PROPERLY ANALYSED IS REPRODUCED HEREUNDER: 'THE DEFINITION AS CONTAINED IN SECTION 2 (42A) OF THE ACT, THOUGH USES THE WORDS, 'A CAPITAL ASSET HELD AN ASS ESSEE FOR NOT MORE THAN THIRTY-SIX MONTHS IMMEDIATELY PRECEDING THE DATE OF ITS TRANSFER', FOR THE PURPOS E OF HOLDING AN ASSET, IT IS NOT NECESSARY THAT, HE SHOULD BE THE OWNER OF THE ASSET, WITH A REGISTERED DEED OF CONVEYANCE CONFERRING TITLE ON HIM . IN THE LIGHT OF THE EXPANDED DEFINITION AS CONTAINED IN SECTION 2(4 7), EVEN WHEN A SALE, EXCHANGE, OR RELINQUISHMENT OR EXTINGUISHMENT OF ANY RIGHT, UNDER A TRANSACTION TH E ASSESSEE IS PUT IN POSSESSION OF AN IMMOVABLE PROPE RTY OR HE RETAINED THE SAME IN PART PERFORMANCE OF THE CON TRACT UNDER SECTION 53-A OF THE TRANSFER OF PROPERTY ACT, IT AMOUNTS TO TRANSFER. NO REGISTERED DEED OF SALE IS REQUIRED TO CONSTITUTE A TRANSFER. SIMILARLY, ANY TRANSACTIO N WHETHER BY WAY OF BECOMING A MEMBER OF OR ACQUIRING SHARES IN A CO-OPERATIVE SOCIETY, COMPANY OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT OR ANY ARRANGEME NT OR IN ANY OTHER MANNER WHATSOEVER, WHICH HAS THE EF FECT OF TRANSFERRING, OR ENABLING THE ENJOYMENT OF ANY IMMO VABLE PROPERTY, ALSO CONSTITUTES TRANSFER AND THE ASSESSE E IS SAID TO HOLD THE SAID PROPERTY FOR THE PURPOSE OF THE DE FINITION OF 'SHORT-TERM CAPITAL GAIN'. IN FACT, THE CIRCULAR NO.495 MAKES IT CLEAR THAT TRANSACTIONS OF THE NATURE REFE RRED TO ABOVE ARE NOT REQUIRED TO BE REGISTERED UNDER THE REGISTRATION ACT, 1908. SUCH ARRANGEMENTS CONFER TH E PRIVILEGES OF OWNERSHIP WITHOUT TRANSFER OF TITLE I N THE BUILDING AND ARE COMMON MODE OF ACQUIRING FLATS PARTICULARLY IN MULTISTORIED CONSTRUCTIONS IN BIG C ITIES. THE AFORESAID NEW SUBCLAUSES (V) AND (VI) HAVE BEEN INS ERTED IN SECTION 2(47) TO PREVENT AVOIDANCE OF CAPITAL GA INS LIABILITY BY RECOURSE TO TRANSFER OF RIGHTS IN THE MANNER REFERRED TO ABOVE. A PERSON HOLDING THE POWER OF AT TORNEY IS AUTHORIZED THE POWERS OF OWNER, INCLUDING THAT O F MAKING CONSTRUCTION THOUGH THE LEGAL OWNERSHIP IN S UCH ITA NO.2959/BANG/2018 PAGE 8 OF 16 CASES CONTINUES TO BE WITH THE TRANSFEROR. THE INTE NTION OF LEGISLATURE IS TO TREAT EVEN SUCH TRANSACTIONS AS T RANSFERS AND THE CAPITAL GAIN ARISING OUT OF SUCH TRANSACTIO NS ARE BROUGHT TO TAX. FURTHER, THE CIRCULAR NO.4 71 GOES TO THE EXTENT OF CLARIFYING THAT FOR THE PURPOSE OF INCOME -TAX ACT, THE ALLOTTEE GETS TITLE TO THE PROPERTY ON THE ISSU ANCE OF THE ALLOTMENT LETTER AND THE PAYMENT OF INSTALLMENTS IS ONLY A FOLLOW UP ACTION AND TAKING THE DELIVERY OF POSSESS ION IS ONLY A FORMALITY. IN CASE OF CONSTRUCTION AGREEMENT S, THE TENTATIVE COST OF CONSTRUCTION IS ALREADY DETERMINE D AND THE AGREEMENT PROVIDES FOR PAYMENT OF COST OF CONSTRUCTION IN INSTALLMENTS SUBJECT TO THE CONDITI ON THAT THE ALLOTTEE HAS TO BEAR THE INCREASE, IF ANY, IN T HE COST OF CONSTRUCTION. THEREFORE, FOR THE PURPOSE OF CAPITAL GAINS TAX THE COST OF THE NEW ASSET IS THE TENTATIVE COST OF CONSTRUCTION AND THE FACT THAT THE AMOUNT WAS ALLOW ED TO BE PAID IN INSTALLMENTS DOES NOT AFFECT THE LEGAL P OSITION. THEREFORE, IN CONSTRUING SUCH TAXATION PROVISIONS, WHAT SHOULD BE THE APPROACH OF THE COURTS AND THE INTERPRETATION TO BE PLACED IS CLEARLY SET OUT BY T HE APEX COURT IN THE CASE OF SMT. SAROJ AGGARWAL VS CIT 156 ITR 497 WHEREIN IT IS HELD AS UNDER:- 'FACTS SHOULD BE VIEWED IN NATURAL PERSPECTIVE, HAVING REGARD TO THE COMPULSION OF THE CIRCUMSTANCES OF A CASE. WHERE IT IS POSSIBLE TO DR AW TWO INFERENCES FROM THE FACTS AND WHERE THERE IS NO EVIDENCE OF ANY DISHONEST OR IMPROPER MOTIVE ON THE PART OF THE ASSESSEE, IT WOULD BE JUST AND EQUITABL E TO DRAW SUCH INFERENCE IN SUCH A MANNER THAT WOULD LEAD TO EQUITY AND JUSTICE. TOO HYPER-TECHNICAL OR LEGALISTIC APPROACH SHOULD BE AVOIDED IN LOOKING AT A PROVISION WHICH MUST BE EQUITABLY INTERPRETED AND JUSTLY ADMINISTERED COURTS SHOULD, WHENEVER POSSIBL E UNLESS PREVENTED BY THE EXPRESS LANGUAGE BY ANY SECTION OR COMPELLING CIRCUMSTANCES OF ANY PARTICUL AR CASE, MAKE A BENEVOLENT AND JUSTICE ORIENTED INFERENCE. FACTS MUST BE VIEWED IN THE SOCIAL MILIE U OF A COUNTRY.' THEREFORE, KEEPING THE AFORESAID PRINCIPLES IN MIND , WHEN WE LOOK AT SECTION 48, THE LANGUAGE EMPLOYED IS UNAMBIGUOUS. THE INTENTION IS VERY CLEAR. WHEN A CA PITAL ASSET IS TRANSFERRED, IN ORDER TO DETERMINE THE CAP ITAL GAIN ITA NO.2959/BANG/2018 PAGE 9 OF 16 FROM SUCH TRANSFER, WHAT IS TO BE SEEN IS, OUT OF F ULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING, THE COST OF ACQUISITION OF THE ASSET, THE COST OF IMPROVEMENT A ND ANY EXPENDITURE WHOLLY OR EXCLUSIVELY INCURRED IN CONNE CTION WITH SUCH TRANSFER IS TO BE DEDUCTED. WHAT REMAINS THEREAFTER IS THE CAPITAL GAIN. IT IS NOT NECESSARY THAT AFTER PAYMENT OF COST OF ACQUISITION, A TITLE DEED IS TO BE EXECUTED IN FAVOUR OF THE ASSESSEE. EVEN IN THE ABS ENCE OF A TITLE DEED, THE ASSESSEE HOLDS THAT PROPERTY AND THEREFORE, IT IS THE POINT OF TIME AT WHICH HE HOLD S THE PROPERTY, WHICH IS TO BE TAKEN INTO CONSIDERATION I N DETERMINING THE PERIOD BETWEEN THE DATE OF ACQUISIT ION AND DATE OF TRANSFER OF SUCH CAPITAL GAIN IN ORDER TO DECIDE WHETHER IT IS A SHORTTERM CAPITAL GAIN OR A LONG TE RM CAPITAL GAIN. 10.1 FURTHER, IN THE CASE OF RICHA BAGRODIA IN ITA NO.3601/MUM/2012 DATED 22.4.2014, THE TRIBUNAL CONS IDERED SIMILAR ISSUE AND OBSERVED AS UNDER: 4. WE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE JUDGMENTS OF THE HON'BLE HIGH COURT AND THE DECISIONS OF THE TRIBUNA L CITED BY LEARNED REPRESENTATIVES OF BOTH THE PARTIES. THE ONLY ISSUE THAT IS TO BE DECIDED IS WHETHER THE DATE OF ALLOTMENT OF THE FLAT OR THE DATE OF POSSESSION OF THE FLAT B Y THE ASSESSEE SHOULD BE CONSIDERED AS THE DATE FOR COMPU TING THE HOLDING PERIOD OF 36 MONTHS. ON PERUSAL OF THE CITED ORDERS OF THE TRIBUNAL (SUPRA), WE FIND THAT AN IDE NTICAL ISSUE CAME UP FOR ADJUDICATION BEFORE THE TRIBUNAL IN THE CASE OF MEENA A HEMNANI (SUPRA), ORDER DATED 17TH JANUARY, 2014 WHEREIN ONE OF US (AM) IS A PARTY AND THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY RELY ING ON VARIOUS DECISIONS OF THE TRIBUNAL AS WELL AS THE JU DGMENT OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CI T VS. ANILABEN UPENDRA SHAH (2003) 262 ITR 657 (GUJ). RELEVANT DISCUSSION IS GIVEN IN PARAS 3 & 4 OF THE SAID ORDER OF THE TRIBUNAL WHICH READ AS UNDER: 3. THERE ARE COUPLE OF ISSUES RAISED IN THIS APPEAL . REST OF THE GROUNDS RAISED IN THE APPEAL ARE EITHER CONSEQUENTIAL OR GENERAL IN NATURE. ACCORDINGLY, TH EY ARE DISMISSED AS GENERAL OR CONSEQUENTIAL. THE ISSUES, WHICH NEED TO BE ADJUDICATED IN THIS APPEAL ARE (0 IF THE CAPITAL GAINS EARNED BY THE ASSESSEE ARE ITA NO.2959/BANG/2018 PAGE 10 OF 16 IN THE NATURE OF THE SHORT TERM AS HELD BY THE AO O R LONG TERM CAPITAL GAINS AS OFFERED BY THE ASSESSEE IN THE RETURN. AT THE OUTSET, LD COUNSEL FOR THE ASSES SEE MENTIONED THAT THE ASSESSEE PURCHASED A FLAT VIDE THE ALLOTMENT LETTER DATED 9.9.2003 FROM THE BUILDE R NAMELY PRESTIGE ESTATES PROJECTS PVT. LTD. THERE WA S A CONSTRUCTION AGREEMENT BETWEEN THE PARTIES DATED 1.12.2003 AND THE REGISTERED DEED OF THE SAME WAS DATED ON 22.9.2006. THE SAID FLAT WAS SOLD BY THE ASSESSEE TO BENNET COLEMAN & COMPANY ON 10.11.2006. THE ASSESSEE EARNED CAPITAL GAINS ON TH IS TRANSACTION AND OFFERED THE SAME AS LONG TERM CAPITAL GAINS RECKONING THE DATE OF ALLOTMENT I.E., 9.9.2003 FOR THE PURPOSE OF DETERMINING THE HOLDING PERIOD OF THREE YEARS RELEVANT FOR THE LONG TERM CAPITAL GAINS. HOWEVER, IN THE ASSESSMENT PROCEEDINGS, AO CONSIDERED THE DATE OF REGISTRATION I.E., 22.9.2006 THE DATE OF REGISTRATION AND DETERMINED THE SHORT TERM CAPITAL GAINS. THEREFORE, NOW THE ISSUE TO BE DECIDED BY THE TRIBUNAL RELATES TO IF THE DATE OF ALLOTMENT SHOULD BE CONSIDERED FO R THE PURPOSE OF COMPUTING THE SAID LONG TERM CAPITAL GAINS. IN THIS REGARD, LD COUNSEL FILED VARIOUS DECISIONS TO SUGGEST THAT THE DATE OF ALLOTMENT MUS T BE CONSIDERED FOR THE PURPOSE OF COMPUTING THE LONG TERM CAPITAL GAINS INSTEAD OF DATE OF REGISTRATION. LD COUNSEL FILED THE ORDER OF THE TRIBUNAL IN THE CASE OF ACIT VS. SMT VANDANA RANA ROY VIDE ITA NO. 6173/M/2011 (A Y 2007-2008) DATED 7.11.2012, WHEREIN ONE OF US (AM) IS A PARTY, AND STATED THAT THE 'DATE OF ALLOTMENT' SHOULD BE RECKONED AS RELEVANT DATE FOR COMPUTING THE HOLDING PERIOD FOR THE PURPOSE OF COMPUTING THE CAPITAL GAINS. IN THIS REGARD, LD COUNSEL BROUGHT OUR ATTENTION TO PARA 7 AND 8 OF THE SAID ORDER OF THE TRIBUNAL TO SUPPORT HIS CASE. THE SAID JUDGMENT WAS DECIDED CONSIDERING THE JUDGMENT OF THE GUJARAT HIGH COURT IN THE CASE OF C IT VS. ANILABEN UPENDRA SHAH (2003) 262 ITR 657 (GUJ) APART FROM OTHER DECISIONS OF THE TRIBUNAL IN THE C ASE OF JITENDRA MOHAN VS. ITO (2007) 11 SOT 594 (DEL) AND ALSO ANOTHER DECISION OF THE ITA T IN THE CASE OF PRAVIN GUPTA VS. ACIT AND THE RELEVANT PROPOSITIONS ITA NO.2959/BANG/2018 PAGE 11 OF 16 ARE EXTRACTED IN PARA 7 OF THE TRIBUNAL'S ORDER DAT ED 7.11.2012. THE SAID PARAS 7 AND 8 FROM THE ORDER OF THE TRIBUNAL IN THE CASE OF SMT VANDANA RANA ROY READ AS UNDER: 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE CITE D DECISIONS AND WE FIND THAT THERE IS NO DISPUTE ON T HE FACTS THE ONLY ISSUE THAT IS TO BE DECIDED IS WHETH ER DATE OF ALLOTMENT OF THE FLAT OR THE DATE OF POSSES SION OF THE FIAT BY THE ASSESSEE SHOULD BE CONSIDERED AS DATE OF HOLDING FOR COMPUTING THE HOLDING PERIOD OF 36 MOTHS. IN ALTERNATIVE, THE 'DATE OF REGISTRATION ' SHOULD BE THE RELEVANT DATE. ON PERUSAL OF THE SAID DECISIONS RELIED UPON BY THE LD COUNSEL, WE FIND TH AT THE DECISIONS ARE RELEVANT AND APPLICABLE TO THE FA CTS OF THE PRESENT CASE. THE CONCLUSION OF THE HONBLE GUJARAT HIGH COURT JUDGEMENT IN THE CASE OF CIT VS. JINDAS PANCHAND GANDHI READS AS UNDER: 'ASSESSEE HAVING SOLD THE FIAT ALLOTTED TO HIM BY A CO- OPERATIVE HOUSING SOCIETY AFTER A PERIOD OF 36 MONTHS FROM THE DATE OF ALLOTMENT, CAPITAL GAINS ARISING TO HIM WERE LONG-TERM CAPITAL GAINS DESPITE THE FACT THAT THE PHYSICAL POSSESSION OF THE FLAT W AS GIVEN TO THE ASSESSEE MUCH LATER AND, THEREFORE HE WAS ENTITLED TO DEDUCTION FROM SUCH GAINS AS PER LAW' 7.1 THE CONCLUSION OF THE HON'BLE GUJARAT HIGH COURT JUDGMENT IN THE CASE OF CIT VS. ANILABEN UPENDRA SHAH READS AS UNDER: 'ASSESSEE HAVING HELD THE SHARES AND ALLOTMENT OF A FLAT IN A CO-OPERATIVE HOUSING SOCIETY FOR A PERIOD OF MORE THAN 36 MOTHS THE CAPITAL GAIN ARISING FROM SA LE OF SAID FLAT WAS LONGTERM CAPITAL GAIN AND ASSESSEE WAS ENTITLED TO BENEFIT OF SECTION 80T IRRESPECTIVE OF THE FACT THAT THE ASSESSEE DID NOT GET POSSESSION O F THE FIAT IN QUESTION AT THE TIME OF ALLOTMENT AND I T WAS CONSTRUCTED LATER ON.' ITA NO.2959/BANG/2018 PAGE 12 OF 16 7.2 THE CONCLUSION OF HON'BLE ITA T, DELHI BENCH IN THE CASE OF JITENDRA MOHAN VS. ITO READS AS UNDER: ON THE FACTS OF THE CASE, ASSESSEE HELD THE CAPITAL ASSET (SHED) ALLOTTED TO IT ON INSTALLMENT BASIS FR OM 2E DECEMBER, 1994, THE DATE OF PAYMENT OF SECOND INSTALLMENT AND SALE THEREOF ON 1.57 DECEMBER, 2000, GAVE RISE TO LONG TERM CAPITAL LOSS EVEN THOU GH POSSESSION OF SHED WAS HANDED OVER BY DSIDC TO ASSESSEE ON 28M MAY, 1998.' 7.3 THE CONCLUSION OF HON'BLE ITA T, DELHI BENCH IN THE CASE OF PRAVEEN GUPTA VS. ACIT READS AS UNDER: 'ASSESSEE CAN BE SAID TO HAVE HELD THE FLAT WHEN HE MADE THE PAYMENT TO THE BUILDER AND RECEIVED THE ALLOTMENT LETTER, AND THEREFORE, BENEFIT OF INDEXAT ION OF COST OF ACQUISITION OF THE FIAT HAS TO BE GRANTE D TO THE ASSESSEE FROM THE DATE (1995) WHEN HE STARTED MAKING PAYMENT TO THE BUILDER AND NOT FROM THE DATE OF EXECUTION OF CONVEYANCE DEED IN 2001.' 8. ALL THE ABOVE DECISIONS ARE UNIFORM IN CONCLUDIN G THAT THE 'DATE OF ALLOTMENT' IS RECKONED AS THE DAT E FOR COMPUTING THE HOLDING PERIOD FOR THE PURPOSE OF CAPITAL GAINS. THE DATE OF ALLOTMENT IN THIS CASE B EING 19.11.2001 AND THE DATE OF SALE IS 23.8.2006, THEREFORE, THE HOLDING PERIOD IS MUCH MORE THAN 36 MONTHS. IN THIS CASE, THE GAINS EARNED BY THE ASSESSEE ON THE SALE OF FLAT HAVE TO BE COMPUTED AS CAPITAL GAINS. WITHOUT PREJUDICE, EVEN IF THE DATE OF POSSESSION, BEING 14.8.2003, IS CONSIDERED; THE ASSESSEE IS STILL ENTITLED TO THE BENEFITS OF THE L ONG TERM CAPITAL GAINS. THEREFORE, IN OUR OPINION, ORDE R OF THE CIT (A) DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED.' 4. CONSIDERING THE ABOVE SETTLED NATURE OF THIS IS SUE, WE ARE OF THE OPINION THAT THE ASSESSEE MUST SUCCEED O N THIS ISSUE. ACCORDINGLY, THE RELEVANT GROUNDS OF APPEAL ARE ALLOWED.' ITA NO.2959/BANG/2018 PAGE 13 OF 16 7. FROM THE ABOVE SETTLED POSITION OF THE ISSUE, I T CAN BE SAFELY CONCLUDED THAT THE ' DATE OF ALLOTMENT ' SHOULD BE RECKONED AS THE DATE FOR COMPUTING THE HOLDING PERI OD FOR THE PURPOSE OF CAPITAL GAINS. IN THE INSTANT CASE, THE DATE OF ALLOTMENT IS 11.04.2003 (FY 2003-2004) AND THE DATE OF SALE OF THE PROPERTY IS 14.10.2007 , THEREFORE THE HOLDING PERIOD IS MORE THAN 36 MONTHS. THEREFORE, THE CAPIT AL GAINS EARNED BY THE ASSESSEE ON THE SALE OF THE FLAT HAVE TO BE TREATED AS 'LONG TERM CAPITAL GAINS'. THE ASSESEE P AID THE FIRST INSTALLMENT ON 11.4.2003, THEREBY CONFERRING A RIGH T TO HOLD A FLAT, WHICH WAS LATER IDENTIFIED AND POSSESSION DEL IVERED ON LATER DATE. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF MRS. MADHU KAUL VS. CIT VIDE INCOME TAX APP EAL NO.89 OF 1999, DATED 17TH JANUARY, 2014 HELD THAT T HE MERE FACT THAT POSSESSION WAS DELIVERED LATER, DOES NOT DETRACT FROM THE FACT THAT THE ALLOTTEE WAS CONFERRED A RIGHT TO HOLD PROPERTY ON ISSUANCE OF AN ALLOTMENT LETTER. THUS, THE ID DR'S ARGUMENTS ON NON-EXISTENCE OF THE FLAT AT THE TIME OF ISSUING OF ALLOTMENT LETTER STANDS ANSWERED BY THE SAID JUD GMENT OF THE HON'BLE HIGH COURT OF PUNJAB & HARYANA (SUPRA). THE SAME VIEW WAS SUPPORTED BY VARIOUS DECISIONS OF THE TRIBUNAL AS WELL AS THE JUDGMENTS OF THE HON'BLE GUJARAT HIG H COURT AND THE RELEVANT CONCLUSIONS WERE ALREADY EXTRACTED IN THE ABOVE PARAGRAPHS OF THIS ORDER. REGARDING THE JUDGM ENTS OF THE HON'BLE JURISDICTIONAL HIGH COURT RELIED ON BY THE LD DR ARE DISTINGUISHABLE ON FACTS. THEREFORE, CONSIDERIN G THE ABOVE SETTLED NATURE OF THE ISSUE AS WELL AS THE FOLLOWIN G THE PRINCIPLE OF CONSISTENCY, WE ARE OF THE CONSIDERED OPINION THAT THE GROUND NO.1 RAISED BY THE ASSESSEE SHOULD BE AL LOWED. ACCORDINGLY, GROUND NO.1 IS ALLOWED. 11. SAME VIEW WAS TAKEN BY COORDINATE BENCH IN THE CASE OF BHATKAL RAMARAO PRAKASH VS. ITO IN ITA NO.2692/BANG/2018 DA TED 4.1.2019. BEING SO IN OUR OPINION, IN THIS CASE FOR COMPUTING THE INFLATION COST OF THE ASSET, THE DATE TO BE RECKONE D FROM THE DATE OF ALLOTMENT OF THE PROPERTY TO THE ASSESSEE AND NOT T HE DATE ON WHICH POSSESSION CERTIFICATE ISSUED TO THE ASSESSEE. FURT HER, A JUDGEMENT RELIED BY CIT IN THE CASE OF CIT VS. BALBIR SINGH M AINI (SC) (SUPRA) HAVE NO APPLICATION AND IT WAS DELIVERED ON DIFFERE NT CONTEXT WITH REFERENCE TO SECTION 2(47)(V) OF THE ACT AND THE JU DGEMENT OF HONBLE HIGH COURT RELIED BY THE ASSESSEES COUNSEL IN THE CASE OF A. SURESH RAO CITED (SUPRA) IS A DIRECT JUDGEMENT APPLICABLE TO THE FACTS OF THE CASE. BEING SO, WE HAVE NO HESITATION IN REVERSING THE FINDING OF THE LD. CIT(A) ON THIS ISSUE AND DIRECT THE A.O. TO CON SIDER THE DATE OF ITA NO.2959/BANG/2018 PAGE 14 OF 16 ALLOTMENT OF PROPERTY I.E. 20.5.1986 FOR THE PURPOS E OF DETERMINING THE COST OF INFLATION OF THE ASSETS, WHILE COMPUTIN G THE COST OF ACQUISITION OF PROPERTY IN TERMS OF SECTION 49 OF T HE ACT. THIS GROUND OF THE ASSESSEE IS ALLOWED. 10. SIMILAR VIEW WAS TAKEN BY THE HONBLE JURISDICT IONAL HIGH COURT IN THE CASE OF SMT. DAISY DEVAIAH IN ITA NO.109/2014, JUDGMENT DAT ED 22.7.2014 WHEREIN IT WAS HELD AS FOLLOWS:- 6. THE APPEAL IS ADMITTED TO CONSIDER THE FOLLOWING SUBSTANTIAL QUESTION OF LAW: 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE TRIBUNAL IS RIGHT IN LAW IN CONCLUDING THAT WHILE C OMPUTING THE CAPITAL GAINS ARISING ON TRANSFER OF A CAPITAL ASSE T ACQUIRED BY THE ASSESSEE THROUGH SUCCESSION, THE INDEXED COST OF AC QUISITION HAS TO BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET AND NOT THE YEAR IN WHIC H THE ASSESSEE ACTUALLY BECAME THE OWNER OF THE ASSET THROUGH SUCC ESSION?' 7. SECTION 45 OF THE ACT PROVIDES THAT ANY PROFITS OR GAINS ARISING FROM THE TRANSFER OF A CAPITAL ASSET EFFECT ED IN THE PREVIOUS YEAR SHALL BE CHARGEABLE TO INCOME TAX UNDER THE HE AD 'CAPITAL GAINS'. CAPITAL GAINS IS OF TWO TYPES. SHORT-TERM C APITAL GAINS AND LONG TERM CAPITAL GAINS. DEPENDING UPON THE NATURE OF CAPITAL GAINS THE LIABILITY OF THE TAX IS DETERMINED. THE M ODE AND MANNER OF COMPUTING THE CAPITAL GAINS IS PROVIDED UNDER SE CTION 48 OF THE ACT. THE INCOME CHARGEABLE UNDER THE HEAD CAPITAL G AIN SHALL BE COMPUTED BY DEDUCTING FROM THE FULL VALUE OF THE CO NSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET, THE EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER AND THE COST OF ACQUISITION OF T HE ASSET AND THE COST OF ANY IMPROVEMENT THEREON. THE 2ND PROVISO TO SECTION 48 PROVIDES WHERE LONG TERM CAPITAL GAIN ARISES FROM T HE TRANSFER OF A LONG TERM CAPITAL ASSET, THE COST OF ACQUISITION OF THE ASSET HAS TO BE READ AS 'INDEXED COST OF ACQUISITION'. INDEXED C OST OF ACQUISITION HAS BEEN DEFINED IN THE EXPLANATION TO THE SAID SECTION, IT MEANS AN AMOUNT WHICH BEARS TO THE COST OF ACQUISITION, THE SAME PROPORTION AS COST INFLATION INDEX FOR THE YEAR IN WHICH THE ASSET IS TRANSFERRED, BEARS TO TH E COST INFLATION INDEX FOR THE FIRST YEAR IN WHICH THE ASSET WAS HEL D BY THE ITA NO.2959/BANG/2018 PAGE 15 OF 16 ASSESSEE OR FOR THE YEAR BEGINNING ON THE 1ST DAY O F APRIL 1981, WHICHEVER IS LATER. 8. SECTION 49 DEALS WITH THE COST WITH REFERENCE TO CERTAIN MODES OF ACQUISITION. ONE SUCH MODE IS, IF THE ASSE SSEE ACQUIRES A CAPITAL ASSET BY WAY OF SUCCESSION, INHERITANCE OR DEVOLUTION, THEN THE COST OF ACQUISITION OF THE ASSET SHALL BE DEEME D TO BE THE COST FOR WHICH THE PREVIOUS OWNER OF THE PROPERTY ACQUIR ED IT, AS INCREASED BY THE COST OF ANY IMPROVEMENT OF THE ASS ETS INCURRED OR BORNE BY THE PREVIOUS OWNER OR THE ASSESSEE, AS THE CASE MAY BE. THEREFORE, WHEN AN ASSET IS ACQUIRED BY WAY OF INHERITANCE, THE COST OF ACQUISITION OF THE ASSET SHOULD BE CALC ULATED ON THE BASIS OF THE COST OF ACQUISITION BY THE PREVIOUS OW NER AND THE SAID COST OF ACQUISITION OF THE PREVIOUS OWNER HAS TO BE CALCULATED ON THE BASIS OF INDEXED COST OF ACQUISITION AS PROVIDE D IN EXPLANATION (3) TO SECTION 48 9. THOUGH IN THE DEFINITION OF 'INDEXED COST OF ACQU ISITION', THE WORD USED ARE, 'IN WHICH THE ASSET WAS HELD BY THE ASSESSEE' A HARMONIOUS READING OF SECTIONS 48 AND 49 MAKES IT C LEAR THAT, FOR THE PURPOSE OF 'INDEXED COST OF ACQUISITION', IT HA S TO BE UNDERSTOOD AS THE FIRST YEAR IN WHICH THE PREVIOUS OWNER HELD THE SAID PROPERTY. OTHERWISE, IF THE DATE OF INHERITANC E IS TAKEN INTO CONSIDERATION, THEN THE COST OF ACQUISITION OF THE ASSET ON THAT DATE CORRESPONDING TO THE MARKET VALUE IS TO BE TAKEN IN TO CONSIDERATION. OTHERWISE, TAKE THE COST OF ACQUISIT ION ON THE DAY THE PREVIOUS OWNER ACQUIRED IT AND APPLY THE 'INDEX ED COST OF ACQUISITION' AND THEN CALCULATE THE CAPITAL GAINS A ND THE TAX PAYABLE. THAT IS PRECISELY WHAT HAS BEEN HELD BY TH E BOMBAY HIGH COURT IN THE AFORESAID JUDGMENT WHICH IN OUR VIEW IS THE CORRECT LEGAL DECISION. 11. ACCORDINGLY WE DIRECT THE AO TO RECOMPUTE THE C OST OF ACQUISITION IN THE LIGHT OF ABOVE DISCUSSION. 12. THE NEXT GROUND IS WITH REGARD TO DISALLOWANCE OF COST OF IMPROVEMENT INCURRED BY THE ASSESSEE. THE LOWER AU THORITIES DENIED THIS CLAIM OF ASSESSEE TOWARDS IMPROVEMENT MADE TO THE I NTERIORS FOR WHICH THE ASSESSEE COULD NOT PRODUCE THE REQUISITE DETAILS OF BILLS AND VOUCHERS. ITA NO.2959/BANG/2018 PAGE 16 OF 16 ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE IT WA S MISPLACED. EVEN BEFORE US THE ASSESSEE HAS NOT PRODUCED AN IOTA OF EVIDENCE TO SUGGEST THAT THE COST OF IMPROVEMENT INCURRED ON THE INTERI ORS. IN THE ABSENCE OF REQUISITE DETAILS, WE ARE NOT IN A POSITION TO APPR ECIATE THE ARGUMENT OF THE ASSESSEE TO ALLOW SUCH CLAIM. THEREFORE, THIS GROUN D OF THE ASSESSEE IS DISMISSED. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF JULY, 2021. SD/- SD/- ( N V VASUDEV AN ) ( CHANDRA POOJARI ) VICE PRESIDENT ACCOUNTANT MEMBER BANGALORE, DATED, THE 29 TH JULY, 2021. / DESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.