DCIT, Cir.-2, Pune V. Shri Jeevan M. Gorade, Pune

ITA 379/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56393 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 12-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Keywords: Capital asset; Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI D. KARUNAKARA RAO (AM) ITA NO. 379/PN/2010 (ASSTT. YEAR : 2005-06) DY. CIT , CIR. 2, PUNE ... APPELLANT INCOME TAX OFFICER, 1 ST FLOOR, B WING, PMT BLDG, SHANKARSHETH RD., PUNE 37 V. SHRI. JEEVAN M. GORADE, RESPONDENT 1202, NANA PETH, ASHOK CHOWK, PUNE 02 PAN : ABEPG 3228 P APPELLANT BY : MS. ANN KAPTHUAMA RESPONDENT BY : SHRI. M.K. KULKARNI ORDER PER I.C. SUDHIR, JM THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON SEVERAL GROUNDS INVOLVING THE ISSUE AS TO WHETHER THE LD CIT(A) H AS ERRED IN HOLDING THAT FOR THE PURPOSE OF DETERMINING THE INDEXED COST OF ACQUISIT ION IN RESPECT OF AN ASSET ACQUIRED BY WILL, THE COST INDEXATION IN THAT H AS TO BE WORKED OUT BY TAKING THE DATE OF ACQUISITION BY THE PREVIOUS OWNER, FOLLOWIN G THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF DCIT V/S. MANJULA J SHA H (ITA NO. 7315/MUM/2007 DATED 16.10.2009). 2. IN SUPPORT OF THE GROUNDS INVOLVING THE ABOVE IS SUE, THE LD. D.R. HAS PLACED RELIANCE ON THE ASSESSMENT ORDER. SHE HAS, HOWEVER, NOT DISPUTED THIS MATERIAL FACT THAT ISSUE RAISED IS COVERED BY THE DECISION OF SPE CIAL BENCH OF THE TRIBUNAL IN THE CASE OF DCIT V/S. MANJULA J SHAH (SUPRA) FOLLOWED B Y THE LD CIT(A). ITA . NO 379/PN/2010 SHRI JEEVAN M. GORADE A.Y. 2005-06 PAGE OF 3 2 3. THE LD. A.R. TRIED TO JUSTIFY THE FIRST APPELLAT E ORDER WITH THIS SUBMISSION THAT ISSUE RAISED IS FULLY COVERED BY THE ABOVE DECISIO N OF THE SPECIAL BENCH OF THE TRIBUNAL AND TILL DATE, THERE IS NO CONTRARY DECISI ON BY THE HONBLE JURISDICTIONAL HIGH COURT OR ANY OTHER HIGHER APPELLATE FORUM. 4. AFTER HAVING GONE THROUGH THE ORDERS OF THE AUTH ORITIES BELOW, WE FIND THAT THE LD CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF TH E ASSESSEE FOLLOWING THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF DCI T V/S. MANJULA J SHAH (2009), 318 ITR 417(MUM)(SB). IN THAT CASE, THE SPECIAL BENCH HELD THAT THE INDEXED COST OF THE GIFTED ASSET HAS TO BE DETERMINED WITH REFEREN CE TO PREVIOUS OWNER. THE ASSESSEE IN THE CASE BEFORE THE SPECIAL BENCH HAD R ECEIVED THE CAPITAL ASSET ON 1.2.2003 WHEREAS THE PREVIOUS OWNER HAD ACQUIRED I T ON 29.1.1993. THE ASSESSEE CLAIMED THE COST INFLATION INDEX FOR THE YEAR BY T AKING THE DATE OF ACQUISITION OF THE PREVIOUS OWNER WHEREAS THE A.O TOOK IT WITH REFEREN CE TO DATE OF RECEIPT OF GIFT BY THE ASSESSEE. THE SPECIAL BENCH DECIDED THE ISSUE AFTER CONSIDERING THE PROVISIONS OF EXPLANATION (III) TO SECTION 48 READ WITH EXPLAN ATION 1(B) TO SECTION 2(42A) OF THE ACT. IN THE PRESENT CASE, THE ASSESSEE BECAME THE OWNER OF CERTAIN AGRICULTURAL LAND AS A RESULT OF WILL EXECUTED BY HIS GRAND MO THER; THE WILL WAS EXECUTED ON 11.5.1988. THE ASSESSEE CALCULATED THE INDEXED COS T OF ACQUISITION ON THE BASIS OF APPROVED VALUERS REPORT FOR RATE AS ON 1.4.1981, T AKING CARE OF THE COST INFLATION INDEX OF F.Y. 2004-05 AND OF F.Y. 1981-82. THE A.O STATED THAT THE WILL BY GRAND MOTHER WAS EXECUTED ON 11.5.88, SHE DIED ON 19.6.89 , I.E. IN F.Y. 1989-90, AND THUS, HE GRANTED THE BENEFIT OF INDEXATION FROM THE YEAR IN WHICH THE ASSET WAS FIRST HELD BY THE ASSESSEE, I.E. CURRENT OWNER. FOLLOWIN G THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL, THE LD CIT(A) HAS ACCEPTED T HE APPROACH OF THE ASSESSEE HOLDING THAT INDEXED COST OF THE GIFTED ASSET HAS T O BE DETERMINED WITH REFERENCE TO PREVIOUS OWNER. SINCE THE DECISION OF THE FIRST A PPELLATE AUTHORITY ON THE ISSUE IS FULLY COVERED BY THE DECISION OF THE SPECIAL BENCH IN THE CASE OF DCIT V/S. MANJULA J SHAH (SUPRA) AND THERE IS NO ADVERSE DECISION THERE TO BY THE HIGHER APPELLATE ITA . NO 379/PN/2010 SHRI JEEVAN M. GORADE A.Y. 2005-06 PAGE OF 3 3 FORUM, WE DO NOT FIND INFIRMITY IN THE FIRST APPEL LATE ORDER. THE SAME IS UPHELD. THE GROUNDS INVOLVING THE ISSUE ARE THUS REJECTED. 5. IN RESULT, APPEAL IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 24 TH AUGUST 2011. SD/- SD/ - ( D. KARUNAKARA RAO ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER PUNE, DATED THE 24TH AUGUST, 2011 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-II, PUNE 4. THE CIT(A)- II, PUNE 5. THE D.R. B BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE