ITO WD19(3)(4), MUMBAI V. SONAL I CHINANI, MUMBAI

ITA 3797/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71941 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 19-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 29-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK SURI
• Keywords: Capital asset; Gift

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL E B ENCH, MUMBAI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.3797/MUM/2012 ASSESSMENT YEAR:- 2008-09 ITO WARD 19(3)(4), 3 RD FLOOR, PIRAMAL CHAMBER, R. NO. 304, LALBAUG, MUMABAI -400 012. VS. MS. SONAL I. CHAINANI FLAT NO. 16, 01 ST FLOOR DAULAT BAUG, 36 TH ROAD, BANDRA (W) MUMBAI - 50 PAN:- AAEPC1124H APPELLANT RESPONDENT ASSESSEE BY SHRI DHARMESH SHAH DEPARTMENT BY SHRI ASHOK SURI ORDER PER I.P. BANSAL, JM THIS APPEAL IS FILED BY THE REVENUE. IT IS DIRECTED AGAINST THE ORDER PASSED BY CIT(A) DATED 26 TH MARCH 2012 FOR ASSESSMENT YEAR 2008-09. THE ISSUE RAISED BY REVENUE IN THIS APPEAL RELATES TO LONG TERM CAPITAL GAIN SHOW BY THE ASSESSEE ON SALE OF GOLD ORNAMENTS. GROUNDS OF APPEAL READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN ALLOWING TO APPLY THE COST OF INFLATION IN DEX FROM F.Y. 1981-82 IN WHICH THE PREVIOUS OWNER FIRST HELD THE JEWELLERY WITHOUT APP RECIATING THE FACT THAT THE ASSESSEE LQUOKBZ DH RKJH[K@ DATE OF HEARING 19-12-2013 ?KKS'K.KK DH RKJH[K@ DATE OF PRONOUNCEMENT 19-12-2013 - 2 - BECAME THE OWNER OF JEWELLERY IN THE F.Y. 2004-05 B Y WAY OF INHERITANCE FROM HIS GRANDMOTHER WHO EXPIRE ON 06.10.2004. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT THE EXPLANATION (III) TO SECTION 48 CLEARLY STATE THAT THE COAT INFLATION INDEX SHALL BE ADOPTED FROM THE FIRS T YEAR IN WHICH THE ASSET WAS HELD BY THE ASSESSEE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT THE DECISION OF THE SPECIAL BENCH OF THE INCOME-TAX APPELLATE TRIBUNAL IN THE CASE OF MANJULA J. SHAH [ 35 SOT 10 (MUM) SB] HAS NOT BEEN ACCEPTED BY THE DEPARTMENT. 4. THE APPELLANT PRAY THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE AO BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. THE ASSESSEE FOR THE PURPOSE OF INDEXATION BENEF IT RELIED UPON THE VALUE TAKEN AS ON 1.4.1981, AS ACCORDING TO THE ASSESSEE THE JE WELLERY WAS RECEIVED BY HER AFTER THE DEATH OF HER GRANDMOTHER MS. LACHMIBAI, IN FINA NCIAL YEAR 2004-05. HOWEVER THE AO TOOK THE VIEW THAT SINCE THE JEWELLERY WAS R ECEVED BY THE ASSESSE IN FINANCIAL YEAR 2004-05, INDEXATION BENEFIT WAS TO BE GIVEN TO THE ASSESSEE FROM THAT YEAR ONLY. 3. LD. CIT(A) RELYING UPON THE DECISION OF ITAT, MU MBAI, IN THE CASE OF CIT VS. KISHORE KANUNGO ( 102 ITD 437) GAVE THE RELIEF TO A SSESSEE. THE DEPARTMENT IS AGGRIEVED, HENCE HAS FILED THE PRESENT APPEAL BEFOR E US. 4. AT THE OUTSET IT WAS SUBMITTED BY LD. AR THAT TH IS ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HONBLE H IGH COURT OF BOMBAY IN CASE OF - 3 - CIT VS. MANJULA J.SHAH (249 CTR 270) ( BOM.) WHERE IN IT HAS BEEN HELD THAT WHILE COMPUTING THE CAPITAL GAINS ARISING ON TRANSFER OF A CAPITAL ASSET ACQUIRED BY THE ASSESSEE UNDER A GIFT, THE INDEXED COST OF ACQUISIT ION HAS TO BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER H AS HELD THE ASSET AND NOT THE YEAR IN WHICH THE ASSESSEE BECAME THE OWNER OF THE ASSET . 5. HOWEVER, LD DR RELIED UPON THE ORDER PASSED BY T HE AO. 6. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. WE FIND THAT THE ISSUE RAISED BY THE RE VENUE IS SQUARELY COVERED BY THE AFOREMENTIONED DECISION OF HONBLE JURISDICTIONAL H IGH COURT IN THE CASE OF CIT VS. MANJULA J.SHAH. WE FIND THAT HONBLE HIGH COURT HAS ALSO REFERRED TO THE DECISION OF MUMBAI BENCH OF TRIBUNAL IN THE CASE OF CIT VS. KIS HORE KANUNGO (SUPRA) AND THE SAID DECISION OF THE TRIBUNAL HAS BEEN APPROVED. TH EREFORE, WE FIND NO MERIT IN THE DEPARTMENTAL APPEAL AND THE SAME IS DISMISSED. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 -12-2 013. SD/- SD/- (N.K. BILLAIYA) (I.P. BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER SKS SR. P.S, MUMBAI DATED 19-12-2013 - 4 - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, E BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI