ACIT, New Delhi V. Smt. Shubhra Bose, New Delhi

ITA 3825/DEL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5454 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2007-2008
• Appeal Filed On: 14-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RENUKA JAIN GUPTA
• Assessee Lawyers: GAJENDRA MAHESHWARE; RAJAL BOSE
• Keywords: Capital asset; Gift; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI S.V. MEHROTRA ITA NO. 3825/DEL/2013 ASSTT.YR: 2007-08 ACIT CIR. 23(1), VS. SMT. SHUBHRA BOSE, NEW DELHI. N-II, 2 ND FLOOR, KAILASH COLONY, NEW DELHI-110048. PAN: AJKPB 7203 R ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SMT. RENUKA JAIN GUPTA SR. DR RESPONDENT BY : SHRI GAJENDRA MAHESHWARE ADV. & SHRI RAJAL BOSE ADV. & SH. PUNEET SOOBARTHA ADV. O R D E R PER R.P. TOLANI, J.M: : THIS IS REVENUES APPEAL AGAINST THE ORDER OF CIT (A)-XXIII, NEW DELHI DATED 14-03-2013 RELATING TO A.Y. 2007-08. FO LLOWING GROUND IS RAISED: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) HAS ERRED IN HOLDING THAT THE INDEXED COST OF ACQUISITI ON OF THE CAPITAL ASSET ACQUIRED BY THE ASSESSEE THROUGH INHE RITANCE HAS TO BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET, WHICH IS IN CONTRAVENTI ON OF THE CLAUSE (III) OF THE EXPLANATION TO SECTION 48 OF TH E INCOME TAX ACT, 1961. 2. LD. DR RELIED ON THE ORDER OF ASSESSING OFFICER. 3. LD. COUNSEL FOR THE ASSESSEE ADVERTED TO THE REL EVANT PARA OF LD. CIT(A) ALLOWING RELIEF, AS UNDER: I HAVE CAREFULLY CONSIDERED THE APPELLANTS SUBMIS SIONS AND PERUSED THE CASE LAWS RELIED ON BY THE APPELLANT. ALL THE GROUNDS OF APPEAL RELATE TO THE INDEXED COST OF ACQ UISITION OF ITA 3825/DEL/13 SMT. SHUBHRA BOSE 2 THE CAPITAL ASSET, OBJECTING TO THE ACTION OF THE A SSESSING OFFICER IN HOLDING THAT THE APPELLANT HAD BECOME THE OWNER OF 1/3 RD OF THE PROPERTY ONLY ON THE DEATH OF HER HUSBAND ON 12 -09-2004, AND OF 2/3 RD OF THE PROPERTY ON 19-09-2006 ON RELINQUISHMENT OF THEIR SHARES BY HER SON AND DAUGHTER. WHILE THE AS SESSING OFFICER HAS ALLOWED THE PURCHASE PRICE AS ON 13-03- 1986 TO BE THE COST OF ACQUISITION OF THE PROPERTY, HOWEVER, H E AHS ALLOWED THE INDEXATION OF THE COST OF ONLY 1/3 RD OF THE PROPERTY FROM THE YEAR IN WHICH THE APPELLANT FIRST BECAME THE OWNER OF THE SAID 1/3 RD SHARE. THE APPELLANT WAS ALLOWED NO BENEFIT OF IN DEXATION FOR THE PART OF THE PROPERTY WHICH WAS ACQUIRED THR OUGH THE RELINQUISHMENT DEEDS DATED 19-09-2006 AS THE PROPER TY WAS SOLD ON 25-09-2006. I FIND THAT THIS ISSUE STANDS F ULLY COVERED BY THE ORDER OF THE BOMBAY HIGH COURT IN THE CASE OF M ANJULA J. SHAH (2012) 249 CTR 270. THE HONBLE HIGH COURT HAS REFERRED TO THE PROVISIONS OF EXPLANATION 1(B) TO S ECTION 2(42A), EXPLANATION (III) TO SECTION 48, SECTION 49(1) AND SECTION 55(2)(B)(II) TO HOLD THAT IN CASES OF CAPITAL ASSET S ACQUIRED THROUGH GIFT, INHERITANCE, ETC., FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAIN, THE FIRST YEAR IN WHICH THE CAPITAL ASSET WAS HELD BY THE ASSESSEE HAS TO BE DETERMINED TO WO RK OUT THE INDEXED COST OF ACQUISITION AFTER TAKING INTO ACCOU NT THE PERIOD FOR WHICH THE CAPITAL ASSET WAS HELD BY THE PREVIOU S OWNER. MOREOVER, THE ISSUE IS NOW COVERED BY THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF ARUN SHUNG LOO TRUST VS. CIT (2012) 249 CTR 294. RESPECTFULLY FOLLOWING THE ABOVE JUDGMENT, IT IS HELD THAT THE INDEXED COST OF ACQUI SITION OF THE CAPITAL ASSET ACQUIRED BY THE APPELLANT THROUGH INH ERITANCE HAS TO BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET. ACCORDINGLY, THE ISSUE IN APPEAL IS HELD IN FAVOUR OF THE APPELLANT. 3.1. LD. COUNSEL CONTENDS THAT THE ISSUE IN QUESTIO N HAS BEEN SQUARELY DECIDED BY THE HONBLE BOMBAY HIGH COURT IN THE CAS E OF MANJULA J. SHAH (2012) 249 CTR 270. THE HONBLE HIGH COURT WHILE IN TERPRETING THE RELEVANT PROVISIONS HELD THAT IN THE CASE OF CAPITA L ASSET ACQUIRED THROUGH GIFT, INHERITANCE ETC. THE DATE OF HOLDING/ ACQUISI TION OF THE ASSET WILL BE THE ITA 3825/DEL/13 SMT. SHUBHRA BOSE 3 ONE IN THE HAND OF DONOR/ TRANSFEROR TO WORK OUT TH E INDEXED COST OF ACQUISITION. THIS PROPOSITION HAS BEEN FURTHER CON FIRMED BY HONBLE DELHI HIGH COURT IN THE CASE OF ARUN SHUNGLOO TRUST 249 C TR 294. THE ISSUE BEING SQUARELY COVERED BY THE HONBLE BOMBAY AND DE LHI HIGH COURTS, NO INFIRMITY CAN BE ATTRIBUTED TO THE ORDER OF CIT(A) . 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD. WE FIND MERIT IN THE ARGUMENT OF LD. COUNSEL FOR THE ASSESSEE. THE DECISIONS OF HONBLE BOMBAY AND DELH I HIGH COURTS IN THE AFOREMENTIONED CASES HAS SETTLED THE PROPOSITION T HAT IN CASE OF ACQUISITION OF PROPERTY OR RIGHT THEREIN BY WAY OF GIFT OR INH ERITANCE, THE DATE OF ACQUISITION OF ASSET FOR THE PURPOSE OF COMPUTING I NDEXED COST OF ACQUISITION WILL BE THE PERIOD OF HOLDING BY THE ORIGINAL TRANS FEROR/ DONOR/ TESTATOR ALSO. RESPECTFULLY FOLLOWING THE ABOVE JUDGMENT WE FIND N O INFIRMITY IN THE ORDER OF CIT(A) WHICH IS JUSTIFIED AND IN ACCORDANCE WITH JUDICIAL PRECEDENTS. THE SAME IS UPHELD. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 21-2-2014. SD/- SD/- ( S.V. MEHROTRA ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21-02-2014. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR ITA 3825/DEL/13 SMT. SHUBHRA BOSE 4