ASIISTANT COMMISSIONER OF INCOME TAX NON CORPORATE CIRCLE 6(1), Chennai V. SHRI. RANGROOPMAL CHORDIA, Chennai

ITA 403/CHNY/2018

• Counselvise Citation: [2020] 109 COUNSELVISE.COM (IT) 9668 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 02-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K VISHVA PADMANABHAN
• Keywords: Cost of acquisition; Tax effect; Set aside
• Section: 205

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , . , BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A. NO. 403/CHNY/2018 / ASSESSMENT YEARS: 2013-14 & C.O. NO. 119/CHNY/2018 [IN I.T.A. NO. 403/CHNY/2018] THE ASSISTANT COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 6(1), ROOM NO. 223, BSNL BUILDING, II FLOOR, 16, GREAMS ROAD, CHENNAI 600 006. VS. SHRI RANGROOPMAL CHORDIA, OLD NO. 1, KALATHI PILLAI STREET, SOWCARPET, CHENNAI 600 079. [PAN:AAAPC7457K] ( /APPELLANT) ( /RESPONDENT/CROSS OBJECTOR) / APPELLANT BY : SHRI AR.V. SREENIVASAN, ADDL. CIT / RESPONDENT BY : SHRI K. VISHVA PADMANABHAN, C.A. / DATE OF HEARING : 14.10.2020 /DATE OF PRONOUNCEMENT : 04.12.2020 / O R D E R PER BENCH : THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 5, CHENNAI, DATED 24.11.2017 RELEVANT TO THE ASSESSMENT YEAR 2013-14. THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO GIVE THE BENEFIT OF INDEXATION FROM 01.04.1981. 2. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE TAX EFFECT IN THE APPEAL FILED BY THE REVENUE IS LESS THAN THE I.T.A. NO.403CHNY/18 & C.O. NO. 119/CHNY/18 2 MONETARY LIMIT OF .50,00,000/- FIXED BY THE CBDT TO FILE AN APPEAL BY THE REVENUE BEFORE THE TRIBUNAL AS PER THE CBDT CIRCULAR NO. 17/2019, DATED 08.08.2019. THE LD. DR FAIRLY CONCEDED THE SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSEE. BEING SO, THE REVENUE AUTHORITIES ARE PRECLUDED FROM FILING THE APPEAL BEFORE THE TRIBUNAL, SINCE THE TAX EFFECT IS LESS THAN .50,00,000/- IN THIS APPEAL AND THE APPEAL FILED BY THE REVENUE IS LIABLE TO BE DISMISSED. 3. OTHERWISE ALSO, WHILE COMPUTING THE INDEXED COST OF ACQUISITION, IN RELATION TO AN ASSET WHICH HAS BEEN ACQUIRED THROUGH INHERITANCE AND WHICH WAS ACQUIRED PRIOR TO 1981-82, INDEXATION HAS TO BE WITH REFERENCE TO THE YEAR 1981-82 AND COST OF ACQUISITION TO BE ADOPTED WOULD BE AS ON 01.04.1981 AS HAS BEEN HELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. MANJULA J. SHAH 355 ITR 474 (BOM), WHICH WAS FURTHER CONCURRED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF ARUN SHUNGLOO TRUST [2012] 205 TAXMAN 456 (DELHI). IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. 4. THE CROSS OBJECTION FILED BY THE ASSESSEE IS DELAYED BY 83 DAYS, FOR WHICH, THE LD. COUNSEL FOR THE ASSESSEE HAS FILED A PETITION IN SUPPORT OF AN AFFIDAVIT FOR CONDONATION OF THE DELAY ALONG WITH MEDICAL CERTIFICATE, TO WHICH; THE LD. DR HAS NOT RAISED ANY SERIOUS OBJECTION. CONSEQUENTLY, I.T.A. NO.403CHNY/18 & C.O. NO. 119/CHNY/18 3 SINCE THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE, THE DELAY OF 83 DAYS IN FILING OF THE CO STANDS CONDONED AND THE CO IS ADMITTED FOR ADJUDICATION. 4.1 THE ASSESSEE PREFERRED CROSS OBJECTION AGAINST THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE DENIAL OF THE CLAIM OF DEDUCTION WITH RESPECT TO THE COST OF IMPROVEMENT AT .4,45,811/-. THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE FOR THE DEDUCTION OF COST OF IMPROVEMENT DURING 1985- 86 TO THE EXTENT OF .4,45,811/- AS THE ASSESSEE DID NOT FURNISH ANY PROOF FOR HAVING INCURRED SUCH EXPENDITURE. ON APPEAL, THE LD. CIT(A) CONFIRMED THE DISALLOWANCE OF DEDUCTION CLAIMED BY THE ASSESSEE. 4.2 WE HAVE CONSIDERED THE RIVAL CONTENTIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT THE ASSESSING OFFICER HAS ACCEPTED THE COST OF THE BUILDING BASED ON THE VALUERS CERTIFICATE, BUT, REJECTED THE ENTIRE CLAIM OF COST OF IMPROVEMENT. ON PERUSAL OF THE ASSESSMENT ORDER, WE FIND THAT THE ASSESSING OFFICER HAS ACCEPTED THE VALUERS CERTIFICATE/REPORT FOR ASSESSING COST OF BUILDING FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN, WHEREAS, FOR THE PURPOSE OF COST OF IMPROVEMENT, THE ASSESSING OFFICER REJECTED THE VALUERS CERTIFICATE/REPORT IS FOUND TO BE INCORRECT. ADMITTEDLY, THE ASSESSEES MOTHER RAISED 2 ND AND 3 RD I.T.A. NO.403CHNY/18 & C.O. NO. 119/CHNY/18 4 FLOOR EVEN THOUGH PURCHASE BILLS, VOUCHERS ARE NOT BROUGHT ON RECORD SINCE THE COST OF IMPROVEMENT TOOK PLACE 30 YEARS BACK AND COST OF IMPROVEMENT CANNOT BE RULED OUT SINCE SUPER STRUCTURE OF THE BUILDING WAS NOT IN DISPUTE. UNDER THESE FACTS AND CIRCUMSTANCES, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO ALLOW 50% OF THE CLAIM AS COST OF IMPROVEMENT CLAIMED BY THE ASSESSEE. THUS, THE GROUND RAISED BY THE ASSESSEE IN THE CO IS PARTLY ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED AND THE CO FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THE 04 TH DECEMBER, 2020 IN CHENNAI. SD/- SD/- (G. MANJUNATHA) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, 04.12.2020 VM/- /COPY TO: 1. /APPELLANT, 2. / RESPONDENT, 3. ( )/CIT(A), 4. /CIT, 5. /DR & 6. /GF.