The ACIT, Circle-2, JAMNAGAR V. Smt. Manjulaben M. Patel, JAMNAGAR

ITA 428/RJT/2012

• Counselvise Citation: 42824914 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-10-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 05-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VILASH V SHINDE
• Assessee Lawyers: VIMAL DESAI CA
• Keywords: Cost of acquisition; Tax effect

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT .. .. BEFORE SHRI T. K. SHARMA JM AND SHRI D. K. S RIVASTAVA AM ITA NO. 428/RJT/2012 / ASSESSMENT YEAR : 2008-2009 ACIT, CIRCLE-2, JAMNAGAR ( / APPELLANT) SMT MANJULABEN M PATEL, C/O DR M S PATEL, DIAMOND MARKET, 2 ND FLOOR, PN MARG, JAMNAGAR PAN : AAPPP 2874 G / RESPONDENT ! '# / REVENUE BY SHRI VILASH V SHINDE, DR $% ! '# / ASSESSEE BY SHRI VIMAL DESAI, CA ' & ' %( / DATE OF HEARING 18.10.2013 ) %( / DATE OF PRONOUNCEMENT 25.10.2013 / ORDER .. , / T. K. SHARMA, J. M. : THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER DATED 25.04.2012 OF THE CIT(A), J AMNAGAR FOR THE ASSESSMENT YEAR 2008-09. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER APPEAL, SHE FILED THE RETURN OF INCOME O N 23.10.2008 DECLARING TOTAL INCOME AT RS.5,72,940/-, WHICH INTER-ALIA INCLUDE C APITAL GAIN FROM SALE OF HER SHARE (20%) IN TWO JOINT PROPERTIES VIZ. SANGEETA CO-OWN ERS AND TULAN CO-OWNERS. IN THE RETURN OF INCOME, THE ASSESSEE COMPUTED THE CAPITAL GAIN ON THE BASIS OF OWNERSHIP OF THE PROPERTIES SINCE 1989-90, ON THE BASIS OF MUTUA L AGREEMENT AND DOCUMENTS IN THE FORM OF RETURNS OF INCOME FOR THE ASSESSMENT YEAR 1 989-90 SHOWING SHARE IN THE JOINT PROPERTIES WERE FURNISHED AND THAT THE DEEDS FURNIS HED, WHICH WERE EXECUTED ON 28.02.2002 AND 24.06.1994, SHOWING TRANSFER OF INTE REST IN THE RESPECTIVE PROPERTY IN HER FAVOUR. THE ASSESSEE COMPUTED THE CAPITAL GAIN BY INDEXED COST OF ACQUISITION FROM THE FINANCIAL YEAR 1989-90; WHEREAS ACCORDING TO THE ASSESSING OFFICER, THE BENEFIT OF INDEXATION IS TO BE ALLOWED FROM EXECUTI ON OF RESPECTIVE TITLE DOCUMENTS. IN THIS MANNER, THE ASSESSING OFFICER DETERMINED THE T OTAL INCOME AT RS.2486109/- BY MAKING VARIATIONS TO THE RETURNED INCOME AT RS.1913 169/-. ON APPEAL, IN THE IMPUGNED ORDER, THE LD CIT(A) FOR THE DETAILED REASON GIVEN IN PARAGRAPH 7, DIRECTED THE 428-RJT-2012 - SMT MANJULABEN M PATEL 2 ASSESSING OFFICER TO ADOPT AND TAX THE LONG TERM CA PITAL GAIN BY ALLOWING DEDUCTION TOWARDS INDEXED COST OF ACQUISITION AND IMPROVEMENT FROM 1989-90 ONWARDS WHILE COMPUTING LONG TERM CAPITAL GAIN ON SALE OF SHARE I N JOINT PROPERTIES. AGGRIEVED WITH THE ORDER OF THE LD CIT(A), THE REVENUE IS NOW IN A PPEAL BEFORE THIS TRIBUNAL ON THE FOLLOWING GROUNDS:- 1. THE CIT(A) ERRED IN LAW AND ON FACTS IN DELETIN G THE ADDITION OF RS.1913169/- MADE BY THE ASSESSING OFFICER ON ACCOU NT OF LONG TERM CAPITAL GAIN ON SALE OF PROPERTIES. 2. THE CIT(A) ERRED IN LAW AND ON FACTS IN HOLDING THAT THE YEAR OF ACQUISITION IN RESPECT OF BOTH THE PROPERTIES IN QU ESTION WAS IN FACT 1989-90 AND NOT THE DATE ON WHICH THE SALE DEEDS OF THESE PROPE RTIES WERE EXECUTED, AND THEREBY DIRECTING THE ASSESSING OFFICER TO GRANT TH E BENEFIT OF INDEXATION FROM THE YEAR 1989-90 AND NOT FROM THE DATE OF SALE DEED. 3. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF T HE ASSESSEE, SHRI VIMAL DESAI, CA, APPEARED AND, AT THE OUTSET, SUBMITTED THAT TAX EFFECT IS LESS THAN RS.3 LACS I.E. RS.2,92,0662/-; THEREFORE THE APPEAL OF THE REVENUE BE DISMISSED. AS AGAINST THIS, LD DEPARTMENTAL REPRESENTATIVE POINTED OUT THAT WHILE WORKING OUT THE TAX EFFECT THE ASSESSEE HAS IGNORED THE SURCHARGE. AFTER INCLUDIN G THE SURCHARGE, THE TAX EFFECT IS MORE THAN RS.3 LACS; THEREFORE THE APPEAL OF THE RE VENUE CANNOT BE DISMISSED ON ACCOUNT OF LOW COST EFFECT. THE LD COUNSEL OF THE A SSESSEE FAIRLY ADMITTED THE SAME, THEREFORE WE PROCEEDED TO DECIDE THE APPEAL OF THE REVENUE ON MERITS. 4. ON MERIT, LD DEPARTMENTAL REPRESENTATIVE, RELYIN G ON THE REASONING GIVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, CONTENDE D THAT SINCE THE TITLE DOCUMENTS OF TWO PROPERTIES IN QUESTION WERE EXECUTED ON 28.02.2 002 AND 24.06.1994 SHOWING TRANSFER OF INTEREST IN THE RESPECTIVE PROPERTIES I N HER FAVOUR, THEREFORE INDEXATION BENEFIT ALLOWED BY THE ASSESSING OFFICER ON THIS BA SIS BE RESTORED. AS AGAINST THIS, LD COUNSEL OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER AND LD CIT(A). HE FURTHER POINTED OUT THAT OWNERSHI P RIGHT IN TWO JOINT PROPERTIES WAS ACQUIRED SINCE 1989 WHICH FORMALIZED BY RESPECTIVE TRANSFER DEED IN 1994-95 AND 2000-01. FURTHER, IN THE RETURN OF INCOME THE ASSES SEE HAS SHOWN SHARE OF RENTAL INCOME IN JOINT PROPERTIES SINCE 1989-90. KEEPING I N VIEW OF THIS CONSPICUOUS FACTS, THE 428-RJT-2012 - SMT MANJULABEN M PATEL 3 LD COUNSEL OF THE ASSESSEE SUBMITTED THAT THE VIEW TAKEN BY THE LD CIT(A) IN THE IMPUGNED ORDER BE UPHELD. 5. HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY CONSI DERED THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE REASONING GIVEN BY THE LD CIT(A) IN PARAGRAPH 7 OF THE IMPUGNED ORDER. IT IS PERTINENT TO NOTE THAT THE LD CIT(A) ACCEPTED THE PLEA OF THE ASSESSEE TO ALLOW THE BENEFIT OF INDEXATION COST FR OM 1989-90 AS IN THE RETURNS OF INCOME FOR THE FINANCIAL YEAR 1989-90 AND 1990-91. THE ASSESSEE HAS ALSO EARNED RENTAL INCOME FROM THESE TWO JOINT PROPERTIES WHICH IS DULY ASSESSED BY THE ASSESSING OFFICER. THIS CLEARLY INDICATES THAT THE ASSESSEE H AS ACQUIRED INTEREST IN BOTH THESE PROPERTIES IN THE YEAR 1989-90. IN THIS VIEW OF THE MATTER, WE ARE OF THE VIEW THAT THE LD CIT(A) IS LEGALLY AND FACTUALLY CORRECT IN DIRECTIN G THE ASSESSING OFFICER TO WORK OUT AND TAX THE LONG TERM CAPITAL GAIN BY GIVING THE BENEFI T OF INDEXATION FROM THE FINANCIAL YEAR 1989-90. WE, THEREFORE, DECLINE TO INTERFERE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- SD/- ( *.#. , % D. K. SRIVASTAVA ) ( .#. -. / T. K. SHARMA) #( '/ / ACCOUNTANT MEMBER '/ /JUDICIAL MEMBER /#- 0/1/ ORDER DATE 25.10.2013 /RAJKOT *BT !'# $%'& / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- ACIT, CIRCLE-2, JAMNAGAR 2. / RESPONDENT- SMT MANJULABEN M PATEL,C/O. DR. M. S . PATEL, DIAMOND MARKET, 2 ND FLOOR, P.N. MARG, JAMNAGAR 3. '151 % & 6% / CONCERNED CIT, JAMNAGAR 4. & 6%- / CIT (A), JAMNAGAR 5 . 9:; % , , / DR, ITAT, RAJKOT 6 . ;* <= / GUARD FILE /#- '# / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT