ITO 19(1)(1), MUMBAI V. NANDLAL R. MISHRA, MUMBAI

ITA 445/MUM/2014

• Counselvise Citation: 44519914 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 20-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJENDR KUMAR I JAIN
• Keywords: Capital asset; Gift; Cost of acquisition

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.445/MUM/2014 ASSESSMENT YEAR: 2007-08 ITO-19(1)(1), R. NO.319, PIRAMAL CHAMBERS, 3 RD FLOOR, PAREL MUMBAI-400012 / VS. SH. NANDLAL R. MISHRA, 9, UMRAI SADAN, 3 RD FLOOR, 1 ST ROAD, KHAR(W) MUMBAI-400052 ( / REVENUE) ( !' # /ASSESSEE) P.A. NO. AAAPM7700P / REVENUE BY SHRI JEETENDRA KUMAR-DR !' # / ASSESSEE BY SHRI RAJENDR KUMAR I.JAIN $ % & # ' / DATE OF HEARING : 25/06/2015 & # ' / DATE OF ORDER: 01/07/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 19/11/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, ON THE GROUND THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT THE DATE OF INDEX C OST OF SH. NANDLAL R. MISHRA ITA NO.445/MUM/2014 2 ACQUISITION FOR COMPUTATION OF CAPITAL GAIN SHOULD BE THE YEAR IN WHICH THE PREVIOUS OWNER ACQUIRED THE PROPE RTY AND NOT THE YEAR IN WHICH THE ASSESSEE BECAME THE OWNER OF SUCH PROPERTY. 2. DURING HEARING OF THIS APPEAL, LD. DR., SHRI JEETNEDRA KUMAR ADVANCED HIS ARGUMENTS WHICH ARE IDENTICAL TO THE GROUND RAISED BY DEFENDING THE ASS ESSMENT ORDER. ON THE OTHER HAND, SHRI RAJENDRA KUMAR I. J AIN, LD. COUNSEL FOR THE ASSESSEE, DEFENDED THE CONCLUSION A RRIVED AT IN THE IMPUGNED ORDER BY PLACING RELIANCE UPON THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS MANJULA J. SHAH (2012) 68 DTR (BOM) 269: 2012 249 C TR (BOM) 270. THIS ASSERTION OF THE ASSESSEE WAS NOT CONTROVERTED BY THE LD. DR WITH THE HELP OF ANY OTH ER CASE OR ON DIFFERENT FACTS. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE PROPERTY IN QUESTION WAS ORIGINALLY PU RCHASED BY THE PARTNERSHIP FIRM IN THE YEAR 1975. THE FATH ER OF THE ASSESSEE EXPIRED IN 1976 WHO WAS A PARTNER IN THE S AID FIRM. THE ASSESSEE HAS TAKEN THE COST OF THE PROPERTY AS ON 01/04/1981, WHILE COMPUTING LONG TERM CAPITAL GAIN, AT RS.44,32,500/- AS AGAINST THE COST PRICE GIVEN BY T HE VALUER AS RS. 44 LAKH. FOR THE PURPOSE OF CLAIMING RIGHTS IN THE PROPERTY, THE ACCOUNTS OF THE FIRM WERE MADE UP ON THE DATE OF SALE AND SALE CONSIDERATION SO RECEIVED WAS DIST RIBUTED AMONG ALL THE LEGAL HEIRS OF THE PARTNERS OF THE FI RM. THE SH. NANDLAL R. MISHRA ITA NO.445/MUM/2014 3 ASSESSEE RECEIVED 1/8 TH SHARE OUT OF THE TOTAL SALE CONSIDERATION AND THE SAME WAS OFFERED FOR TAX IN H IS RETURN UNDER THE HEAD INCOME FROM LONG TERM CAPITAL GAIN. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE RIGHT ON THE PROPERTY ARISE IN THE HANDS OF THE ASSESSEE AFTER T HE DISSOLUTION OF THE FIRM, THEREFORE, COST INFLATION INDEX WILL BE ALLOWABLE AFTER THE DISSOLUTION OF THE FIRM AND NOT AS ON 01/04/1981. THE ASSESSING OFFICER ESTIMATED THE V ALUE OF THE PROPERTY, FOR THE PURPOSES OF COMPUTATION OF LT CG, IN THE HANDS OF THE ASSESSEE, AT RS.4,64,250/- I.E. 1/ 8 TH OF RS.45,14,000/-, AS PER VALUATION OF MUNDRAK ZILA AD HIKARI, THUS, THE LONG TERM CAPITAL GAIN, IN THE HANDS OF T HE ASSESSEE, WAS COMPUTED AT RS.21,03,705/-. 2.2. ON APPEAL, BEFORE THE LD. FIRST APPELLATE AUT HORITY, THE FACTS WERE CONSIDERED AND FOLLOWING THE DECISIO N FROM THE HONBLE HIGH COURT IN THE CASE OF CIT VS MANJUL A J. SHAH, THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESS EE AND THE LD. ASSESSING OFFICER WAS DIRECTED TO ADOPT THE COST INFLATION INDEX AS ON 01/04/2008. THE REVENUE IS A GGRIEVED AND IS IN APPEAL BEFORE THIS TRIBUNAL. 2.3. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, UNDER THE FACTS NARRATE D IN PARA 2.1. ONWARDS, WE DEEM AT APPROPRIATE TO REPRODUCE HEREUNDER THE RELEVANT PORTION FROM THE ORDER OF TH E HONBLE SH. NANDLAL R. MISHRA ITA NO.445/MUM/2014 4 JURISDICTIONAL HIGH COURT IN MANJULA J. SHAH (SUPRA ) FOR READY REFERENCE:- 23. SINCE THE ASSESSEE IN THE PRESENT CASE IS HELD LIABLE FOR LONG- TERM CAPITAL GAINS TAX BY TREATING THE PERIOD FOR W HICH THE CAPITAL ASSET IN QUESTION WAS HELD BY THE PREVIOUS OWNER AS THE PERIOD FOR WHICH THE SAID ASSET WAS HELD BY THE ASSESSEE, THE INDEXED COST OF ACQUISITION HAS ALSO TO BE DETERMINED ON THE VERY S AME BASIS. 24. IN THE RESULT, WE HOLD THAT THE TRIBUNAL WAS JU STIFIED IN HOLDING THAT WHILE COMPUTING THE CAPITAL GAINS ARISING ON T RANSFER OF A CAPITAL ASSET ACQUIRED BY THE ASSESSEE UNDER A GIFT, THE IN DEXED COST OF ACQUISITION HAS TO BE COMPUTED WITH REFERENCE TO TH E YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET AND NOT THE YEAR IN WHICH THE ASSESSEE BECAME THE OWNER OF THE ASSET. 25. ACCORDINGLY, WE DISPOSE OF THE APPEAL BY ANSWER ING THE QUESTION IN THE AFFIRMATIVE I.E. IN FAVOUR OF THE A SSESSEE AND AGAINST THE REVENUE WITH NO ORDER AS TO COSTS. 2.4. BEFORE COMING TO ANY CONCLUSION, WE MAY REFER TO THE RELEVANT PROVISIONS OF THE ACT RELATING TO THE TAXABILITY OF THE GAINS ARISING ON TRANSFER OF THE CAPITAL ASSETS UNDER THE HEAD 'CAPITAL GAINS'. SEC. 45 OF THE ACT PROVIDES T HAT ANY PROFITS OR GAINS ARISING FROM THE TRANSFER OF A CAP ITAL ASSET IN THE PREVIOUS YEAR SHALL BE CHARGEABLE TO INCOME-TAX UNDER THE HEAD 'CAPITAL GAINS'. WHERE THE GAINS ARISE ON TRANSFER OF LONG-TERM CAPITAL ASSET, AS DEFINED UNDER S. 2(29A) OF THE ACT, THE SAID GAINS ARE TAXED AS LONG-TERM CAPITAL GAINS . SEC. 47(III) OF THE ACT PROVIDES THAT WHERE A CAPITAL AS SET IS TRANSFERRED UNDER A GIFT OR WILL OR INHERITANCE, TH EN, SUCH TRANSACTION SHALL NOT BE REGARDED AS TRANSFER AND I N SUCH A CASE THE LIABILITY TO PAY CAPITAL GAINS TAX WOULD N OT ARISE. LIABILITY TO PAY CAPITAL GAINS TAX, HOWEVER, WOULD ARISE WHEN THE ASSESSEE TRANSFERS THE CAPITAL ASSET ACQUIRED U NDER A GIFT SH. NANDLAL R. MISHRA ITA NO.445/MUM/2014 5 OR WILL FOR VALUABLE CONSIDERATION. THE MODE AND TH E MANNER OF COMPUTING THE CAPITAL GAINS IS PROVIDED UNDER S. 48 OF THE ACT. AS PER S. 48, THE INCOME CHARGEABLE UNDER THE HEAD 'CAPITAL GAINS' IS LIABLE TO BE COMPUTED BY DEDUCTI NG FROM THE FULL VALUE OF THE CONSIDERATION RECEIVED ON TRANSFE R OF THE CAPITAL ASSET, THE AMOUNT OF EXPENDITURE INCURRED W HOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER AND TH E COST OF ACQUISITION OF THE ASSET AND THE COST OF ANY IMPROV EMENT THERETO. WHERE THE ASSESSEE ACQUIRES ANY CAPITAL AS SET UNDER A GIFT OR WILL WITHOUT INCURRING ANY COST OF ACQUIS ITION, THERE WOULD BE NO CAPITAL GAINS LIABILITY. HOWEVER, S. 49 (1)(II) OF THE ACT PROVIDES THAT IN THE CASE OF AN ASSESSEE ACQUIR ING AN ASSET UNDER A GIFT OR WILL, THE COST OF ACQUISITION OF THE ASSET SHALL BE DEEMED TO BE THE COST FOR WHICH THE PREVIO US OWNER OF THE PROPERTY ACQUIRED IT, AS INCREASED BY THE CO ST OF ANY IMPROVEMENT OF THE ASSET INCURRED OR BORNE BY THE P REVIOUS OWNER OR THE ASSESSEE AS THE CASE MAY BE. THUS, ON ACCOUNT OF THE DEEMING FICTION CONTAINED IN S. 49(1)(II) OF THE ACT, GAINS ARISING ON TRANSFER OF A CAPITAL ASSET ACQUIR ED BY THE ASSESSEE UNDER A GIFT OR WILL WOULD ARISE. IN SUCH A CASE, THE CAPITAL GAINS UNDER S. 48 OF THE ACT WOULD HAVE TO BE DETERMINED BY DEDUCTING FROM THE TOTAL CONSIDERATIO N RECEIVED BY THE ASSESSEE, INTER ALIA THE DEEMED COS T OF ACQUISITION. 2.5. FOR BETTER APPRECIATION OF THE DISPUTE, WE QUO TE THE RELEVANT PART OF S. 48 OF THE ACT HEREUNDER : SH. NANDLAL R. MISHRA ITA NO.445/MUM/2014 6 '48. THE INCOME CHARGEABLE UNDER THE HEAD 'CAPITAL G AINS' SHALL BE COMPUTED, BY DEDUCTING FROM THE FULL VALUE OF THE CO NSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET THE FOLLOWING AMOUNTS, NAMELY : (I) EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CO NNECTION WITH SUCH TRANSFER; (II) THE COST OF ACQUISITION OF THE ASSET AND THE C OST OF ANY IMPROVEMENT THERETO; PROVIDED THAT ........ PROVIDED FURTHER THAT WHERE LONG-TERM CAPITAL GAIN ARISES FROM THE TRANSFER OF A LONG-TERM CAPITAL ASSET, OTHER THAN CAPIT AL GAIN ARISING TO A NON-RESIDENT FROM THE TRANSFER OF SHARES IN, OR DEBE NTURES OF, AN INDIAN COMPANY REFERRED TO IN THE FIRST PROVISO, THE PROV ISIONS OF CL. (II) SHALL HAVE EFFECT AS IF FOR THE WORDS 'COST OF ACQUIS ITION' AND 'COST OF ANY IMPROVEMENT', THE WORDS 'INDEXED COST OF ACQUISIT ION' AND 'INDEXED COST OF ANY IMPROVEMENT' HAD RESPECTIVELY BE EN SUBSTITUTED : PROVIDED ALSO ........ EXPLANATION. 'FOR THE PURPOSES OF THIS SECTION,' (I) ........... (II) ............ (III) 'INDEXED COST OF ACQUISITION' MEANS AN AMOUNT WHICH BEARS TO THE COST OF ACQUISITION THE SAME PROPORTION AS COST INFLA TION INDEX FOR THE YEAR IN WHICH THE ASSET IS TRANSFERRED BEARS TO THE COST INFLATION INDEX FOR THE FIRST YEAR IN WHICH THE ASSET WAS HELD BY THE ASSESSEE OR FOR THE YEAR BEGINNING ON THE 1ST DAY OF APRIL, 1981, WHI CHEVER IS LATER; (IV) 'INDEXED COST OF ANY IMPROVEMENT' MEANS AN AMO UNT WHICH BEARS TO THE COST OF IMPROVEMENT THE SAME PROPORTION AS CO ST INFLATION INDEX FOR THE YEAR IN WHICH THE ASSET IS TRANSFERRED BEA RS TO THE COST INFLATION INDEX FOR THE YEAR IN WHICH THE IMPROVEMENT TO THE ASSET TOOK PLACE; (V) 'COST INFLATION INDEX', IN RELATION TO A PREVIOUS YEAR, MEANS SUCH INDEX AS THE CENTRAL GOVERNMENT MAY, HAVING REGARD TO S EVENTY-FIVE PER CENT OF AVERAGE RISE IN THE CONSUMER PRICE INDEX FOR URBAN NON- MANUAL EMPLOYEES FOR THE IMMEDIATELY PRECEDING PREVI OUS YEAR TO SUCH PREVIOUS YEAR, BY NOTIFICATION IN THE OFFICIAL GAZETTE, SPECIFY, IN THIS BEHALF.' SH. NANDLAL R. MISHRA ITA NO.445/MUM/2014 7 2.6. THUS, THE INDEXED COST OF ACQUISITION HAS TO B E DETERMINED WITH REFERENCE TO THE COST INFLATION IND EX FOR THE FIRST YEAR IN WHICH THE CAPITAL ASSET WAS 'HELD BY THE ASSESSEE'. SINCE THE EXPRESSION 'HELD BY THE ASSESS EE' IS NOT DEFINED UNDER S. 48 OF THE ACT, THAT EXPRESSION HAS TO BE UNDERSTOOD AS DEFINED UNDER S. 2 OF THE ACT. EXPLAN ATION 1(I)(B) TO S. 2(42A) OF THE ACT PROVIDES THAT IN DE TERMINING THE PERIOD FOR WHICH AN ASSET IS HELD BY AN ASSESSEE AS WAS HELD BY THE PREVIOUS OWNER SHALL BE INCLUDED. AS THE PRE VIOUS OWNER HELD THE CAPITAL ASSET FROM 1975, AS PER EXPL N. 1(I)(B) TO S. 2(42A) OF THE ACT, THE ASSESSEE IS DEEMED TO HAVE HELD THE CAPITAL ASSET FROM 1975. BY REASON OF THE DEEME D HOLDING OF THE ASSET FROM 1975, THE ASSESSEE IS DEEMED TO H AVE HELD THE ASSET AS A LONG-TERM CAPITAL ASSET. IF THE LONG -TERM CAPITAL GAINS LIABILITY HAS TO BE COMPUTED UNDER S. 48 OF T HE ACT BY TREATING THAT THE ASSESSEE HELD THE CAPITAL ASSET F ROM 1975, THEN, NATURALLY IN DETERMINING THE INDEXED COST OF ACQUISITION UNDER S. 48 OF THE ACT, THE ASSESSEE MUST BE TREATE D TO HAVE HELD THE ASSET FROM 1975 AND ACCORDINGLY WOULD BE A PPLICABLE IN DETERMINING THE INDEXED COST OF ACQUISITION. 2.7. IF THE ARGUMENT OF THE REVENUE THAT THE DEEM ING FICTION CONTAINED IN EXPLN. 1(I)(B) TO S. 2(42A) OF THE ACT CANNOT BE APPLIED IN COMPUTING THE CAPITAL GAINS UN DER S. 48 OF THE ACT IS ACCEPTED, THEN, THE ASSESSEE WOULD NO T BE LIABLE FOR LONG-TERM CAPITAL GAINS TAX, BECAUSE, IT IS ONL Y BY APPLYING THE DEEMED FICTION CONTAINED IN EXPLN. 1(I)(B) TO S . 2(42A) AND S. 49(1)(II) OF THE ACT, THE ASSESSEE IS DEEMED TO HAVE HELD THE ASSET FROM 1975 AND DEEMED TO HAVE INCURRED THE COS T OF SH. NANDLAL R. MISHRA ITA NO.445/MUM/2014 8 ACQUISITION AND ACCORDINGLY MADE LIABLE FOR THE LON G-TERM CAPITAL GAINS TAX. THEREFORE, WHEN THE LEGISLATURE BY INTRODUCING THE DEEMING FICTION SEEKS TO TAX THE GA INS ARISING ON TRANSFER OF A CAPITAL ASSET ACQUIRED UNDER A GIF T OR WILL AND THE CAPITAL GAINS UNDER S. 48 OF THE ACT HAS TO BE COMPUTED BY APPLYING THE DEEMED FICTION, IT IS NOT POSSIBLE TO ACCEPT THE CONTENTION OF REVENUE THAT THE FICTION CONTAINED IN EXPLN. 1(I)(B) TO S. 2(42A) OF THE ACT CANNOT BE APPLIED I N DETERMINING THE INDEXED COST OF ACQUISITION UNDER S. 48 OF THE ACT. 2.8. IT IS TRUE THAT THE WORDS OF A STATUTE ARE TO BE UNDERSTOOD IN THEIR NATURAL AND ORDINARY SENSE UNLESS THE OBJE CT OF THE STATUTE SUGGESTS TO THE CONTRARY. THUS, IN CONSTRUI NG THE WORDS 'ASSET WAS HELD BY THE ASSESSEE' IN CL. (III) OF EXPLN. TO S. 48 OF THE ACT, ONE HAS TO SEE THE OBJECT WITH WH ICH THE SAID WORDS ARE USED IN THE STATUTE. IF ONE READS EXPLN. 1(I)(B) TO S. 2(42A) TOGETHER WITH SS. 48 AND 49 OF THE ACT, IT B ECOMES ABSOLUTELY CLEAR THAT THE OBJECT OF THE STATUTE IS NOT MERELY TO TAX THE CAPITAL GAINS ARISING ON TRANSFER OF A CAPI TAL ASSET ACQUIRED BY AN ASSESSEE BY INCURRING THE COST OF AC QUISITION, BUT ALSO TO TAX THE GAINS ARISING ON TRANSFER OF A CAPITAL ASSET INTER ALIA ACQUIRED BY AN ASSESSEE AS PROVIDED UNDE R S. 49 OF THE ACT WHERE THE ASSESSEE IS DEEMED TO HAVE INCURR ED THE COST OF ACQUISITION. THEREFORE, IF THE OBJECT OF TH E LEGISLATURE IS TO TAX THE GAINS ARISING ON TRANSFER OF A CAPITAL A SSET ACQUIRED UNDER A GIFT OR WILL OR INHERITANCE BY INCLUDING TH E PERIOD FOR WHICH THE SAID ASSET WAS HELD BY THE PREVIOUS OWNER IN DETERMINING THE PERIOD FOR WHICH THE SAID ASSET WAS HELD BY THE ASSESSEE, THEN THAT OBJECT CANNOT BE DEFEATED B Y SH. NANDLAL R. MISHRA ITA NO.445/MUM/2014 9 EXCLUDING THE PERIOD FOR WHICH THE SAID ASSET WAS H ELD BY THE PREVIOUS OWNER WHILE DETERMINING THE INDEXED COST O F ACQUISITION OF THAT ASSET TO THE ASSESSEE. IN OTHER WORDS, IN THE ABSENCE OF ANY INDICATION IN CL. (III) OF THE E XPLANATION TO S. 48 OF THE ACT THAT THE WORDS 'ASSET WAS HELD BY THE ASSESSEE' HAS TO BE CONSTRUED DIFFERENTLY, THE SAID WORDS SHOULD BE CONSTRUED IN ACCORDANCE WITH THE OBJECT O F THE STATUTE, THAT IS, IN THE MANNER SET OUT IN EXPLN. 1 (I)(B) TO S. 2(42A) OF THE ACT. 2.9. APART FROM THE ABOVE, S. 55(1)(B)(2)(II) OF TH E ACT PROVIDES THAT WHERE THE CAPITAL ASSET BECAME THE PROPERTY OF THE ASSESSEE BY ANY OF THE MODES SPECIFIED UNDER S. 49( 1) OF THE ACT, NOT ONLY THE COST OF IMPROVEMENT INCURRED BY T HE ASSESSEE BUT ALSO THE COST OF IMPROVEMENT INCURRED BY THE PREVIOUS OWNER SHALL BE DEDUCTED FROM THE TOTAL CON SIDERATION RECEIVED BY THE ASSESSEE WHILE COMPUTING THE CAPITA L GAINS UNDER S. 48 OF THE ACT. THE QUESTION OF DEDUCTING T HE COST OF IMPROVEMENT INCURRED BY THE PREVIOUS OWNER IN THE C ASE OF AN ASSESSEE COVERED UNDER S. 49(1) OF THE ACT WOULD ARISE ONLY IF THE PERIOD FOR WHICH THE ASSET WAS HELD BY THE P REVIOUS OWNER IS INCLUDED IN DETERMINING THE PERIOD FOR WHI CH THE ASSET WAS HELD BY THE ASSESSEE. THEREFORE, IT IS RE ASONABLE TO HOLD THAT IN THE CASE OF AN ASSESSEE COVERED UNDER S. 49(1) OF THE ACT, THE CAPITAL GAINS LIABILITY HAS TO BE COMP UTED BY CONSIDERING THAT THE ASSESSEE HELD THE SAID ASSET F ROM THE DATE IT WAS HELD BY THE PREVIOUS OWNER AND THE SAME ANALOGY HAS ALSO TO BE APPLIED IN DETERMINING THE INDEXED C OST OF ACQUISITION. FOR DETERMINING THE CAPITAL GAIN, THE COST OF SH. NANDLAL R. MISHRA ITA NO.445/MUM/2014 10 ACQUISITION OF CAPITAL ASSET IS CRUCIAL. THUS, KEEP ING IN VIEW, THE TOTALITY OF FACTS, WE HOLD THAT THE LONG TERMS CAPITAL GAINS HAS TO BE FROM THE DATE FROM WHICH THE CAPITAL ASSE T IN QUESTION WAS HELD BY THE PREVIOUS OWNER AND THE IND EXED COST OF ACQUISITION ALSO HAS TO BE DETERMINED ON TH E VERY SAME BASIS, CONSEQUENTLY, THE INDEXED COST OF ACQUI SITION HAS TO BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET AND NOT THE YEA R IN WHICH THE ASSESSEE BECAME THE OWNER OF SUCH ASSET. TH E RATIO LAID DOWN IN B.N. VYAS VS CIT (1986) 159 ITR 141 (G UJ.), CIT VS N.N. MOHAN & SONS (2001) 250 ITR 131 (DEL.), CIT VS HARBHAGWAN (1998) 145 CTR (P & H) 332, SYNDICATE B ANK LTD. VS ADDL.CIT 155 ITR 681 (KAR.), RANCHODBHAI B. PATEL VS CIT 81 ITR 446 (GUJ.), CIT VS M. RAMMAIYA REDDY 158 ITR 611 (KAR.), CIT VS SMT. M. SUBAIDA BEEBI 160 ITR 55 7 (KER.), CIT VS STEEL GROUP LTD. 131 ITR 234 (CAL.), CIT VS DUNCAN BROTHERS & COMPANY LTD. 209 ITR 44 (CAL.), ARUN SUU NY VS DCIT (2009) 184 TAXMAN 498 (KER.) FURTHER SUPPORTS THE CASE OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE DECISIO N FROM HONBLE JURISDICTIONAL HIGH COURT IN MANJULA J. SHA H (SUPRA), WE AFFIRM THE CONCLUSION DRAWN BY THE LD. COMMISSIO NER OF INCOME TAX (APPEALS), THEREFORE, THE APPEAL OF THE REVENUE IS DISMISSED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. SH. NANDLAL R. MISHRA ITA NO.445/MUM/2014 11 THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 25/06/2015. SD/ - (RAJENDRA) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER $ % MUMBAI; ( DATED : 01/07/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 $ 1# ( *+ ) / THE CIT, MUMBAI. 4. 0 0 $ 1# / CIT(A)- , MUMBAI 5. 34 .# , 0 *+' * 5 , $ % / DR, ITAT, MUMBAI 6. 6! 7% / GUARD FILE. / BY ORDER, /3+# .# //TRUE COPY// / (DY./ASSTT. REGISTRAR) , $ % / ITAT, MUMBAI