ITO (IT) 1(1), MUMBAI V. VIREN NIRANJAN DESAI, MUMBAI

ITA 4997/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59778 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 12-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 16-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P C MAURYA
• Assessee Lawyers: MRS P URVI K GANESH
• Keywords: Gift; Cost of acquisition; Fair market value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F,MUMBAI BEFORE SHRI D. MANMOHAN (VICE PRESIDENT) & SHRI T.R. SOOD (AM) I.T.A. NO.4997/MUM/2010 (A.Y. 2007-08)) INCOME-TAX OFFICER (INTERNATIONAL TAXATION)-1(1), R.NO. 015, GR.FLOOR, SCINDIA HOUSE, BALLARD PIER, MUMBAI-400 038. VS. MR. VIREN NIRANJAN DESAI, FLAT NO.71, RAMBHA, 66, NEPEAN SEA ROAD, MUMBAI-400 006. PAN: AJVPD9198G. APPELLANT RESPONDENT APPELLANT BY SHRI P.C. MAURYA. RESPONDENT BY MRS. P URVI K. GANESH. DATE OF HEARING 12-01-2012 DATE OF PRONOUNCEMENT 20-01-2012 O R D E R PER T.R. SOOD, AM : IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWI NG GROUND : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE BASE YEAR FOR DETERMINING THE INDEXED COST OF ACQUISITION SHOULD BE F.Y. 1981-82 AS AGAINST F.Y. 2005- 06 DETERMINED BY THE ASSESSING OFFICER. 2. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE ASSESSEE, WHO IS A NON-RESIDENT INDIAN, WAS HAVING 1/4 TH UNDIVIDED SHARE IN A PROPERTY KNOWN AS SHREYAS, VILE PARLE (W), MUMBAI-400 057. DURING THE YEAR, THE ASSESSEE SOLD THE FLAT FOR A SUM OF RS.5.5 CRORES ON 21-12-2006. IT WAS NOTICED THAT AS PER PARTITION DEED DATED 18-01-1981 THE PROPERTY WAS JOINTLY HELD BY SHRI ITA NO.4997/M/2010 VIREN NIRANJAN DESAI 2 RASIKLAL DESAI ALONG WITH HIS WIFE SMT. CHAMPA BEN DESAI AND TWO SONS, NAMELY, JAGDISH R. DESAI AND SHRI NIRANJAN R. DESAI. SMT. CHAMPA BEN DESAI A CQUIRED 1/4 TH SHARE OF THE SAID PROPERTY WHICH WAS BEQUEATHED TO HER GRANDSON SHRI VIREN N. DESAI AS PER WILL DATED 23-12-1993. SMT. CHAMPA BEN DESAI PASSED AWAY ON 25-05-2001. SINCE T HE PROPERTY WAS INHERITED, THEREFORE, THE ASSESSEE ADOPTED THE FAIR MARKET VALUE ON 01-04-198 1 AND CLAIMED INDEXATION ACCORDINGLY AS THE PREVIOUS OWNER HOLDING THE PROPERTY BEFORE THAT DA TE. HOWEVER, THE AO REJECTED THIS BY OBSERVING THAT INDEXATION WAS TO BE ALLOWED FROM TH E FIRST YEAR IN WHICH THE ASSET WAS HELD BY HIM. 3. ON APPEAL, THE LD. CIT(A) ALLOWED THE APPEAL BY FOLLOWING THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. MANJULA J. SHA H (ITA NO. 7315/MUM/2007) DATED 16-10- 2009. 4. BEFORE US, THE LD. DR STRONGLY RELIED ON THE ORD ER OF AO. 5. ON THE OTHER HAND, THE LD. COUNSEL OF RHT EASSES SEE SUBMITTED THAT THE DECISION OF THE SPECIAL BENCH HAS BEEN FURTHER CONFIRMED BY THE HON BLE HIGH COURT AND, THEREFORE, THE MATTER IS COVERED AGAINST THE REVENUE. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT THE HONBLE BOMBAY HIGH COURT HAS CONFIRMED THE DECISION OF SPECIAL BENCH IN THE CASE OF CIT VS. MANJULA J. SHAH AND HELD THAT WHERE ANY ASSET IS HELD BY THE ASSESSEE UNDER A GIFT, THE N THE PERIOD FOR WHICH THE ASSET WAS HELD BY THE PREVIOUS OWNER HAS TO BE INCLUDED. THE SAME PRINCIP LE WILL APPLY TO INHERITANTS. ACCORDINGLY, FOLLOWING THIS DECISION, WE DECIDE THE ISSUE AGAINS T THE REVENUE. 7. IN THE RESULT, THE APPEAL IS DISMISSED. ITA NO.4997/M/2010 VIREN NIRANJAN DESAI 3 ORDER PRONOUNCED ON THE 20TH DAY OF JANUARY, 2012. SD/- SD/- (D. MANMOHAN) ( T.R. SOOD) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI: 20TH JANUARY , 2012. NG: COPY TO : 1. DEPARTMENT. 2.ASSESSEE. 3 CIT(A)-10,MUMBAI. 4 DIT (IT) ,RANGE-1, MUMBAI. 5.DR,F BENCH,MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST. REGISTRAR, ITAT, MUMBAI. ITA NO.4997/M/2010 VIREN NIRANJAN DESAI 4 DETAILS DATE INITIALS DESIGNATI ON 1. DRAFT DICTATED ON 16-01-2012 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 17-01-2012 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/A M 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 . DATE O N WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER