DCIT, Cir.-2, Pune V. Shri Chandrashekhar U. Kothari, Pune

ITA 508/PUN/2010

• Counselvise Citation: 50824514 RSA 2010
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 08-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Cost of acquisition
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO 508/PN/10 (ASSTT. YEAR: 2006-07) DY. COMMISSIONER OF INCOME-TAX, .. APPELLANT CIR.2, PUNE VS. SHRI CHNDRASHEKHAR U KOTHARI, .. RESPONDENT 39/D, VIJAY APARTMENTS, GULTEKDI, PUNE PAN AMMPK 1681 K APPELLANT BY: SMT NEERA MALHOTRA RESPONDENT BY: NONE DATE OF HEARING : 09.11.2011 DATE OF PRONOUNCEMENT : 17. 11.2011 ORDER PER G.S. PANNU, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE OR DER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, PUNE DATED 14. 01.2010, WHICH IN TURN, HAS ARISEN FROM THE ORDER OF THE ASSESSING OFFICER DATED 2 2.12.2008 PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SH ORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2006-07. 2. THE ISSUE RAISED IN THIS APPEAL BY THE REVENUE IS THA T THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN HOLDING THAT FOR TH E PURPOSE OF DETERMINING THE INDEXED COST OF ACQUISITION IN RESPECT OF AN ASSET ACQUIRE D UNDER A GIFT OR WILL, THE COST INFLATION INDEX HAS TO BE WORKED OUT BY TAKING THE DATE OF ACQUISITION BY THE PREVIOUS OWNER. IT IS FURTHER CONTENDED THAT THE COMM ISSIONER OF INCOME-TAX (APPEALS) WAS NOT JUSTIFIED IN ALLOWING THE ASSESSEES APP EAL BY FOLLOWING THE 2 DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL, MUMBAI I N THE CASE OF DCIT V. MANJULA J SHAH IN ITA NO 7315/MUM/2007 DATED 16.10.2 009. 3. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE RESPONDENT- ASSESSEE. ACCORDINGLY, THE APPEAL IS BEING DISPOSED OF AFTER HEARING THE APPELLANT-REVENUE ON MERITS AND EX PARTE QUA THE RESP ONDENT-ASSESSEE. 4. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS A PARTN ER IN M/S RAJ PROMOTERS & BUILDERS AND M/S SATISH MAHENDRA & CO. AND DERIVES IN COME FROM SHARE OF PROFIT FROM THE FIRMS, CAPITAL GAIN AND INTEREST. TH E ASSESSEE AND HIS BROTHER SHRI MAHENDRA KOTHARI SOLD PROPERTY AT S. NO. 154/1B/2/1, MAUJE YERAWADA, PUNE ADMEASURING 17100 SQ.MTS. TO M/S NAVKAR CONSTRUCTION ON 25.4.2005 FOR RS 4,25,00,000/-. THE ASSESSEE CLAIMED LONG TERM CAPITAL G AINS AT RS 11,89,199/- FROM THE SALE OF THE SAID PROPERTY. THE IMPUGNED PR OPERTY WAS PURCHASED BY LATE UTTAMCHAND KOTHARI, FATHER OF SHRI MAHENDRA AND SHRI CHANDRASHEKHAR BEFORE 1981. THE ASSESSEE AND HIS BROTHER RECEIVED THE SA ID PROPERTY DURING THE FINANCIAL YEAR 1999-2000 BY WILL OF THEIR FATHER. TH E ASSESSEE, WHILE COMPUTING THE LONG TERM CAPITAL GAINS FROM THE SALE OF THE PROP ERTY ADOPTED COST OF ACQUISITION AS ON 1.4.1981 AT RS 38,47,500/- AND COST IN FLATION INDEXATION OF 1981-82 WAS APPLIED AND THUS CALCULATED THE INDEXED COS T OF ACQUISITION AT RS 1,91,22,075/- (38,47,500 X 4.97). AS PER THE ASSESSING O FFICER, SINCE THE ASSESSEE RECEIVED THE PROPERTY DURING 1999-2000 BY WILL, THE COST INFLATION INDEX OF 1999-00 IS TO BE ADOPTED, I.E. WHEN THE ASSESSEE RE CEIVED THE PROPERTY. THUS, APPLYING THE PROVISIONS OF SECTION 48(III) OF THE ACT, THE ASSESSING OFFICER COMPUTED THE LONG TERM CAPITAL GAIN BY ADOPTING THE COST INFLATION INDEX OF 1999- 00, WHICH RESULTED IN AN ADDITION OF RS 1,42,06,376/-. 5. IN APPEAL, THE COMMISSIONER OF INCOME-TAX (APPEALS) , BY FOLLOWING THE DECISION OF THE SPECIAL BENCH IN THE CASE OF DCIT V. MAN JULA J SHAH 318 ITR (AT) 417 (MUM SB), HELD THAT THE COST INFLATION IND EX AND THE INDEXED COST OF ACQUISITION HAS TO BE WORKED OUT BY TAKING THE DATE OF A CQUISITION BY THE PREVIOUS 3 OWNER IN CASE OF THE PLOT RECEIVED BY THE ASSESSEE FROM HI S FATHER BY WAY OF A WILL OR 1.4.1981, WHICHEVER IS LATER. IN THIS VIEW OF THE MATTER, THE COMMISSIONER OF INCOME-TAX (APPEALS) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTA TIVE. THOUGH THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS ASSAILED THE OR DER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) BY RELYING ON THE STAND TAKEN BY THE ASSESSING OFFICER, HOWEVER, SHE HAS ADMITTED THAT THE ORDE R OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MANJULA J SHAH (SUPRA) FOLLOWED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) CONTINUES TO HOLD T HE FIELD. AS A RESULT THEREOF, WE FIND NO REASONS TO DIS-AGREE WITH THE STAN D OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND ACCORDINGLY, THE APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. DECISION PRONOUNCED IN THE OPEN COURT ON THE 17 TH DAY OF NOVEMBER, 2011. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEM BER PUNE, DATED: 17 TH NOVEMBER, 2011 B COPY TO:- 1) APPELLANT 2) RESPONDENT 3) THE CIT (A)-II, PUNE 4) CIT-II, PUNE 5) DR, B BENCH, ITAT, PUNE. 6) GUARD FILE TRUE COPY BY ORDER SR. PS, I.T.A.T., PUNE 4