ITO (IT) 3(1), MUMBAI V. FRANCIS PAUL HARDY, MUMBAI

ITA 5332/MUM/2012

• Counselvise Citation: 533219914 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 03-12-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 24-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI PRAKASH
• Assessee Lawyers: JITENDRA SINGH
• Keywords: Capital asset; Gift; Cost of acquisition; Fair market value
• Section: 143(3); 260A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI , , , BEFORE SHRI SANJAY ARORA , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEM BER . / ITA NO. 5332 /MUM./ 2012 ( / ASSESSMENT YEAR : 20 0 9 10 ) INCOME TAX OFFICER (I.T) WARD 3(1), 114, SCINDIA HOUSE BALLARD PIER, MUMBAI 400 038 .. / APP ELLANT V/S MR. FRANCIS PAUL HAR DY C/O DR. JEHANGIR KOHIAR FLAT NO.6, SEA LAND 41, CAFFE PARADE, COLABA MUMBAI 400 005 .... / RESPONDENT ./ PERMANENT ACCOUNT NUMBER A CKPH5362E / REVENUE BY : MR. RAVI PRAKASH / ASSESSEE BY : MR. JITENDRA SINGH / DATE OF HEARING 0 3. 12 .2013 / DATE OF ORDER 06.12.2013 / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENUE, CHALLENGING THE IMPUGNED ORDER DATED 28 TH MAY 2012 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 10 , MUMBAI , FOR THE QUANTUM OF ASSESSMENT MR. FRANCIS PAUL HARDY 2 PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) FOR THE ASSESSMENT YEAR 2009 10 . I) ON THE FACTS AND 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. 2007 - 08 D ETERMINED BY THE ASSESSING OFFICER WITHOUT APPRECIATING THE FACT THAT CLAUSE (III) OF EXPLANATION TO THE PROVISO TO SECTION 48 OF THE I.T.ACT,1961 SPECIFICALLY ALLOWS INDEXATION FROM THE DATE OF HOLDING OF THE ASSET BY THE ASSESSEE. II) ON THE FACTS AND 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. 2007 - 08 DETERMINED BY THE ASSESSING OFFICER WITHOUT APPRECIATING THE FACT TH AT THE RIGHT TO HOLD THE PROPERTY DIVESTED ON THE ASSESSEE ONLY AFTER THE DEMISE OF HIS MOTHER IN F.Y.2007 - 08 AND THUS, F.Y.2007 - 08 WAS THE FIRST YEAR IN WHICH THE ASSET WAS HELD BY THE ASSESSEE . 2 . THE ASSESSEE, IN THE PRESENT CASE, IS AN INDIVIDUAL AND DUR ING THE YEAR, HE HAS DECLARED LONG TERM CAPITAL GAIN OF ` 5 , 90,12,180, ON SALE OF AN IMMOVABLE PROPERTY BEING A RESIDENTIAL FLAT AT CUFFE PARADE, MUMBAI, FOR A TOTAL CONSIDERATION OF ` 13,44,00,000, WHEREIN THE ASSESSEE HAD SHARE OF 50%. THE ORIGINAL OWNE R OF THE FLAT WAS LATE MS. DINOO MICHAEL HARDY, WHO HAD EXPIRED ON 6 TH JUNE 2007, LEAVING A WILL WHEREBY HER TWO SONS MR. FRANSIS PAUL HARDY AND MR. DAVID NIGEL HARDY, WERE BEQUEATHED WITH THE SAID FLAT IN EQUAL SHARE. THE SAID PROPERTY WAS SOLD ON 17 TH AP RIL 2008 ON A TOTAL CONSIDERATION OF ` 13.44 CRORES. THE ASSESSEE HAS WORKED OUT THE LONG TERM CAPITAL GAIN AFTER TAKING COST OF INDEXATION FROM 1 ST APRIL 1981 AND SHOWING THE FAIR MARKET VALUE AT ` 27,02,000 AS ON 1 ST APRIL 1981 . THE ASSESSING OFFICER HEL D THAT THE ASSESSEE BECAME OWNER OF THE PROPERTY ONLY UPON THE DEATH OF HIS MOTHER ON 6 TH JUNE 2007, THEREFORE, THE INDEXATION SHOULD BE TAKEN FROM THE FINANCIAL YEAR 2007 08. 3 . BEFORE THE ASSESSING OFFICER, THE ASSESSEE BESIDES MAKING ELABORATE SUBMISSIONS HAS ALSO RELIED UPON THE DECISION OF THE TRIBUNAL, MUMBAI BENCH, IN DCIT V/S MANJULA J. SHAH. THE ASSESSING OFFICER REJECTED THE ASSESSEES CONTENTION AND HELD THAT THE SAID DECISION OF THE TRIBUNAL HAS NOT BEEN MR. FRANCIS PAUL HARDY 3 ACCEPTED BY THE DEPARTMENT AND THE APPEAL H AS BEEN PREFERRED BY THE DEPARTMENT UNDER SECTION 260A BEFORE THE HIGH COURT. 4 . THE LEARNED COMMISSIONER (APPEALS) ALLOWED ASSESSEES CONTENTION FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S MANJULA J.SHAH, ORDER DATED 21 ST OCTO BER 2011, REPORTED IN [20 1 3] 355 ITR 474 (BOM.). 5 . BEFORE US, IT HAS BEEN ADMITTED BY BOTH THE PARTIES THAT THIS ISSUE NOW STANDS COVERED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN MANJULA J. SHAH (SUPRA). 6 . IN VIEW OF THE FACT THAT THE HON' BLE JURISDICTIONAL HIGH COURT IN MANJULA J. SHAH (SUPRA) HAS CATEGORICALLY HELD THAT THE CAPITAL ASSET ACQUIRED BY THE ASSESSEE UNDER GIFT OR WILL OR BY INHERITANCE THE INDEX COST OF ACQUISITION SHOULD BE WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OW NER ACQUIRED THE ASSET AND NOT IN THE YEAR IN WHICH THE ASSESSEE HAD ACQUIRED THE ASSET. THE HON'BLE JURISDICTIONAL HIGH COURT HAS DISCUSSED THIS ISSUE IN DETAIL AFTER ANALYZING THE VARIOUS PROVISIONS OF THE ACT. THUS, RESPECTFULLY FOLLOWING THE JUDICIAL P RECEDENCE OF THE JURISDICTIONAL HIGH COURT, THE GROUND RAISED BY THE REVENUE IS TREATED AS DISMISSED. 7 . 7. IN THE RESULT, REVENUES APPEAL IS TREATED AS DISMISSED. 6 TH DECE MBER 2013 ORDER PRONOUNCED IN THE OPEN COURT O N 6 TH DECEMBER 2013 SD/ - SANJAY ARORA ACCOUNTANT MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 6 TH DECEMBER 2013 MR. FRANCIS PAUL HARDY 4 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, IT AT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI