ACIT 19(3), MUMBAI V. KAMLINI D ASHAR, MUMBAI

ITA 5615/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55667 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 12-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARTHA SARATHI NAIK
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Gift; Cost of acquisition
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 5615/MUM/2010 (ASSESSMENT YEAR: 2007-08) A C I T - 19(3) MRS. KAMLINI D. ASHAR ROOM NO. 305, 3RD FLOOR 601, PARISHARAM APARTMENTS PIRAMAL CHAMBERS, PAREL VS. 40 PALI HILL, BANDRA (W) MUMBAI 400012 MUMBAI 400050 PAN - AADPA 6661 N APPELLANT RESPONDENT APPELLANT BY: SHRI PARTHASARATHI NAIK RESPONDENT BY: NONE DATE OF HEARING: 11.10.2011 DATE OF PRONOUNCEMENT: 21.10.2011 O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF THE CIT(A) XXX, MUMBAI DATED 30.04.2010. 2. THE ISSUE RAISED BY THE REVENUE IS WITH REFERENCE T O THE BENEFIT OF INDEXATION GRANTED BY THE CIT(A). REVENUE HAS RAISE D THE FOLLOWING TWO GROUNDS, WHICH ARE MATERIAL FOR THE ISSUE: - (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT CLAUS E (B) OF SECTION 2(42A) IS ONLY FOR DETERMINING THE PERIOD HELD BY T HE ASSESSEE FOR THE PURPOSE OF TREATING THE ASSET AS A LONG TER M CAPITAL ASSET AND EXPLANATION (III) TO SECTION 48 CLEARLY STATES THAT THE COST INFLATION INDEX SHALL BE FROM THE FIRST YEAR IN WHI CH THE ASSET WAS HELD BY THE ASSESSEE. (2) THE DECISION OF THE SPECIAL BENCH OF THE ITAT I N THE CASE OF MUNJULA J. SHAH ITA NO. 7315/MUM/2007 DATED 16/06/2 09 HAS NOT BEEN ACCEPTED BY THE DEPARTMENT. 3. BRIEFLY STATED, THE ASSESSEE HAS FILED HER RETURN O F INCOME ON 02.11.2007 DECLARING TOTAL INCOME OF ` 37,93,970/-. HER TOTAL INCOME MAINLY CONSISTS OF INCOME UNDER THE HEAD INCOME FROM BUSIN ESS, HOUSE PROPERTY, ITA NO. 5615/MUM/2010 MRS. KAMLINI D. ASHAR 2 CAPITAL GAINS AND INCOME FROM OTHER SOURCES. IN THE YEAR UNDER CONSIDERATION ASSESSEE HAD SOLD SOME PIECE OF LAND INHERITED FROM HER LATE HUSBAND WHO DIED ON 17.02.1999. THE SAID LAND WAS ACQUIRED BY H ER HUSBAND WAY BACK IN 1950. WHILE COMPUTING LONG TERM CAPITAL GAINS ARISI NG FROM THE TRANSFER OF SAID CAPITAL ASSET, ASSESSEE HAD CLAIMED BENEFIT OF INDEXATION W.E.F. 01.04.1981 AS PER PROVISIONS OF SECTION 48 R.W. SEC TION 49(1)(III) OF THE ACT. THE SALE CONSIDERATION IN RESPECT OF THE SAID TRANS FER WAS ADOPTED ON THE BASIS OF VALUE DETERMINED BY THE REGISTERING AUTHOR ITY AS PROVIDED UNDER SECTION 50C OF THE ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. OBJECTED TO THE ADOPTION OF INDEXATION FROM THE YEA R 1981-82 INSTEAD OF 1999- 2000 IN RESPECT OF TRANSFER OF CAPITAL ASSET. THE A O WAS OF THE VIEW THAT SINCE THE SAID CAPITAL ASSET HAS BEEN HELD BY ASSESSEE FO R THE FIRST TIME IN THE YEAR 1999-2000, AS PER EXPLANATION (III) TO SECTION 48 O F THE ACT THE INDEXATION SHOULD BE ALLOWED FROM THE YEAR 1999-2000 AND HE AC CORDINGLY ASKED ASSESSEE TO SUBMIT HER EXPLANATION IN RESPECT THERE OF. IN RESPONSE ASSESSEE SUBMITTED THAT THE ISSUE INVOLVED WAS EXPLAINED DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE A.Y. 2006-07. ACCORD ING TO HER, PROVISIONS OF SECTION 2(42A) OF THE ACT IN DETERMINING PERIOD OF HOLDING OF CAPITAL ASSET, THE PERIOD FOR WHICH PREVIOUS OWNER HELD THE CAPITAL AS SET WAS INCLUDIBLE. ACCORDING TO HER, AS PER PROVISIONS OF SECTION 2(42 A) OF THE ACT, SHE IS DEEMED TO HAVE HELD THE CAPITAL ASSET SINCE 1950 I.E. PRIO R TO 01.04.1981. SHE FURTHER SUBMITTED THAT ACCORDING TO THE PROVISIONS OF SECTI ON 2(42A) R.W.S. 48, 49 & 55 OF THE ACT, IN CASE OF SUCCESSION/WILL, THE DATE OF ACQUISITION AND PERIOD OF HOLDING IS TO BE COMPUTED WITH REFERENCE TO THE ACQ UISITION OF THE CAPITAL ASSET BY THE FIRST/ PREVIOUS OWNER. ASSESSEE HAS ALSO REL IED ON CIRCULAR NO.636 OF CBDT DTD.31.08.1992. ASSESSEE HAS ALSO RELIED ON SE RIES OF JUDICIAL PRONOUNCEMENTS DISCUSSED IN THE BODY OF THE ASSESSM ENT ORDER IN FAVOUR OF ASSESSEE. HOWEVER, THE EXPLANATION FILED BY ASSESSE E WAS NOT ACCEPTED BY THE A.O. HE NOTED THAT INDEXED COST OF ACQUISITION IS C LEARLY DEFINED SEPARATELY IN EXPLANATION (III) TO SECTION 48 AND IT CANT BE MIX ED WITH SECTION 2(42A). THE A.O. FURTHER RELIED ON THE JUDGMENT OF ITAT IN THE CASE OF DCIT VS. KISHORE KANUNGO ITA NO.4666/MUM/2001 DECIDED ON 27.10.2005, WHICH IS DISCUSSED AT LENGTH IN THE BODY OF THE ASSESSMENT O RDER. RELYING ON THE SAID DECISION OF ITAT, THE A.O. COMPUTED THE COST INFLAT ION INDEX BASED ON THE ITA NO. 5615/MUM/2010 MRS. KAMLINI D. ASHAR 3 PROVISIONS OF EXPLANATION (III) TO SECTION 48 AND A LLOWED THE INDEXATION FROM THE BASE YEAR OF 1999-2000 AGAINST THE COST INFLATI ON INDEX OF 1981-82 CLAIMED BY ASSESSEE. THE RESULTANT CAPITAL GAIN AS WORKED OUT BY THE A.O. AT ` 1,12,02,8251- AGAINST LOSS OF ` 52,06,6921- CLAIMED BY ASSESSEE. 4. BEFORE THE CIT(A) ASSESSEE REITERATED THE SAME SUBM ISSIONS AND THE CIT(A), RELYING ON THE DECISION OF THE SPECIAL BENC H IN THE CASE OF MUNJULA J. SHAH ITA NO. 7315/MUM/2007 DATED 16/06/209 (NOW REP ORTED IN 37 SOT 105) DIFFERED FROM THE OPINION OF THE A.O. AND DIRE CTED HIM TO ADOPT THE COST INFLATION INDEX OF ACQUISITION OF THE CAPITAL ASSET WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIST HELD THE ASSET. REVEN UE IS AGGRIEVED. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SOUGHT ADJOURN MENT ON THE REASON THAT HE WILL BE OUT OF TOWN BUT SINCE THE IS SUE IS COVERED BY THE DECISION OF THE SPECIAL BENCH, AFTER HEARING THE LE ARNED D.R. THE ADJOURNMENT REQUEST WAS REJECTED AND THE CASE WAS H EARD. 6. AS BRIEFLY STATED ABOVE, THE ISSUE IS COVERED IN FA VOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF THE SPEC IAL BENCH IN THE CASE OF DCIT VS. MUNJULA J. SHAH 35 SOT 105 (MUM) (SB). IN THAT CASE THE SAID ASSESSEE SOLD A FLAT RECEIVED BY HER AS A GIFT FROM HER DAUGHTER IN THE YEAR 2003. THE SAID FLAT WAS PURCHASED BY THE PREVIOUS O WNER IN 1993. ASSESSEE ADOPTED THE COST OF INFLATION INDEX APPLICABLE TO F .Y. 1992-93 FOR WORKING OUT THE INDEXED COST OF ACQUISITION AND COMPUTED LO NG TERM CAPITAL GAIN. HOWEVER, THE A.O. WORKED OUT THE INDEXED COST OF AC QUISITION BY TAKING THE COST INFLATION INDEX APPLICABLE TO F.Y. 2002-03 BEI NG THE FIRST YEAR IN WHICH THE ASSET WAS HELD BY ASSESSEE. ON APPEAL THE CIT(A ) HELD THAT ASSESSEE WAS ENTITLED TO THE BENEFIT OF INDEXATION W.E.F. 1993 A ND IN THE REVENUE APPEAL THE SPECIAL BENCH OF ITAT HELD AS UNDER: - A COMBINED READING OF BOTH THE PROVISIONS, THE EXP LANATION (III) TO SECTION 48 AND THE EXPLANATION 1(B) TO SECTION 2(42 A) WHICH WERE RELEVANT IN THE INSTANT CONTEXT, CLEARLY SHOWS THAT IMPORTANCE IS ASSIGNED TO THE PERIOD OF HOLDING OF THE CAPITAL AS SET INASMUCH AS THE EXPLANATION (III) TO SECTION 48 REFERS TO THE FIRST YEAR IN WHICH THE ASSET WAS HELD BY THE ASSESSEE WHEREAS THE EXPLANAT ION 1(B) TO SECTION 2(42A) PROVIDES FOR INCLUSION OF THE PERIOD FOR WHICH THE ASSET WAS HELD BY THE PREVIOUS OWNER IN DETERMINING THE P ERIOD FOR WHICH ANY CAPITAL ASSET IS HELD BY THE ASSESSEE. HAVING R EGARD TO THAT ASPECT AS WELL AS KEEPING IN VIEW THAT THE DEFINITI ONS GIVEN IN SECTION ITA NO. 5615/MUM/2010 MRS. KAMLINI D. ASHAR 4 2 ARE APPLICABLE TO THE ENTIRE ACT, IT COULD BE SAI D THAT THE LEGISLATIVE INTENTION BEHIND ENACTING THESE PROVISIONS IS VERY CLEAR TO TREAT THE DATE AS WELL AS COST OF ACQUISITION OF CAPITAL ASSE T OF THE PREVIOUS OWNER TO BE THE DATE AND COST OF ACQUISITION OF THE ASSESSEE FOR THE PURPOSE OF COMPUTING CAPITAL GAIN IN TERMS OF SECTI ON 48. THIS IS THE SCHEME OF THE ACT AS LAID OUT IN THE RELEVANT PROVI SIONS AND THIS IS THE CONTEXT IN WHICH THE SAME HAS TO BE UNDERSTOOD AND APPRECIATED. IT WAS RIGHTLY CONTENTED BY THE ASSESSEE THAT HAD IT N OT BEEN THE INTENTION OF THE LEGISLATURE, THE EXPRESSION USED I N THE EXPLANATION (III) TO SECTION 48 WOULD HAVE BEEN .. FOR THE FI RST YEAR IN WHICH THE CAPITAL ASSET BECAME THE PROPERTY OF THE ASSESSEE AS USED IN SECTION 49(1). [PARA 14] THE TRANSACTION OF GIFT IS NOT REGARDED AS TRANSFER AND, ACCORDINGLY, CAPITAL GAIN ARISING FROM SUCH TRANSFER IS NOT MADE CHARGEABLE TO TAX UNDER SECTION 45. HOWEVER, THIS CAPITAL GAIN BY IMP LICATION IS BROUGHT TO TAX AT SECOND STAGE WHEN CAPITAL ASSET BECOMING THE PROPERTY OF THE ASSESSEE UNDER THE GIFT IS SUBSEQUENTLY TRANSFE RRED BY HIM BY ADOPTING THE DATE AND COST OF ACQUISITION OF THE CA PITAL ASSET OF THE PREVIOUS OWNER AS THE DATE AND COST OF ACQUISITION OF THE ASSESSEE. THIS PRECISELY IS THE SCHEME OF THE ACT, AS LAID OU T IN THE RELEVANT PROVISIONS AND IF THE EXPLANATION (III) TO SECTION 48 IS INTERPRETED IN THE WAY BY TAKING THE DATE ON WHICH THE CAPITAL ASS ET RECEIVED BY THE ASSESSEE UNDER A GIFT BECAME HIS PROPERTY FOR THE P URPOSE OF WORKING OUT THE INDEXED COST OF ACQUISITION, IT WOULD CERTA INLY NOT BE IN CONSONANCE WITH THE SCHEME. THEREFORE, ONE SHOULD N OT GO BY THE LITERAL MEANING OF THE WORDS OR BY THE GRAMMATICAL STRUCTURE OF THE SENTENCE WHILE INTERPRETING THE RELEVANT PROVISIONS OF THE EXPLANATION (III) TO SECTION 48. ON THE OTHER HAND, SCHEMATIC M ETHOD OF INTERPRETATION IS TO BE ADOPTED GOING BY THE DESIGN OR PURPOSE WHICH LIES BEHIND THE RELEVANT PROVISIONS, KEEPING IN MIN D THE SPIRIT AND NOT THE LETTER OF THE LEGISLATURE. THE RELEVANT PROVISI ONS, THUS, ARE TO BE INTERPRETED SO AS TO PRODUCE THE DESIRED EFFECT WHI CH WAS SOUGHT TO BE ACHIEVED. IT IS, THEREFORE, NECESSARY IN SUCH A SITUATION TO AVOID THE LITERAL INTERPRETATION OF THE RELEVANT PROVISIONS. A SCHEMATIC INTERPRETATION SHOULD BE APPLIED TO SUCH A SITUATIO N IF IT IS SO DONE, THE ONLY VIEW POSSIBLE FROM THE INTERPRETATION OF R ELEVANT PROVISIONS IS THAT THE PERIOD FOR WHICH THE ASSET WAS HELD BY THE PREVIOUS OWNER IS TO BE INCLUDED IN DETERMINING THE PERIOD FOR WHICH THE ASSET WAS HELD BY THE ASSESSEE AS PROVIDED IN THE EXPLANATION 1(B) TO SECTION 2 (42A) AND THIS POSITION IS APPLICABLE EVEN TO WORKING OUT THE INDEXED COST OF ACQUISITION WITHIN THE MEANING OF THE EXPLANATION ( III) TO SECTION 48. [PARA 15] THAT IS SO ALSO BECAUSE WHEN THE COST OF ACQUISITIO N TO THE PREVIOUS OWNER AS ON THE DATE OF ACQUISITION OF THE CAPITAL ASSET BY HIM IS TO BE ADOPTED AS COST OF ACQUISITION TO THE ASSESSEE EVEN FOR THE PURPOSE OF WORKING OUT THE INDEXED COST OF ACQUISITION AS PER THE MEANING GIVEN IN THE EXPLANATION (III) TO SECTION 48, IT DOES NOT SOUND LOGICAL TO ADOPT THE COST INFLATION INDEX FOR THE YEAR IN WHICH THE CAPITAL ASSET BECAME THE PROPERTY OF THE ASSESSEE AND NOT FOR THE YEAR I N WHICH THE ASSET ITA NO. 5615/MUM/2010 MRS. KAMLINI D. ASHAR 5 WAS ACQUIRED BY THE PREVIOUS OWNER. WHEN THE COST O F ACQUISITION OF THE PREVIOUS OWNER AS ON THE DATE OF ACQUISITION OF THE CAPITAL ASSET BY HIM IS TO BE TAKEN FOR WORKING OUT THE INDEXED C OST OF ACQUISITION, THE ONLY CONCLUSION WHICH LOGICALLY AND REASONABLY FOLLOWS IS TO ADOPT THE COST INFLATION INDEX CORRESPONDING TO THAT DATE FOR APPROPRIATELY DETERMINING THE INDEXED COST OF ACQUISITION. ANY OT HER VIEW AS SOUGHT TO BE PUT FORTH BY THE REVENUE RELYING ON THE DECIS ION OF THE DIVISION BENCH OF THE TRIBUNAL IN THE CASE OF DY. CIT V. KIS HORE KANUNGO [2006] 102 LTD 437 WOULD RESULT IN NOT GIVING THE B ENEFIT OF INDEXATION FOR THE PERIOD OF HOLDING OF CAPITAL ASS ET BY THE PREVIOUS OWNER, WHICH WILL DEFEAT THE VERY PURPOSE OF ALLOWI NG THE BENEFIT OF INDEXATION AS EXPLAINED IN PARAGRAPH NO. 35 OF THE CBDT CIRCULAR NO. 636, DATED 31-8- 1992. [PARA 16] AS EXPLAINED IN PARA NO. 35 OF THE AFORESAID CIRCUL AR, THE FIXED PERCENTAGE METHOD FOLLOWED EARLIER BY ALLOWING DEDU CTION UNDER SECTION 48(2) WAS DEPENDENT ON THE NATURE AND STATU S OF THE ASSESSEE, BUT WAS UNRELATED TO THE LENGTH OF PERIOD OF THE HOLDING. THAT DEDUCTION WAS IN TENDED TO GIVE A ROUGH AND RE ADY RELIEF FOR INFLATION. IT WAS, HOWEVER, FELT THAT A FAIR METHOD OF ALLOWING RELIEF FOR THOSE FACTORS WOULD BE TO LINK IT TO THE PERIOD OF HOLDING AND FOR THAT PURPOSE, PROVISIONS HAVE BEEN MADE TO INFLATE THE C OST OF ACQUISITION OF THE ASSET AND COST OF IMPROVEMENT OF THE ASSET S O AS TO ARRIVE AT THE INDEXED COST OF ACQUISITION AND INDEXED COST OF IMPROVEMENT AND DEDUCT THOSE AMOUNTS FROM THE SALE CONSIDERATION TO ARRIVE AT THE LONG- TERM CAPITAL GAINS. IT WAS, THUS, CLEAR THAT THE LEGISLATIVE INTENTION TO INTRODUCE THE CONCEPT OF INDEXED COST OF ACQUISITION AND INDEXED COST OF IMPROVEMENT IN THE STATUTE HAS BE EN TO ALLOW DEDUCTION WHILE COMPUTING THE CAPITAL GAINS ON THE BASIS OF LENGTH OF THE PERIOD OF HOLDING OF THE CAPITAL ASSET. IN THAT SITUATION, IF THE MEANING TO INDEXED COST OF ACQUISITION AS SOUGHT TO BE GIVEN BY THE REVENUE RELYING ON THE EXPLANATION (III) TO SECTION 48 WAS ASSIGNED, THE LENGTH OF PERIOD OF HOLDING OF THE CAPITAL ASSE T BY THE PREVIOUS OWNER WOULD GET COMPLETELY EXCLUDED WHILE GIVING TH E BENEFIT OF INDEXATION. SUCH AN INTERPRETATION, THUS, WOULD LEA D TO ABSURDITY AND UNJUST RESULT WHICH, AS HELD BY THE SUPREME COURT I N THE CASE OF K.P. VARGHESE V. ITO [1981] 131 ITR 597/7 TAXMAN 13, HAD TO BE AVOIDED. MOREOVER, IT WOULD DEFEAT THE VERY PURPOSE OF INTRODUCING THE CONCEPT OF INDEXED COST OF ACQUISITION IN THE STATUTE. THE SETTLED PRINCIPLE OF STATUTORY INTERPRETATION WITH REFERENC E TO TAX LAWS IS THAT THE WORDS IN THE STATUTE ARE TO BE UNDERSTOOD IN THE SENSE IN WHICH THEY BEST HARMONIZE WITH THE SUBJECT OF THE ENACTME NT AND OBJECT WHICH THE LEGISLATURE HAD IN VIEW. THIS IS ALSO KNO WN AS RULE OF PURPOSIVE CONSTRUCTION. [PARA 17] AS IS CLEARLY EVIDENT FROM THE CLAUSE (IV) OF THE E XPLANATION (III) TO SECTION 48 IT PERMITS THE INDEXATION OF COST OF ANY IMPROVEMENT UNCONDITIONALLY AND IF THE SAME IS READ WITH SECTIO N 55(1)(B)(II) WHICH ALLOWS DEDUCTION FOR COST OF IMPROVEMENT INCURRED B Y A PREVIOUS OWNER, THE POSITION WHICH EMERGES IS THAT COST OF A NY IMPROVEMENT TO THE CAPITAL ASSET INCURRED BY THE PREVIOUS OWNER IS ALSO ELIGIBLE FOR ITA NO. 5615/MUM/2010 MRS. KAMLINI D. ASHAR 6 INDEXATION. THAT WOULD RESULT IN AN APPARENT ANOMAL Y INASMUCH AS THE COST OF IMPROVEMENT INCURRED BY THE PREVIOUS OW NER WOULD BE ELIGIBLE FOR INDEXATION ON THE BASIS OF YEAR IN WHI CH THE SAID IMPROVEMENT WAS DONE BY THE PREVIOUS OWNER WHEREAS IN CASE OF COST OF ACQUISITION, THE YEAR OF ACQUISITION OF THE ASSET BY THE ASSESSEE WOULD BE RELEVANT FOR INDEXATION PURPOSE A ND NOT THE YEAR OF ACQUISITION BY THE PREVIOUS OWNER, WHICH WAS BEY OND ANY LOGICAL COMPREHENSION. [PARA 18] IT WAS ALSO NOTED THAT IF THE INTERPRETATION AS SOU GHT BY THE REVENUE WAS ASSIGNED TO CLAUSE (III) OF THE EXPLANATION TO SECTION 48, IT WOULD LEAD TO SUCH WORKING OF INDEXED COST OF ACQUISITION IN SOME CASES WHICH IS TOTALLY ILLOGICAL AND UNREASONABLE AND WOU LD CERTAINLY DEFEAT THE VERY PURPOSE OF INDEXATION SCHEME AS EXPLAINED IN THE AFORESAID CIRCULAR NO. 636, DATED 31-8-1 992. [PARA 19] FOR THE REASONS GIVEN ABOVE, IT WAS TO BE HELD THAT FOR THE PURPOSE OF COMPUTING LONG-TERM CAPITAL GAIN ARISING FROM THE T RANSFER OF A CAPITAL ASSET WHICH HAD BECOME PROPERTY OF THE ASSESSEE UND ER GIFT, THE FIRST YEAR IN WHICH THE CAPITAL ASSET WAS HELD BY THE ASS ESSEE HAD TO BE DETERMINED TO WORK OUT THE INDEXED COST OF ACQUISIT ION, AS ENVISAGED IN THE EXPLANATION (III) TO SECTION 48 AFTER TAKING INTO ACCOUNT THE PERIOD FOR WHICH THE SAID CAPITAL ASSET WAS HELD BY THE PREVIOUS OWNER. IN THAT VIEW OF THE MATTER, II WAS TO BE HEL D THAT THE INDEXED COST OF ACQUISITION OF SUCH CAPITAL ASSET HAD TO BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER F IRST HELD THE ASSET. ACCORDINGLY, THE IMPUGNED ORDER OF THE COMMISSIONER (APPEALS) ON THE ISSUE WAS TO BE UPHELD. [PARA 20] 7. THE RATIO ESTABLISHED BY THE DECISION OF THE SPECI AL BENCH IS EQUALLY APPLICABLE TO THE FACTS OF THE PRESENT CASE AS THE ASSESSEE HAS INHERITED THE PROPERTY WHICH WAS ACQUIRED BY HER HUSBAND WAY BACK IN 1950. ASSESSEE IS ENTITLED FOR BENEFIT OF INDEXATION W.E.F. 01.04.198 1 AS PER PROVISIONS OF THE I.T. ACT. SINCE THE CIT(A) FOLLOWED THE DECISION OF THE ITAT SPECIAL BENCH(SUPRA), THERE IS NO NEED TO DIFFER FROM THE O RDER OF CIT(A). 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST OCTOBER 2011. SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 21 ST OCTOBER 2011 ITA NO. 5615/MUM/2010 MRS. KAMLINI D. ASHAR 7 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XXX, MUMBAI 4. THE CIT XIX, MUMBAI CITY 5. THE DR, A BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.