(Late) Mythri Grandhi, Rep by Legal heir Shri Vinay V.Grandhi, CHENNAI V. ITO, CHENNAI

ITA 582/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9199 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 11-03-2016
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Charitable institution; Cost of acquisition; Reasonable cause; Condonation of delay
• Section: 263; 63

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , ! ' , # $% BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ./ ITA NOS. 407 & 408/MDS/2015 & 582/MDS/2016 / ASSESSMENT YEAR : 2009-10 (LATE) MYTHRI GRANDHI, (REP. BY LH SHRI VINAY V. GRANDHI), NO.6, MASILAMANI STREET, BALAJI NAGAR, ROYPETTAH, CHENNAI- 600 014. PAN AFTPM4279F ( /APPELLANT) VS THE INCOME-TAX OFFICER, NON-CORPORATE WARD-11(2), CHENNAI. ( /RESPONDENT) / APPELLANT BY : SHRI N. VIJAY KUMAR, CA / RESPONDENT BY : SMT. JAYANTHI KRISHNAN, CIT / DATE OF HEARING : 17.05.2016 ! / DATE OF PRONOUNCEMENT: 06.06.2016 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THESE APPEALS ARE FILED BY THE ASSESSEE. ITA NO.407/MDS/2015 IS FILED AGAINST THE ORDER OF THE C OMMISSIONER OF INCOME-TAX(APPEALS) DATED 30.11.2014 FOR THE ASS ESSMENT - - ITA 407, 408/15 ETC. 2 YEAR 2009-10, WHEREIN LEVY OF PENALTY U/S.271(1)(C) OF THE ACT IS CHALLENGED. ITA NO.408/MDS/2015 IS FILED BY THE A SSESSEE AGAINST THE ORDER PASSED BY THE CIT U/S.263 OF THE ACT FOR THE ASSESSMENT YEAR 2009-10 AND ITA NO.582/MDS/2016 IS EMANATING FROM THE ORDER OF THE CIT(APPEALS) DATED 4/12/2015 CONSEQUENT TO THE ORDER PASSED U/S.143(3) R.W.S.263 OF THE ACT. 2. ITA NO.407/MDS/2015 : THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS WIT H REGARD TO CONFIRMATION OF LEVY OF PENALTY U/S.271(1)(C) OF TH E ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE HAS FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-1 0 ON 20.1.2011 ADMITTING TOTAL INCOME OF ` 8,13,460/-. THE SAME WAS PROCESSED U/S.143(1) OF THE ACT. SUBSEQUENTLY, TH E CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.143(2) OF THE ACT WAS ISSUED. AFTER EXAMINING THE CASE, THE AO COMPLETED THE ASSE SSMENT U/S.143(3) OF THE ACT DETERMINING THE TOTAL INCOME OF ` 4,96,41,505/- AND INITIATED PENALTY PROCEEDINGS FOR EVADING THE TAX BY FURNISHING INACCURATE PARTICULARS/SUPPRESSED THE FACTS AND CONCEALED THE CORRECT INCOME CHARGEABLE TO TAX. AG GRIEVED BY THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE COMMIS SIONER OF - - ITA 407, 408/15 ETC. 3 INCOME-TAX(APPEALS), WHO CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 4. AT THE TIME OF HEARING, THE LD. AR SUBMITTED THA T THE ASSESSEES LEGAL HEIR, SHRI VINAY V. GRANDHI, CAME IN APPEAL BEFORE THIS TRIBUNAL REGARDING QUANTUM ADDITION IN ITA NO.629/MDS/2014. THE TRIBUNAL VIDE ITS ORDER DATED 7.7.2014, REMITTED THE ISSUE TO THE FILE OF THE CIT(APPEALS) TO PASS APPROPRIATE ORDER BY OBSERVING AS FOLLOWS: 5. AFTER HEARING BOTH SIDES AND CAREFULLY PERU SING THE MATERIAL ON RECORD, WE FIND MERIT IN THE SUBMIS SION OF THE LD. A.R. THE LD. A.R. HAS PRODUCED THE DEAT H CERTIFICATE OF THE ASSESSEE BEFORE US IN ORDER TO ESTABLISH THAT THE ASSESSEE HAD EXPIRED ON 03/01/20 13 IE., BEFORE THE DATE OF THE ORDER OF LD.CIT(A) ON 28/03/2013. THEREFORE IN THE INTEREST OF JUSTICE, WE HEREBY REMIT THE MATTER BACK TO THE FILE OF THE LD. CIT(A) TO PASS APPROPRIATE ORDER AS PER LAW AND MER ITS AFTER BRINGING THE LEGAL HEIRS ON RECORD AND AFFORD ING SUFFICIENT OPPORTUNITY TO THEM OF BEING HEARD. IN VIEW OF THE ABOVE, THE QUANTUM APPEAL IS STILL P ENDING BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS), THE LEVY O F PENALTY IS ALSO REMITTED BACK TO THE FILE OF THE COMMISSIONER OF INCOME- TAX(APPEALS) FOR ADJUDICATING THE SAME AFTER DECIDI NG THE QUANTUM ADDITION BEFORE HIM. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.407/MDS/2015 IS ALLOWED FOR STATISTICAL PURPOSES . - - ITA 407, 408/15 ETC. 4 6. ITA NOS.408/MDS/2015 AND 582/MDS/2016 : THE FACTS OF THE CASE ARE THAT THE ASSESSMENT WAS C OMPLETED U/S.143(3) OF THE ACT VIDE ORDER DATED 30.12.2011, WHEREIN LONG TERM CAPITAL GAINS ADMITTED BY THE ASSESSEE, WERE E NHANCED AS PER THE PROVISIONS OF SEC.50C OF THE ACT. LATER, T HE COMMISSIONER OF INCOME-TAX TOOK UP THE MATTER U/S.2 63 OF THE ACT ON THE REASON THAT THE ASSESSEE HAS WRONGLY ADO PTED THE FINANCIAL YEAR 1981-82 FOR THE PURPOSE OF COST OF I NFLATION INDEX. ACCORDING TO THE CIT, THE IMPUGNED PROPERTIES WERE INHERITED TO THE ASSESSEE, ON 21.5.2002 ON THE DEMISE OF SMT. V. ANUSUYA DEVI, WIFE OF LATE V. VENUGOPAL. THUS, THE DATE OF DEMISE OF THE ASSESSEES MOTHER, SMT. ANUSUYA DEVI ON 21.5.2002 R ELEVANT TO THE FINANCIAL YEAR 2002-03 IS TO BE TAKEN AS APPLIC ABLE FOR THE PURPOSE OF APPLICATION OF COST OF INFLATION INDEX S O AS TO COMPUTE THE CAPITAL GAINS ARISING OUT OF SALE OF CAPITAL AS SETS. ACCORDINGLY, HE SET ASIDE THE ORIGINAL ASSESSMENT O RDER DATED 30.12.2011 AND DIRECTED THE AO TO PASS APPROPRIATE ORDER. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 7. THERE IS A DELAY OF 299 DAYS IN FILING THE APPEA L IN ITA NO.408/MDS/2015, BEFORE US. THE LD. AR DREW OUR AT TENTION TO THE CONDONATION PETITION FILED BY THE ASSE SSEE STATING THAT - - ITA 407, 408/15 ETC. 5 ON THE ADVICE OF SHRI SHREYANS BHANDARI, CA, HE HA NDED OVER CIT(APPEALS) ORDER TO SHRI T. BANUSEKAR, CA FOR FIL ING THE APPEAL BEFORE THE TRIBUNAL. THE APPEAL PAPERS WERE PREPA RED BY SHRI T. BANUSEKAR, CA AND HAS GIVEN TO THE ASSESSEE FOR SIGNATURE. IN TURN, THE ASSESSEE AFTER DULY SIGNING THE APPEAL PAPERS ALONG WITH APPEAL FEES, HANDED OVER THE SAME TO SMT. H. C HITRA, WHO IS THE ADMINISTRATION-IN-CHARGE IN THE OFFICE OF SHRI T. BANUSEKAR, CA, BUT SHE HAS MISPLACED THE SAME. 7.1 FURTHER, SMT. H. CHITRA, IN HER AFFIDAVIT STATE D THAT SHE HAS RECEIVED THE DULY SIGNED APPEAL PAPERS FROM THE SAI D ASSESSEE IN THE OFFICE OF SHRI T. BANUSEKAR, CA AND SHE HAS MISPLACED THE APPEAL PAPERS ALONGWITH FEES OF ` 1000/- FOR FILING APPEAL AMONG OTHER CLIENT PAPERS AND THE MISPLACEMENT OF APPEAL PAPERS CAME TO THE LIGHT ONLY WHEN THE ASSESSING OFFICER INITIA TED PROCEEDINGS U/S.143(3) R.W.S.263 OF THE ACT AND PASSED CONSEQUE NTIAL ORDER ON 5.2.2015. ACCORDINGLY, THE ASSESSEE APPROACHED SHRI SHREYANS BHANDARI, CA AND SUBMITTED THE APPEAL PAPE RS. ONCE AGAIN, SHRI T. BANUSEKAR, CA PREPARED THE CASE PAPE RS AND FILED THE APPEAL ON 25.2.2015 AND STATED THAT THE DELAY C AUSED IN FILING THE APPEAL IS UNINTENTIONAL AND IT IS BONA F IDE AND HE PRAYED TO ADMIT THE APPEAL FOR ADJUDICATION. - - ITA 407, 408/15 ETC. 6 8. HOWEVER, THE LD. DR OPPOSED THE ADMISSION OF THE APPEAL. ACCORDING TO HIM, THERE IS NO REASONABLE C AUSE FOR FILING THE APPEAL BELATEDLY. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, THE DELAY BEFORE US, IS 299 DAYS IN FILING THE APPEALS. NOW, WE HAVE TO CONSI DER, WHETHER REASONABLE PRUDENT PERSON WOULD DO SO. THE INFEREN CE OF SUCH DELAY HAS TO BE DRAWN ON THE BASIS OF CIRCUMSTANCES AVAILABLE ON RECORD AND CONDUCT OF THE ASSESSEE. AS HELD B Y THE MADRAS HIGH COURT IN THE CASE OF SREENIVAS CHARITABLE TRUS T, VS. DCIT (280 ITR 357), THE EXPRESSION SUFFICIENT CAUSE SH OULD BE INTERPRETED TO ADVANCE SUBSTANTIAL JUSTICE. THEREF ORE, ADVANCEMENT OF SUBSTANTIAL JUSTICE IS THE PRIME FAC TOR WHILE CONSIDERING THE REASON FOR CONDONING THE DELAY. AC CORDING TO THE LD. AR, REFUSAL TO CONDONE THE DELAY WOULD RESU LT IN A MERITORIOUS BEING THROWN AT THE VERY THRESHOLD, CAU SE OF JUSTICE BEING DEFEATED. AS AGAINST THIS, WHEN DELAY IS CON DONED, THE HIGHEST THAT CAN HAPPEN IS THAT A CASE WOULD BE DEC IDED ON MERIT AFTER HEARING THE PARTIES. ON THIS POINT, IT IS PE RTINENT TO DRAW THE RATIO LAID DOWN BY THE SUPREME COURT IN THE CASE OF COLLECTOR - - ITA 407, 408/15 ETC. 7 LAND ACQUISITION V. MST. KATIGI (167 ITR 471), WHER EIN IT WAS HELD AS UNDER : (1). ORDINARILY, A LITIGANT DOES NOT STAND TO BENEF IT BY LODGING AN APPEAL LATE. (2). REFUSING TO CONDONE DELAY CAN RESULT IN A MERITORIOUS MATTER BEING THROWN OUT AT THE VERY THR ESHOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THI S, WHEN DELAY IS CONDONED, THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARI NG THE PARTIES. (3). EVERY DAY'S DELAY MUST BE EXPLAINED DOES NOT MEAN THAT PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOUR'S DELAY, EVERY SECOND'S DELAY? THE DOCTR INE MUST BE APPLIED IN A RATIONAL, COMMON SENSE AND PRAGMATIC MANNER. (4). WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OTHER, THE C AUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FO R THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJ USTICE BEING DONE BECAUSE OF A NON-DELIBERATE DELAY. (5). THERE IS NO PRESUMPTION THAT DELAY IS OCCASION ED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN FACT, HE RUNS SERIOUS RIS K. (6). IT MUST BE GRASPED THAT THE JUDICIARY IS RESPE CTED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TE CHNICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUS TICE AND IS EXPECTED TO DO SO. 9.1 IN OUR OPINION, WHEN SUBSTANTIAL JUSTICE AND TE CHNICAL CONSIDERATION ARE PITTED AGAINST EACH OTHER, THE CA USE OF - - ITA 407, 408/15 ETC. 8 SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR T HE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT FOR INJUSTIC E BEING DONE BECAUSE OF NON-DELIBERATE DELAY. IN OUR OPINI ON, THE DELAY IN THIS CASE IS 299 DAYS, WHICH IS INORDINATE AND ALSO THE REASON STATED BY THE ASSESSEE IS NOT A REASONAB LE CAUSE FOR FILING THE APPEAL, BELATEDLY. WE HAVE GON E THROUGH THE REASON FOR DELAY AS DISCUSSED IN EARLIE R PARA. AS HELD BY THE MADRAS HIGH COURT IN THE CASE OF SRI NIVAS CHARITABLE TRUST CITED SUPRA, THERE WAS NO HARD AND FAST RULE CAN BE LAID DOWN IN THE MATTER OF CONDONATION OF DELAY AND COURTS SHOULD ADOPT A PRAGMATIC APPROACH AND TH E COURTS SHOULD EXERCISE THEIR DISCRETION ON THE FACT S OF THE EACH CASE KEEPING IN MIND THAT IN CONSTRUING, THE EXPRESSION SUFFICIENT CAUSE THE PRINCIPLE OF ADVA NCING SUBSTANTIAL JUSTICE IS OF PRIME IMPORTANCE AND THE EXPRESSION SUFFICIENT CAUSE SHOULD RECEIVE A LIBE RAL CONSTRUCTION. THEREFORE, THIS JUDGMENT OF THE MAD RAS HIGH COURT SAYS THAT IN ORDER TO ADVANCE SUBSTANTIAL JUS TICE, WHICH IS OF PRIME IMPORTANT, THE EXPRESSION SUFFIC IENT CAUSE SHOULD RECEIVE A LIBERAL CONSTRUCTION. - - ITA 407, 408/15 ETC. 9 9.2 IN THIS CASE, IN OUR OPINION, THE DELAY OF 299 DAYS IS ON ACCOUNT OF WRONG BELIEF BY THE ASSESSEE THAT THE C.A. WOULD HAVE FILED THE APPEAL AGAINST THE ORDER PASSE D U/S.263 OF THE ACT AND THE ASSESSEE CAME TO KNOW ON LY ON RECEIPT OF CONSEQUENTIAL ORDER TO THE ORDER PASSED U/S.263 OF THE ACT DATED 5.2.2015. IMMEDIATELY ON 25.2.2015 THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL CHALLENGI NG THE ORDER U/S.263 OF THE ACT. HENCE, IN OUR OPINION, W HEN DELAY IS FOR 299 DAYS, IT IS TO BE EXPLAINED BY THE ASSES SEE THAT THERE IS A REASONABLE CAUSE IN FILING THE APPEAL BE LATEDLY. AS HELD BY THE SUPREME COURT IN THE CASE OF MRS. SA NDHYA RANI SARKARV, SMT. SUDHA RANI DEBI AIR 1978 SC 537 SINCE THE CONDONATION OF DELAY IS THE DISCRETION OF THIS COURT AND IT WOULD DEPEND ON EACH CASE. 9.3 IN THE PRESENT CASE, THE ASSESSEES EXPLANATIO N CANNOT BE SAID TO BE REASONABLE BECAUSE THE ASSESSE E THAT IT HAS GIVEN THE COPY OF THE ORDER PASSED U/S. 263 TO THE C.A. TO FILE APPEAL AGAINST IT AND PAID APPEAL FEES ALSO. HOWEVER, THE ASSESSEE HAS NOT PRODUCED BEFORE US TH E COPY OF PAYMENT OF APPEAL FEES PAID BY IT AND ALSO THE ASSESSEE NEVER TOOK A PLEA BEFORE THE AO WHILE PASS ING - - ITA 407, 408/15 ETC. 10 THE CONSEQUENTIAL ORDER U/S.143(3) R.W.S. 263 OF TH E ACT THAT THE ASSESSEE HAS FLED APPEAL. EVEN OTHERWISE, THE ASSESSEE HAS ALSO NOT MADE ANY ARGUMENT WHILE ADJUDICATING THE APPEAL BY THE CIT(A) AGAINST THE CONSEQUENTIAL ORDER PASSED BY THE AO. THE REASONS ADVANCED BY THE ASSESSEE BY WAY OF AFFIDAVITS FILED BY THE ASSESSEE AS WELL AS BY ONE SMT. H. CHITRA, ARE ONLY PAPER WORK AND AN AFTERTHOUGHT. BOTH ARE SELF-SERVING DOCUMENTS. SINCE, THESE AFFIDAVITS ARE UNSUBSTANTI ATED AND NOT SUPPORTED ANY POSITIVE EVIDENCE, WE CANNOT GIVE ANY CREDENCE TO THESE TWO AFFIDAVITS. THE LAW WILL ASSIST THOSE WHO ARE VIGILANT, NOT THOSE WHO SLEEP OVER TH EIR RIGHTS. AFTER CONSIDERING THE SURROUNDING CIRCUMSTANCES AND APPLYING THE TEST OF HUMAN PROBABILITIES, ONE HAS T O REASONABLY CONCLUDE THAT THE PLEA OF THE ASSESSEE IS NOT GENUI NE. THE EXPLANATION OFFERED BY THE ASSESSEE FOR THE DELAY T O BE REJECTED AS DEVOID OF MERITS. WE FIND NO REASON TO CONDONE THE DELAY. ACCORDINGLY, THIS APPEAL IS NOT ADMITTED AND DISMIS SED. 10. ITA NO. 582/MDS/2016 : IN THIS APPEAL, THE ASS ESSEE IS CHALLENGING THE ORDER PASSED BY THE CIT(A), WHIC H IS - - ITA 407, 408/15 ETC. 11 EMANATING FROM THE ORDER OF THE AO PASSED U/S.143(3 ) R.W.S. 263 OF THE ACT THE IMPUGNEDPROPERTY WAS INH ERITED FROM THE ASSESSEES MOTHER, ANUSUYA DEVI. ORIGINAL LY, ANUSUYA DEVI PURCHASED THE SAID PROPERTY ALONG WITH LATE V. MOHAN RAO, SON OF LATE V. VENUGOPAL AND SHRI V. RAVINDRANATH, SON OF LATE V. VENUGOPAL FROM PRINCES S A.F.FAZILATUNNISA BEGUM VIDE DOC. NO.1303/1960 DT. 12.04.1960. LATER, ON THE DEMISE OF V. ANUSUYA DEV I, I.E. 21.5.2002, THE PROPERTY WAS DEVOLVED ON THE ASSESSE E AND ALSO ON MRS. R. REVATHY WIFE OF LATE G. RAMANATHAN, BEING THE LEGAL HEIRS OF LATE V. ANUSUYA DEVI. THE CONTE NTION OF THE DR IS THAT THE ASSESSEE HAS WRONGLY ADOPTED THE FINANCIAL YEAR 1980-81 FOR THE PURPOSE OF DETERMINI NG THE COST OF INFLATION INDEX INSTEAD OF FINANCIAL YEAR 2 002-03 RELEVANT TO THE AY 2003-04, AS THE PROPERTY WAS DEV OLVED ONLY ON 21.5.2002 ON THE DEATH OF HIS MOTHER. THE CONTENTION OF THE ASSESSEES COUNSEL IS THAT COST O F INFLATION INDEX OF THE SAID PROPERTY TO BE COMPUTED FROM 1.4. 1981. IN THIS CASE, THE ASSESSEES MOTHER ACQUIRED THE SA ID PROPERTY ALONG WITH LATE V. MOHAN RAO, SON OF LATE V. VENUGOPAL AND SHRI V. RAVINDRANATH, SON OF LATE V. - - ITA 407, 408/15 ETC. 12 VENUGOPAL ON 12.4.1960 AND AFTER THE DEATH OF THE ASSESSEES MOTHER, THE PROPERTY WAS DEVOLVED ON THE ASSESSEE. 11. AS PER SEC.49(1)(III)(A) OF THE ACT, WHEREAS THE CA PITAL ASSET BECAME THE PROPERTY OF THE ASSESSEE BY SUCCES SION, INHERITANCE OR DEVOLUTION, 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 COST OF ANY IMPROVEMENT INCURRED BY THE PREVIOUS OWNER OF THE A SSESSEE, AS THE CASE MAY BE. FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS, THE COST OF ASSET SHOULD BE REVISED UPWARDS BY APPLYING THE APPROPRIATE COST OF INFLATION INDEX. IF THE AS SET WAS ACQUIRED PRIOR TO 1 ST APRIL, 1981, THE COST OF INFLATION INDEX RELATING TO THE FINANCIAL YEAR 1981-82 IS REQUIRED TO BE APPLIED FO R THE PURPOSE OF ARRIVING AT THE INDEX COST OF ASSET. THE COMMI SSIONER OF INCOME-TAX(APPEALS) OBSERVED THAT THE ASSESSEE BECA ME THE OWNER OF THE PROPERTY UNDER CONSIDERATION ONLY ON 2 0.11.2005, WHICH WAS SOLD ON 2.2.2006 WITHIN A GAP OF 2 MONT HS AND IT IS RESULTED IN SHORT TERM CAPITAL GAINS. ACCORDING TO THE COMMISSIONER OF INCOME-TAX(APPEALS), THE ASSESSEE B ECAME THE OWNER OF THE PROPERTY ONLY ON 20.11.2005 AND TH ERE IS NO - - ITA 407, 408/15 ETC. 13 QUESTION OF CONSIDERATION OF COST OF ASSET IN TERMS OF SEC.49(1)(III)(A) OF THE ACT. 12. IT IS TO BE NOTED THAT THIS TRIBUNAL IN THE CAS E OF SMT. MINA DEOGUN V. ITO(19 SOT 183)(KOL.), AFTER CONSIDERING THE MEMORANDUM EXPLAINING THE FINANCE BILL 1992 AND CBD T CIRCULAR NO.636 DATED 13.8.1992 (107 CTR(ST.), HELD THAT INDEXATION IS TO BE ALLOWED IN RESPECT OF PERIOD OF HOLDING OF THE ASSET AND NOT IN RELATION TO THE INDIVIDUALITY OF T HE ASSESSEE. ACCORDINGLY, IT WAS HELD THAT FOR THE PURPOSE OF DE TERMINING THE PERIOD OF HOLDING, INTERMEDIATE TRANSFERS ON ACCOUN T OF SUCCESSION ARE TO BE IGNORED. SIMILARLY, IN THE CA SE OF SMT. PUSHPA SOFAT V. ITO (81 ITD 1), CHANDIGARH BENCH OF THIS TRIBUNAL HAS EXPRESSED SIMILAR VIEW. WE ALSO NOTI CED THAT AS PER THE PROVISIONS OF SEC.2(42A), EXPLANATION I(B), IT IS STIPULATED THAT IN DETERMINING THE PERIOD FOR WHICH ANY CAPITA L ASSET IS HELD BY THE ASSESSEE, IN THE CASE OF A CAPITAL ASSET WHI CH BECOMES THE PROPERTY OF THE ASSESSEE BY WAY OF SUCCESSION, INHERITANCE ETC., THE PERIOD FOR WHICH THE ASSET WAS HELD BY TH E PREVIOUS OWNER SHALL ALSO BE INCLUDED. 13. IT IS ALSO TO BE NOTED THAT IN THE CASE OF DCIT V. KISHORE KANUNGO (102 ITD 437), THE MUMBAI BENCH OF THIS TRI BUNAL, HELD - - ITA 407, 408/15 ETC. 14 THAT INDEXATION IS TO BE ALLOWED ONLY FROM THE YEAR IN WHICH THE ASSESSEE BECAME THE OWNER OF THE PROPERTY. CONTRAR Y TO THIS, VISHAKHAPATNAM BENCH IN THE CASE OF M. SIVAPARVATH I & OTHERS V. ITO (7 ITR (TRIB) 468) HELD THAT, THE ASSESSEE H AVING INHERITANT PROPERTY PURCHASED BY THE PREVIOUS OWNER IN THE YEAR 1974, THE COST OF ACQUISITION FOR THE PURPOSE OF CO MPUTATION OF CAPITAL GAINS ON THE SALE OF SUCH PROPERTY HAD TO B E COMPUTED BY APPLYING THE COST OF INFLATION INDEX BY FINANCIAL Y EAR 1981-82 AND NOT BY FINANCIAL YEAR 1989-90 I.E. THE YEAR OF INHE RITANCE BY THE ASSESSEE. THUS, IT IS A SETTLED PROPOSITION THAT W HEN TWO VIEWS ARE POSSIBLE, A VIEW WHICH IS IN FAVOUR OF THE ASSE SSEE, HAS TO BE ADOPTED. IN THIS REGARD, WE MAKE REFERENCE TO THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT V. VEGETABLE PRODU CTS LTD. (88 ITR 192). 14. IN VIEW OF THIS, WE HOLD THAT IN THE PRESENT CA SE, THE ASSESSEE INHERITED THE PROPERTY ON 21.5.2002. THE SAID PROPERTY WAS PURCHASED BY THE ASSESSEES MOTHER ON 12.4.1960 . AFTER THE DEATH OF THE ASSESSEES MOTHER, THE PROPERTY WA S INHERITED TO THE ASSESSEE ALONG WITH OTHER CO-OWNERS. ACCORDING LY, THE COST OF INDEXATION TO BE APPLIED AS ON 1.4.1981, AFTER F IXING THE VALUE OF THE ASSET AS ON 1.4.1981 AND IT CANNOT BE SAID T HAT THE - - ITA 407, 408/15 ETC. 15 ASSESSEE ACQUIRED PROPERTY UNDER DISPUTE ON 21.5.20 02 ON THE DEATH OF THE ASSESSEES MOTHER SO AS TO COMPUTE THE CAPITAL GAINS. IN OTHER WORDS, CAPITAL GAINS HAS TO BE ASS ESSED AS LONG TERM CAPITAL GAINS BY FIXING THE COST OF ASSET AS O N 1.4.1981 AND THEREAFTER APPLYING THE COST OF INFLATION INDEX IN TERMS OF SEC.49(1)(III)(A) OF THE ACT. SAME VIEW WAS TAKEN IN THE CASE OF CIT VS. MANJULA J. SHAH (355 ITR 474)(BOMBAY). CON SEQUENTLY, THE ASSESSEE IS ENTITLED TO EXEMPTION U/S.54 OF THE ACT. ACCORDINGLY, THIS APPEAL OF THE ASSESSEE IS ALLOWED . 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO.407/MDS/2015 IS ALLOWED FOR STATISTICAL PURPOSES AND ITA NO. 408/MDS/2015 IS DISMISSED AND ITA NO. 582/MDS/2016 IS ALLOWED. ORDER PRONOUNCED ON MONDAY, THE 6 TH OF JUNE, 2016 AT CHENNAI. SD/- SD/- ( ' . . 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