Shri Dinesh Kumar Gupta, New Delhi V. ACIT, New Delhi

ITA 5848/DEL/2010

• Counselvise Citation: 584820114 RSA 2010
• Duration Of Justice: 3 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 05-08-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 22-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR CHOPRA
• Assessee Lawyers: V RAJ KUMAR
• Keywords: Gift; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER & SHRI J.S. REDDY, ACCOUNTANT MEMBER ITA NO. 5848/DEL/2010 ASSESSMENT YEAR: 2006-07 DINESH KUMAR GUPTA, VS. ACIT, 1980, GALI PRANTHE WALI, CIRCLE 29(1), CHANDNI CHOWK, DRUM SHAPED BLDG., NEW DELHI. NEW DELHI. AACPG7104K (APPELLANT) (RESPONDENT) ITA NO. 5849/DEL/2010 ASSESSMENT YEAR: 2006-07 MUKESH KUMAR GUPTA, VS. ACIT, 1386-87, S.B. SARAFA MARKET, CIRCLE 29(1), CHANDNI CHOWK, DRUM SHAPED BLDG., NEW DELHI. NEW DELHI. AEGPG2648G (APPELLANT) (RESPONDENT) ITA NO. 5850/DEL/2010 ASSESSMENT YEAR: 2006-07 MANOJ KUMAR GUPTA, VS. ACIT, 1980, GALI PRANTHE WALI, CIRCLE 29(1), CHANDNI CHOWK, DRUM SHAPED BLDG., NEW DELHI. NEW DELHI. AEFPG2761P (APPELLANT) (RESPONDENT) & ITA NOS. 5848 TO 5851/D/2010 2 ITA NO. 5851/DEL/2010 ASSESSMENT YEAR: 2006-07 RAKESH KUMAR GUPTA, VS. ACIT, 1386-87, S.B. SARAFA MARKET, CIRCLE 29(1), CHANDNI CHOWK, DRUM SHAPED BLDG., NEW DELHI. NEW DELHI. AEGPG2644L (APPELLANT) (RESPONDENT) APPELLANT BY : SH. V. RAJ KUMAR, ADV. RESPONDENT BY : SH. MANOJ KUMAR CHOPRA. SR. DR ORDER PER DIVA SINGH, J.M. THESE FOUR APPEALS FILED BY THE FOUR BROTHERS AND HAVING 1/4 TH SHARE EACH IN THE PROPERTY 4319/1, 3 ANSARI ROAD, DARYA G ANJ, NEW DELHI ARE BEING DECIDED BY A COMMON ORDER FOR THE SAKE OF CON VENIENCE. THESE APPEALS OF FOUR DIFFERENT ASSESSEES ARISE OUT OF THE SEPARATE ORDER OF CIT(A)-XXV, NEW DELHI DATED 01/12/2010 PERTAINING T O 2006-07 ASSESSMENT YEAR. THE ASSESSEES HAVE RAISED VARIOUS GROUNDS IN THEIR RESPECTIVE APPEALS RELYING UPON ORDERS OF THE TRIBUNAL SMC BEN CH, CHANDIGARH AND SPECIAL BENCH MUMBAI NAMELY MRS. PUSHPA SOFAT VS IT O (2002) 81 ITD 1 (CHD) (SMC) AND DCIT VS. MANJULA J. SHAH (2009) 318 ITR (AT) 417 (MUM.) (SB) RESPECTIVELY CONTENDING THAT THE CIT(A) HAS NOT DEALT WITH THE ISSUE AS PER THE PRINCIPLES LAID DOWN IN THE SAID ORDERS ACCORDINGLY THE IMPUGNED ORDER IS ASSAILED TO BE VIOLATIVE OF NATUR AL JUSTICE. FOR A READY REFERENCE WE REPRODUCE GROUND NO. 6 RAISED IN THE P RESENT APPEAL: 6. THE LD. CIT(APPEALS) ERRED IN ADOPTING THE YEA R OF ACQUISITION OF THE PROPERTY IN THE HANDS OF APPELLANT BEING THE DA TE OF DEATH OF SMT. URMILA DEVI AND NOT THE DATE ON WHICH SHE BECAME TH E OWNER OF THE PROPERTY NO. 4319/3 AMSARI ROAD, DARIYA GANJ NEW DE LHI AS PROVIDED FOR IN SECTION 49(1) OF THE ACT ON THE FAC TS AND CIRCUMSTANCES OF THE CASE. ITA NOS. 5848 TO 5851/D/2010 3 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE FATH ER OF THE FOUR ASSESSEES IN THE PRESENT PROCEEDINGS SH. OM PRAKASH GUPTA HAD PURCHASED A PROPERTY AT 4319/1, ANSARI ROAD, DARYAG ANJ, NEW DELHI VIDE THE SALE DEED DATED 28/03/1974. SUBSEQUENTLY HE HAD EX ECUTED A WILL DATED 02/04/1975 IN FAVOUR OF HIS WIFE SMT. URMILA DEVI A ND GAVE THE PROPERTY TO HIS WIFE. THEREAFTER SH. OM PRAKASH GUPTA EXPIRED ON 04/05/1975. THE MUTATION OF THE PROPERTY WAS DONE IN THE NAME OF SM T. URMILA DEVI VIDE THE MUTATION DATED 11/02/1987. SMT. URMILA DEVI HAD MA DE SOME CONSTRUCTIONS IN THE SAME PROPERTY. SMT. URMILA DEVI ALSO MADE A WILL DATED 11/06/1998 GIVING HER PROPERTY TO HER FOUR SONS THE PRESENT A SSESSEES. EACH BROTHER AS A RESULT THEREOF INHERITED 1/4 TH SHARE IN THE AFORESAID PROPERTY. SMT. URMILA DEVI EXPIRED ON 16/08/1998 (FY 1998-99). THE SAID PROPERTY WAS MUTATED ON 14/11/2005 FOR A TOTAL CONSIDERATION OF RS. 61 L AKHS AND EACH BROTHER RECEIVED THE 1/4 TH SHARE OF RS. 15,25,000/- EACH. 3. THE ASSESSEE CLAIMED BEFORE THE AO THAT THE TOTA L COST OF THE PROPERTY WAS RS. 4,53,510/- AND 1/4 TH SHARE OF EACH BROTHER WAS OF RS. 1,13,377/-. TEACH OF THE BROTHERS HAD SHOWN THE CO ST OF 1/4 TH SHARE OF THE PROPERTY OF RS. 1,06,125/- AND THE SALE CONSIDERATI ON OF 1/4 TH OF THE EACH BROTHER WAS RS. 15,25,000/-. EACH OF THE BROTHERS/ ASSESSEE HAD INVESTED RS. 11 LAKHS EACH IN REC BONDS AND CLAIMED DEDUCTIO N OF THE CAPITAL GAIN U/S 54EC. SO, IT WAS CLAIMED THERE WAS NO TAXABLE CAPITAL GAIN IN THE HANDS OF THE ASSESSEES. THE ASSESSES HAD TAKEN THE INDEX ATION FOR THE COST OF THE PROPERTY AT RS. 109/- OF THE FY 1982-83. 3.1. THE AO HAD FOUND SOME MISTAKES REGARDING THE C OST OF ACQUISITION OF THE PROPERTY AND HAD INSTEAD TAKEN THE SAME AT RS. 1,13,377/- FOR EACH OF THE BROTHERS. THIS MISTAKE HAS BEEN ACCEPTED BY TH E ASSESSES. THE AO HAD TAKEN THE INDEXATION FOR THE COST OF THE PROPER TY AS PER SECTION 48 R.W. THE CLAUSE (III) OF THE EXPLANATION THERETO OF FY 1 998-99 @ RS. 352/- ON THE GROUND THAT THE ASSESSES BECAME THE OWNER OF THE PR OPERTY AFTER THE DEATH ITA NOS. 5848 TO 5851/D/2010 4 OF THEIR MOTHER, WHO EXPIRED ON 16/08/1998 I.E. FY 1998-99. THE AO ACCORDINGLY COMPUTED THE INDEXED COST OF ACQUISITIO N OF RS. 1,60,537/- AND AFTER ALLOWING THE EXEMPTION U/S 54EC OF RS. 11 LAK HS, THE NET LONG TERM CAPITAL GAIN WAS COMPUTED AT RS. 2,64,463/- IN THE CASE OF EACH OF THE ASSESSEES. 4. THE CLAIM OF THE ASSESSEE THAT THE COST OF ACQUI SITION SHOULD BE TAKEN U/S 49(1)(II) I.E. THE COST OF ACQUISITION OF THE P ROPERTY TO THE PREVIOUS OWNER I.E. THE COST TO THE MOTHER SMT. URMILA DEVI WAS NO T ACCEPTED BY THE AO HOLDING THAT THE FOUR BROTHERS BECAME THE LEGAL HEI RS I.E. THE OWNER OF THE PROPERTY ONLY AFTER THE DEATH OF THEIR MOTHER ON 16 /08/1998. ACCORDINGLY, THE CLAIM OF THE ASSESSEE WAS DISALLOWED. THE SAID ACT ION WAS CONFIRMED IN APPEAL BEFORE THE CIT(A). HENCE THE PRESENT APPEAL S BEFORE THE TRIBUNAL. 5. LD. AR RELYING UPON THE JUDGMENT OF DELHI HIGH C OURT IN THE CASE OF ARUN SHUNGLOO TRUST VS. CIT, (2012) 249 CTR (DEL.) 294 CONTENDED THAT THE CIT(A) HAS ERRED IN DENYING THE CLAIM OF THE ASSESS EE IGNORING THE FACT THAT BEFORE HIM THE ORDER OF THE SPL. BENCH IN THE CASE OF MANJULLAH J. SHAH LAYING DOWN THE SAME PRINCIPLE WAS RELIED UPON. 6. THE LD. SR. DR PLACES RELIANCE UPON THE IMPUGNED ORDER NO CONTRARY DECISION IN SUPPORT OF THE DEPARTMENTS STAND WAS C ITED BY THE LD. SR. DR. 6.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SEEN THAT THE ISSUE AS TO THE COST OF ACQUISITION STIPULATED U/S 49 IS NO LONGER RES INTEGRA IN CASES WHERE THE PROPERTY HAS DEVOLVED UPON THE ASSESSEE BY WAY OF INHERITANCE OF GIFT ETC. AND FOR THE PURPOSES OF INDEXATION IT IS THE COST OF THE PROPER TY TO THE PREVIOUS OWNER WHICH IS REQUIRED TO BE TAKEN INTO CONSIDERATION. ON THIS ISSUE NOT ONLY THERE IS A JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN T HE CASE OF ARUN SHUNGLOO TRUST VS. CIT CITED (SUPRA) AVAILABLE ON RECORD, WH EREIN THE ORDER OF THE TRIBUNAL WAS REVERSED AND THE CLAIM OF THE ASSESSEE WAS ALLOWED BY THE HONBLE DELHI HIGH COURT. THE SAID DECISION RELIED ON THE DECISION IN THE ITA NOS. 5848 TO 5851/D/2010 5 CASE OF CIT VS. MANJULLAH J. SHAH (2013) 355 ITR 4 74 (BOM.) WHICH WAS UPHELD BY THE HONBLE BOMBAY HIGH COURT. IT IS SEE N THAT CONTRARY TO THIS VIEW THERE IS NO JUDGEMENT EITHER OF THE DELHI HIGH COURT OR THE APEX COURT ON THE SAID ISSUE. ON THE CONTRARY THIS IS A CONSI STENT STAND TAKEN BY THE DELHI BENCHES ALSO ON THE ISSUE AS HAS BEEN CONSIDE RED AT LENGTH IN ORDER DATED 11.07.2014 IN ITA NO.6444/DEL/2012 IN THE CAS E OF DCIT VS SHEETAL BEHL. ACCORDINGLY IN VIEW OF THE POSITION OF LAW O N THE ISSUE AT HAND THE APPEALS OF THE ASSESSEES HAVE TO BE ALLOWED. THE S AID ORDER WAS PRONOUNCED ON THE DATE OF HEARING ITSELF IN THE PRE SENCE OF THE PARTIES. 7. IN THE RESULT THE APPEALS OF THE ASSESSEES ARE A LLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 29 TH OF AUGUST 2014. SD/- SD/- (J.S. REDDY) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:29/08/2014 *KAVITA/AMIT KUMAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR