ACIT 16(2), MUMBAI V. VIJAY I MAHBUBANI, MUMBAI

ITA 6037/MUM/2012

• Counselvise Citation: 603719914 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2008-2009
• Appeal Filed On: 04-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: JITENDRA H SAKARIYA
• Keywords: Capital asset; Gift; Cost of acquisition
• Section: 143(3)

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. 6037 /MUM./ 2012 ( / ASSESSMENT YEAR : 20 08 09 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 16(2), MATRU MANDIR TARDEO ROAD, MUMBAI 400 007 .. / APP ELLANT V/S MRS. VIJAY I. MA HBUBANI 17, DEL STAR, N.S. PATKAR MARG HUGES ROAD, MUMBAI 400 036 .... / RESPONDENT ./ PERMANENT ACCOUNT NUMBER AADPM6905H / REVENUE BY : MR. SURENDRA KUMAR / ASSESSEE BY : MR. JITENDRA H. SAKARIYA / DATE OF HEARING 0 3. 12 .2013 / DATE OF ORDER 06.12.2013 / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APPEAL HAS BEE N PREFERRED BY THE REVENUE, CHALLENGING THE IMPUGNED ORDER DATED 25 TH JULY 2012 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 27 , MUMBAI , FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) FOR MRS. VIJAY I. MAHBUBANI 2 THE AS SESSMENT YEAR 2 008 09 . FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID . CIT(A) ERRED BY MERELY ACCEPTING THE ASSESSEE'S CONTENTION THAT REFERENCE TO INDEX COST OF ACQUISITION OF P ROPERTY BY WAY OF WILL AFTER HIS MOTHER ' S DEATH IS TO BE TAKEN AS OF 1981 AS ASSESSEE'S MOTHER OWNED THE PROPERTY BEFORE 1981 WITHOUT APPRECIATING THE FACT THAT ASSESSEE BECOME OWNER OF THE PROPERTY AFTER DEATH OF HIS MOTHER IN THE YEA R 1992 AND ACCORDINGL Y INDEX COST OF ACQUISITION SHOULD BE CALCULATED FROM THE YEAR 1992 AND NOT 1981 . WHETHER ON THE FACTS AND CIRCUMSTANCES . OF THE CASE AND IN LAW, WHILE COMPUTING THE CAPITAL GAINS ARISING ON TRANSFER OF A CAPITAL ASSET ACQUIRED BY THE ASSESSEE BY WAY OF WILL OF DECEASED MOTHER; WHETHER THE INDEXED COST OF ACQUISITION . HAS ; TO BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET OR THE YEAR IN WHICH THE ASSESSEE BECAME THE OWNER OF THE ASSET? 2 . THE ASSESSEE IS AN INDIVI DUAL AND HAS SHOWN LONG TERM CAPITAL GAIN OF ` 82,60,090 ON SALE OF INHERITED PROPERTY, WHICH DEVOLVED UPON HIM AFTER THE DEATH OF HIS MOTHER IN THE FINANCIAL YEAR 1992 93. THE PROPERTY WAS ACQUIRED BY HIS MOTHER ON 29 TH MARCH 1966 I.E., MUCH PRIOR TO 1 ST APRIL 1981. THE ASSESSEES MOTHER EXPIRED ON 24 TH MARCH 1991, AND AS PER HER WILL, THE FLAT WAS BEQUEATHED TO HER TWO SONS, VIJAY ISHWAR MAHBUBANI AND MR. RAJA ISHWAR MAHBUBANI, EQUALLY. LATER ON, ON 22 ND JUNE 1993, MR. RAJA ISHWAR MAHBUBANI, ALSO EXPIRED AND THEREAFTER HIS SHARE ALSO GOT BEQUEATHED TO MR. VIJAY ISHWAR MAHBUBANI. THE ASSESSING OFFICER HELD THAT INDEXATION CANNOT BE GIVEN FROM 1 ST APRI 1981, BUT FROM THE FINANCIAL YEAR 1992 93, WHEN THE ASSESSEE INHERITED WITH THE 50% SHARES FROM HIS MOTHER AND OTHER 50% OF THE PROPERTY WOULD BE GIVEN THE COST OF INDEXATION FROM THE FINANCIAL YEAR 1993 94, WHEN THE ASSESSEE INHERITED 50% FROM HIS BROTHER. THE ASSESSING OFFICER COMPUTED THE LONG TERM CAPITAL GAIN AT ` 1,27,04,496 AFTER TAKING THE COST OF INDEX ATION AT ` 28,06,754. THE DETAIL REASONING FOR COMING TO THIS CONCLUSION HAS BEEN GIVEN BY THE ASSESSING OFFICER IN PARA 3 FROM PAGE 1 OF THE ASSESSMENT ORDER. 3 . THE LEARNED COMMISSIONER (APPEALS) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AFTER FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN MRS. VIJAY I. MAHBUBANI 3 CIT V/S MANJULA J. SHAH, ORDER DATED 21 ST OCTOBER 2011, REPORTED IN [2011] 355 ITR 474 (BOM.). 4 . 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). 5 . 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 OWNER 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 I N DETAIL AFTER ANALYZING THE VARIOUS PROVISIONS OF THE ACT. THUS, RESPECTFULLY FOLLOWING THE JUDICIAL PRECEDENCE OF THE JURISDICTIONAL HIGH COURT, THE GROUND RAISED BY THE REVENUE IS TREATED AS DISMISSED. 6 . 6 . IN THE RESULT, REVENUES APPEAL IS TREATED AS DISMISSED. 6 TH DECEMBER 2013 ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH DECEMBER 2013 SD/ - SANJAY ARORA ACCOUN TANT MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 6 TH DECEMBER 2013 MRS. VIJAY I. MAHBUBANI 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, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI