INCOME TAX OFFICER (IT)-2(1)(1), MUMBAI V. SHRI PSALM SOLI DASTUR, MUMBAI

ITA 6428/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1460 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 01-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHI RAM KARTIKEYAN LD
• Assessee Lawyers: SUBHASH SHETTY LD
• Keywords: Cost of acquisition; Fair market value; Valuation report; Tax effect; Set aside
• Section: 143(3)

Judgement Text

ITA NO.6428/MUM/2017 SHRI PSALM SOLI DASTUR ASSESSMENT YEAR :2014-15 1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.6428/MUM/2017 ( / ASSESSMENT YEAR:2014-15 INCOME TAX OFFICER ( IT) - 2(1)(1) ROOM NO.1724, 17 TH FLOOR, AIR INDIA BLDG., NARIMAN POINT CHURCHGATE, MUMBAI-400 021. / VS. SHRI PSALM SOLI DASTUR 32/N, REGENCY TERRACE 17 TH ROAD, KHAR (W) MUMBAI-400 052. ./ ./PAN/GIR NO. ANPPD-5584-N ( ! /APPELLANT ) : ( '#! / RESPONDENT ) APPELLANT BY : ABHI RAM KARTIKEYAN - LD.DR RESPONDENT BY : SUBHASH SHETTY LD. AR / DATE OF HEARING : 18/03/2019 / DATE OF PRONOUNCEMENT : 22/03/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2014-15 CONTEST THE ORDER OF LD. COMMIS SIONER OF INCOME- TAX (APPEALS)-56, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT(A)-56/ITO(IT)-2(1)(1)/2016-17/162-D DATED 23/08/2017 ON FOLLOWING GROUNDS OF APPEAL: - ITA NO.6428/MUM/2017 SHRI PSALM SOLI DASTUR ASSESSMENT YEAR :2014-15 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY AO BY RELYING ON THE JUDGEMENT OF BOMBAY HIGH COURT IN THE CASE OF MANJULA SHAH VS DCIT REPORTED IN 355 IT R 474( BOM) (2013) WHEN THE SLP FILED IN THE SAID CASE IS PENDING BEFORE SC.' 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CLT(A) ERRED IN DIRECTING THE AO THAT INDEXED COST OF ACQUISITION SHOULD BE T AKEN FROM THE YEAR IN WHICH PREVIOUS OWNER ACQUIRED THE ASSET I.E. 01/04/1981 AND NOT FR OM THE YEAR IN WHICH ASSESSEE BECAME OWNER OF THE ASSET FOR THE PURPOSE OF COMPUT ATION OF LTCG.' 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD.CIT (A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . ' 2.1 FACTS ON RECORD REVEAL THAT THE ASSESSEE BEING NON-RESIDENT INDIVIDUAL WAS ASSESSED FOR IMPUGNED AY U/S 143(3) ON 15/12/20 16 AT RS.153.09 LACS AFTER CERTAIN ADJUSTMENTS AS AGAINST RETURNED INCOME OF RS.0.10 LACS E-FILED BY THE ASSESSEE ON 30/07/2014. 2.2 DURING ASSESSMENT PROCEEDINGS, IT TRANSPIRED TH AT THE ASSESSEE SOLD A PIECE OF LAND I.E. PLOT NO.3, ADMEASURING 514.42 SQUARE METERS SITUATED AT VILLAGE BANDIVALI, NEAR CAVES ROAD, JOG ESHWARI (E), MUMBAI FOR SALE CONSIDERATION OF RS.160 LACS. THE COST OF ACQUISITION OF THE SAME WAS TAKEN AS RS.20.57 LACS, BEING FAIR MARKET VALUE OF THE LAND AS ON 01/04/1981 BASED ON VALUATION REPORT OF GOVERNME NT REGISTERED VALUER. THE INDEXED COST BY APPLYING APPLICABLE COST INFLATION INDEX WAS WORKED OUT TO BE RS.193.21 LACS AND ACCORDINGLY, LONG TERM CAPITAL LOSS WAS REFLECTED AS RS.33.21 LACS. THE ONLY POINT OF D ISPUTE UNDER APPEAL IS APPLICABLE COST OF ACQUISITION OF THE SAI D PLOT OF LAND. 2.3 UPON PERUSAL OF OWNERSHIP DOCUMENTS, IT TRANSPI RED THAT THE SAID PLOT OF LAND DEVOLVED UPON ASSESSEE VIDE DEED OF SE TTLEMENT DATED 11/05/1987 EXECUTED BY THE SETTLOR OF THE LAND DR.ADI ERUCH DASTUR IN FAVOR OF CERTAIN TRUSTEES FOR THE BENEFIT OF THE AS SESSEE SINCE ASSESSEE WAS MINOR AT THAT POINT OF TIME. THE TRUSTEES CONSE NTED TO ACT AS SUCH TILL ITA NO.6428/MUM/2017 SHRI PSALM SOLI DASTUR ASSESSMENT YEAR :2014-15 3 THE ASSESSEE ATTAINED THE AGE OF 18 YEARS. THE MARK ET VALUE OF THE PLOT ON THE DATE OF SETTLEMENT AS CITED IN THE DEED OF S ETTLEMENT, IN TERMS OF VALUATION REPORT DATED 30/10/1986, WAS STATED TO BE RS.1.12 LACS. THE SAME LED THE LD. AO TO FORM AN OPINION THAT THE COS T OF ACQUISITION WAS TO BE TAKEN AS RS.1.12 LACS AS AGAINST RS.20.57 LAC S TAKEN BY THE ASSESSEE AND THE APPLICABLE COST OF INDEX WOULD BE THE INDEX FOR AY 1987-1988. ALTHOUGH THE ASSESSEE DEFENDED THE SAME ON THE STRENGTH OF DECISION OF HONBLE BOMBAY HIGH COURT RENDERED I N CIT VS. MANJULA J.SHAH [16 TAXMANN.COM 42], HOWEVER, NOT CONVINCED, LD. AO ADOPTED THE COST OF ACQUISITION AS RS.1.12 LACS AND RE-WORK ED THE GAINS AT RS.152.98 LACS. THE LD. AO, INTER-ALIA, OBSERVED THAT THE REVENUE WAS UNDER APPEAL BEFORE HONBLE SUPREME COURT AGAINST T HE CITED DECISION OF HONBLE BOMBAY HIGH COURT. 3. AGGRIEVED, THE ASSESSEE AGITATED THE SAME WITH S UCCESS BEFORE LD. FIRST APPELLATE AUTHORITY VIDE IMPUGNED ORDER D ATED 23/08/2017 WHEREIN THE APPEAL WAS ALLOWED IN TERMS OF CITED DE CISION OF HONBLE BOMBAY HIGH COURT. AGGRIEVED, THE REVENUE IS IN FUR THER APPEAL BEFORE US. 4. THE LD. AUTHORISED REPRESENTATIVE FOR ASSESSEE, AT THE OUTSET, SUBMITTED THAT SPECIAL LEAVE PETITION FILED BY THE DEPARTMENT AGAINST THE CITED DECISION HAS ALREADY BEEN DISMISSED BY HONBL E APEX COURT, ALTHOUGH ON ACCOUNT OF LOW TAX EFFECT VIDE SLP(C) NO. 8184/2014 DATED 18/09/2018 AND THEREFORE, THE MATTER HAS ATTAINED FINALITY & IS SQUARELY COVERED BY THE BINDING JUDICIAL PRECEDENT. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THE SAID LEGAL POSITION. ITA NO.6428/MUM/2017 SHRI PSALM SOLI DASTUR ASSESSMENT YEAR :2014-15 4 5. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD. THE UNDISPUTED POSITIO N THAT EMERGES IS THAT THE ASSESSEE HAS ACQUIRED THE SAID LAND THROUGH GIF T / INHERITANCE VIDE DEED OF SETTLEMENT DATED 11/05/1987. THE SAID LAND WAS ACQUIRED BY THE OWNER / DONOR / SETTLOR BEFORE 01/04/1981. THEREFOR E, FOR THE PURPOSE OF COMPUTING ASSESSEES HOLDING PERIOD, THE HOLDING PE RIOD OF THE OWNER / DONOR / SETTLOR WAS ALSO TO BE COUNTED WHILE WORKIN G OUT THE CAPITAL GAINS. FURTHER, THE BENEFIT OF INDEXATION WOULD ALS O BE AVAILABLE TO THE ASSESSEE AS AVAILABLE TO THE OWNER / DONOR / SETTLO R. THE SAID LEGAL POSITION IS SQUARELY IN LINE WITH THE BINDING JUDIC IAL PRECEDENT IN THE SHAPE OF CITED DECISION OF HONBLE BOMBAY HIGH COUR T WHICH HAS ALREADY ATTAINED FINALITY BY WAY OF DISMISSAL OF REVENUES SLP . THE FIRST APPELLATE AUTHORITY HAS PROVIDED RELIEF TO THE ASSESSEE BY FO LLOWING THE SAME AND THEREFORE, NO INFIRMITY COULD BE FOUND IN THE SAME. 6. RESULTANTLY, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/03/2019 SD/- SD/- (MAHAVIR SINGH) (MAN OJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 22/03/2019 SR.PS, JAISY VARGHESE !'#$ # / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '#! / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. +, '%- , - , / DR, ITAT, MUMBAI 6. ,./0 / GUARD FILE ITA NO.6428/MUM/2017 SHRI PSALM SOLI DASTUR ASSESSMENT YEAR :2014-15 5 / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.