ASST CIT 18(3), MUMBAI V. SHALINI RAMESH KHIANI, MUMBAI

ITA 7071/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6868 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2013-2014
• Appeal Filed On: 05-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AARJU GARODIA
• Keywords: Cost of acquisition
• Section: 54F

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE HONBLE SH. SHAMIM YAHYA , AM & HONBLE SH. SANDEEP GOSAIN, JM ./ I.T.A. NO . 7071 /MUM/2016 ( / ASSESSMENT YEAR: 2013 - 14 ) A CIT - 18 (3) ROOM NO. 609 , 6 TH FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI - 40002 1 / VS. SMT. SHALINI RAMESH KHIANI, 1 ST FLOOR, SHIRIN MANSION, 74, TRINITY STREET, DHOBI TALAO, MUMBAI - 400002 . ./ ./ PAN NO. AA FPK7886B ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : MS. AARJU GARODIA , DR / RESPONDENTBY : SHRI DEEPAK TRALSHAWALA , AR / DATE OF HEARING : 05.06 .1 8 / DATE OF PRONOUNCEMENT : 06.06.16 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT (APPEAL) 29, MUMBAI DATED 14.09.16 F OR AY 20 13 - 14 ON THE GROUNDS MENTIONED HEREIN BELOW: - 2 I.T.A. NO. 7071 /MUM/201 6 SMT. SHALINI RAMESH KHIANI , 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE AGAINST THE RE - COMPUTATION OF LTCG BY THE AO AT RS. 1,03,88,560/ - VIS - A - VIS RS.44,80,3491 - COMPUTED BY THE ASSESSEE IN RESPECT OF THE PROPERTY ACQUIRED BY THE ASSESSEE BY WAY OF INHERITANCE. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN REJECTING THE AO'S CALCULATION OF THE LTCG IN ALLOWING THE INDEXATION COST U/S. 49 WITH EFFECT FROM THE DATE OF INHERITANCE, I.E. 03.01 .2010. 3. FOR THE ABOVE MENTIONED REASON AND ANY OTHER REASONS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS REQUESTED THAT THE ORDER OF THE CIT(A) BE QUASHED AND THAT OF THE A.O. BE RESTORED. 4. THE APPELLANT CR AVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY.' 2. THE B RIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND HAS FILED HER RETURN OF INCOME FOR THE A.Y.2013 - 14 ON 24.09.2013 DECLARING TOTAL TAXABLE INCOME OF RS.46,72,970/ - . 3 I.T.A. NO. 7071 /MUM/201 6 SMT. SHALINI RAMESH KHIANI , THE ASSESSEE HAS SOLD HER 50% SHARE IN THE PROPERTY AT FLAT NO.112, VALLABH APARTMENT, V.K. NATHA CGS, BH ULABHAI DESAI RD, MUMBAI FOR A CONSIDERATION OF RS.3,15,00,000/ - TO HER SISTER, SMT. ANITA B OADITA. THE MARKET VALUE OF THE TRANSAC TION WAS RS 3,00,06,400/ - . THE ASSESSEE PURCHASED ANOTHER PROPERTY AT FL AT NO. 55, DHARAM JYOT I, JOINTLY WITH HER SON IN L AW, SHRI. MANISH BALLANI FOR A CONSIDERATION OF RS .3,20,00,000/ - . OUT OF THE TOTAL COST, THE ASSESSEE PAID AN AMOUNT OF RS 2,00,00,875 / - AND THE BA LANCE HAS BEEN PAID BY SHRI MANISH BAL L ANI . SHE HAS CL AIMED EXEMPTION U/S 54F FOR THE INVESTMENT MADE BY HER WHICH HAS BEEN ALLOWED BY THE AO. THE ON L Y ISSUE IN QUESTION IS COMPUTA TION OF CAPITAL GAIN FOR THE PROPER TY SOLD BY HER TO HER SISTER . THIS ORIGINAL PR OPERTY WAS ACQUIRED BY ASSESSEE 'S PARENTS, MR. MOHAN G. MUKHEY AND MRS. NEENA MOHAN MUKHEY IN THE YEAR 1974. PURSUANT TO THE DEATH OF SHRI. MOHAN MUKHEY ON 5.3.1986, 50% OF THE SHARE BELONGING TO HI M WAS INHERITED BY HIS WIFE, SM T. NEENA MUKHEY. AFTER THE DEMISE OF SMT. NEENA MUKHEY ON 27.2.2009, THE S AID FLAT WAS INHERITED BY THEIR TWO DAUGHTERS, MRS: ANITA BOADITA AND MR S. SHALINI KHIANI, THE ASSESSEE , ON 3.1.2010. SUBSEQUENTLY ON 18.12.2012, THE ASSESSEE 4 I.T.A. NO. 7071 /MUM/201 6 SMT. SHALINI RAMESH KHIANI , SOLD HER 50% SHARE TO HER SISTER, ANITA BOADITA FOR A CONSIDERATION OF RS.3,15,00,000/ - . WHILE CALCULATING THE LTCG, THE ASSESSEE HAS CONSIDERED THE CO ST OF ACQUISITION AS THE C OST ON 1.4.1981 WHICH WAS RS.16,47,600/ - . THE ASSESSEE HAS ADOPTED THE COST OF RS.8,23,800/ - BEING 50% OF THE TOTAL COST. WHILE CAL CULATING THE INDEXED COST OF ACQ UISITION, THE ASSESSEE HAS ADOPTED COST INFLATION INDEX OF 1981 AND HAS ARRIVED AT A TAXABLE C APITAL GAIN OF RS.44,80,349/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE AO RELIED ON THE DEFINITION OF INDEXED COST OF ACQUISITION GIVEN AT EXPLANATION (III) TO SECTION 48 OF THE I .T. ACT AND HAS ADOPTED THE COST INFLATION INDEX OF F.Y.2009 - 10 INSTEAD OF 1981. W HILE CALCUL AT ING THE INDEXED COST OF A CQUISITION AND MADE AN AD DITION OF RS.59,08,200/ - TO THE LICG. AGGRIE VED BY THE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES , ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITIONS. NOW BEFORE US, TH E REVENUE HAS PREFERRED THE PRESENT APPEAL BY RAISING THE ABOVE GROUNDS. 5 I.T.A. NO. 7071 /MUM/201 6 SMT. SHALINI RAMESH KHIANI , GROUND NO. 1 & 2 . 3. THESE GROUND RAISED BY THE REVENUE ARE INTER - RELATED AND INTER - CONNECTED AND RELATES TO CHA LLENGING THE ORDER OF LD. CIT(A) IN ALLOWING THE APPEAL OF THE ASSESSEE AGAINST THE RE - COMPUTATION OF LTCG BY THE AO AT RS. 1,03,88,560/ - VIS - A - VIS RS.44,80,3491 - COMPUTED BY THE ASSESSEE IN RESPECT OF THE PROPERTY ACQUIRED BY THE ASSESSEE BY WAY OF INHERITANCE, THEREFORE WE THOUGHT IT FI T TO DISPOSE OF THE SAME BY THIS COMMON ORDER. 4. WE HAVE HEARD COUNSELS FOR BOTH THE PARTIES AT LENGTH AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. BEFORE WE DECIDE THE MERITS OF THE CASE, IT IS NECESSARY TO EVALUATE THE ORDERS PASSED BY LD. CIT(A). THE LD. CIT(A) HAS DEALT WITH THE ABOVE GROUNDS RAISED BY THE REVENUE IN PARA NO. 3(3.1 TO 3.3.3) OF ITS ORDER. AFTER HAVING GONE THROUGH THE ORDERS PASSED BY LD. CIT(A) AS WELL AS FACTS OF THE PRESENT CASE , WE FIND THAT LD. CIT(A) HAS RIGHTLY APPRECIATED THE FACTS OF THE PRESENT CASE BY 6 I.T.A. NO. 7071 /MUM/201 6 SMT. SHALINI RAMESH KHIANI , RELYING UPON THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF MANJULA J. SHAH (2011) 16 TAXAMIN.COM 4 2 AND RIGHTLY C OME TO THE CONCLUSION THAT IN CASE OF ASSETS COVERED U/S 49(1) OF I.T. ACT, THE PERIOD OF HOLDING THE ASSET HAS TO BE DETERMINED BY INCLUDING THE PERIOD FOR WHICH THE SAID ASSET WAS HELD BY THE PREVIOUS OWNER AND IN ARRIVING AT INDEXATION, T HE FIRST YEAR IN WHICH THE SAID ASSET WAS HELD BY THE PREVIOUS OWNER WOULD BE THE FIRST YEAR FOR WHICH THE ASSET WAS HELD BY THE ASSESSEE . WE ALSO FIND THAT LD. CIT(A) HAD CORRECTLY RELIED UPON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF MANJULA J. SHAH (2011) 16 TAXAMIN.COM 42 , WHICH WAS DECIDED ON SIMILAR ISSUE IN FAVOUR OF ASSESSEE, THEREFORE LD. CIT(A) HAS RIGHTLY ALLOWED THE APPEAL OF THE ASSESSEE BY TAKING INTO ACCOUNT THAT THE CORRECT COST INFLATION INDEX WOULD BE THE INDEX FOR THE YEAR 1981 AS PROPERTY IN QUESTION WAS OWNED BY THE PREVIOUS OWNER PRIOR TO 01.04.1981. MOREOVER, N O NEW FACTS OR CONTRARY JUDGMENTS HAVE BEEN BROUGHT ON RECORD BEFORE US I N ORDER TO CONTROVERT OR REBUT THE FINDINGS SO RECORDED BY LD CIT(A). THEREFORE, TH ERE ARE NO REASON S FOR US TO INTERFERE INTO OR DEVIATE FROM THE FINDINGS 7 I.T.A. NO. 7071 /MUM/201 6 SMT. SHALINI RAMESH KHIANI , RECORDED BY THE LD.CIT(A). HENCE , WE ARE OF THE CONSIDERED VIEW THAT THE FINDINGS SO RECORDED BY THE LD. CIT (A) ARE JUDICIOUS AND ARE WE LL REASONED. RESULTANTLY, THESE GROUND RAISED BY THE REVENUE STANDS DISMISSED . GROUND NO. 3 & 4 5 . THESE GROUND ARE GENERAL IN NATURE, THUS REQUIRES NO SPECIFIC ADJUDICATION. 6 . IN THE NET RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JUNE , 2018 SD/ - SD/ - ( SHAMIM YAHYA ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 06 . 06 .201 8 SR.PS . DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, 8 I.T.A. NO. 7071 /MUM/201 6 SMT. SHALINI RAMESH KHIANI , . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI