NIRMALA J. MODI, MUMBAI V. I.T.O. 26(1)(1), MUMBAI

ITA 7212/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8633 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 24-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NITISH JOSHI
• Keywords: Capital asset; Gift; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B BENCH BEFORE SHRI B.R.MITTAL(JUDICIAL MEMBER) AND SHRI RAJENDRA (ACCOUNTANT MEMBER) ITA NO.7212/MUM/2011 ASSESSMENT YEAR: 2007-08 NIRMAL J MODI, BLOCK NO.2, KAUSTUBH MANSION CHS, PANDIT GUNTDAS MARG, MAHIM, MUMBAI-16 PA NO.AAZPM 9383 R ITO 26(1)(1), SMT. K.G.MITTAL AYURVEDIC HOSPITAL BLDG., CHARNI ROAD, MUMBAI-02. (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI NITISH JOSHI RESPONDENT BY: SHRI MOHIT JAIN DATE OF HEARING: 27 .9.2012 DATE OF PRONOUNCEMENT: 10 .10.2012 ORDER PER B.R.MITTAL, JM: THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2007-08 AGAINST ORDER DATED 25.8.2011 OF LD CIT(A)-28, MUMBAI ON THE FOL LOWING GROUNDS: 1. LD CIT(A) ERRED IN CONFIRMING THE CONTENTION OF THE AO THAT THE BENEFIT OF INDEXATION IS AVAILABLE ONLY FROM THE DA TE OF INHERITANCE OF THE PROPERTY BY THE APPELLANT AND NOT FROM APRIL 1, 198 1 AND THUS DENYING THE BENEFIT OF INDEXATION TO THE APPELLANT FROM APR IL 1, 1981 TILL THE DATE OF INHERITANCE OF THE PROPERTY BY THE APPELLANT. 2. LD CIT(A) ERRED IN NOT FOLLOWING THE BINDING DEC ISION OF ITAT IN THE CASE OF DCIT VS MANJULA J SHAH, 318 ITR 417(SB) AND THE KOLKATA BENCH OF THE ITAT IN THE CASE OF SMT. MINA DEOGUN VS ITO, 19 SOT 183, WHEREIN, IT HAS BEEN HELD THAT THE COST OF ACQUISIT ION OF THE ASSET ACQUIRED SHALL BE DEEMED TO BE THE COST AT WHICH TH E PREVIOUS OWNER ACQUIRED IT AND HENCE INDEXATION BENEFIT IS TO BE A LLOWED FROM DATE OF PURCHASE OF ORIGINAL OWNER. ITA NO.7212/MUM/2011 ASSESSMENT YEAR: 2007-08 2 2. WE HAVE CONSIDERED SUBMISSIONS OF LD REPRESENTAT IVES OF PARTIES AND ORDERS OF AUTHORITIES BELOW. 3. WE OBSERVE THAT ASSESSEE RECEIVED THE PROPERTY F ROM HER FATHER SHRI JAGANANTH BABUBHAI GUJAR ON DEATH OF HER FATHER ON 29.6.1995. THE ASSESSEE SOLD THE SAID PROPERTY IN THE IMPUGNED YEAR. ASSESSEE WORKED OUT THE COST OF ACQUISITION BASED ON THE PREMISE THAT THE IMPUGNED PROPERTY WAS ACQUIRED BY HER FATHER PRIOR TO 1.4.1981 AND, THEREFORE, SHE WAS ENTITLED FOR INDEXATION FRO M 1.4.1981 WHILE COMPUTING THE COST OF ACQUISITION AND, ACCORDINGLY, COMPUTED THE CAPIT AL GAIN. THE AO DID NOT ACCEPT THE CONTENTION OF ASSESSEE. LD CIT(A) HAS ALSO CONFIRM ED THE ORDER OF AO AND CONSIDERED THE INDEXATION W.E.F. 1.7.1995 AND NOT FROM 1.4.198 1. HENCE, ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING, LD A.R. SUBMITTED THAT T HE ISSUE IS COVERED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MANJULA J SHAH, 249 CTR (BOM)270, WHEREIN, IT HAS BEEN HELD THAT WHILE COMP UTING THE CAPITAL GAINS ARISING ON TRANSFER OF A CAPITAL ASSET ACQUIRED BY THE ASSESSE E, INTER ALIA, UNDER A GIFT, THE INDEXED COST OF ACQUISITION HAS TO BE COMPUTED WITH REFEREN CE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET AND NOT THE YEAR IN WHIC H THE ASSESSEE BECAME THE OWNER OF THE ASSET. 5. IN THE CASE BEFORE US, THERE IS NO DISPUTE TO TH E FACT THAT ASSESSEE HAS INHERITED THE PROPERTY ON THE DEATH OF HER FATHER AND HER FAT HER HAD ACQUIRED THE PROPERTY PRIOR TO 1.4.1981. WE HOLD THAT THE INDEXATION IS LINKED FO R THE PERIOD OF HOLDING OF THE ASSET AND SINCE THE CASE OF THE ASSESSEE IS COVERED UNDER SECTION 49(1)(III) OF THE ACT, THE PERIOD OF HOLDING OF THE ASSET HAS TO BE DETERMINED BY INCLUDING THE PERIOD FOR WHICH ASSET WAS HELD BY THE PREVIOUS OWNER I.E. FATHER OF THE ASSESSEE AND, THEREFORE, THE YEAR IN WHICH THE SAID ASSET WAS HELD BY THE PREVIO US OWNER WOULD BE THE FIRST YEAR FOR WHICH SAID ASSET WAS HELD BY THE ASSESSEE. THEREFO RE, RESPECTFULLY FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF MANJULA J SHAH (SUPRA), WE HOLD THAT THE CAPITAL GAIN IS TO BE COMPUTED BY CON SIDERING THE COST OF INDEXATION FROM ITA NO.7212/MUM/2011 ASSESSMENT YEAR: 2007-08 3 1.4.1981 AND NOT FROM THE DATE ASSESSEE ACQUIRED TH E ASSET ON THE DEATH OF HER FATHER I.E. W.E.F. 1.7.1995. HENCE, GROUNDS OF APPEAL TAK EN BY ASSESSEE ARE ALLOWED. 6. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOW ED. PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER, 2012 SD/- (RAJENDRA) ACCOUNTANT MEMBER SD/- (B.R. MITTAL) JUDICIAL MEMBER MUMBAI, DATED 10 TH OCTOBER, 2012 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),28, MUMBAI 4. COMMISSIONER OF INCOME TAX, 26 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH B MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI