MELISSA ANN MASCARENHAS, MUMBAI V. ITO 4(1),

ITA 7259/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1773 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 19-05-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 24-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Gift; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F,MUMBAI BEFORE SHRI R.V. EASWAR (VICE-PRESIDENT) & SHRI A.L. GEHLOT (ACCOUNTANT MEMBER) I.T.A. NO.7259/MUM/2008 (A.Y. 2006-07) MS.MELISSA ANN MASCARENHAS, C/O. JANAK APARTMENTS, AZAD LANE, ANDHERI(W), MUMBAI-400 058. VS. INCOME-TAX OFFICER-4(1), SCINDIA HOUSE, BALLARD ESTATE, MUMBAI-400 039. APPELLANT RESPONDENT APPELLANT BY SHRI MAYUR KISNADWALA. DEPARTMEMT BY SHRI VI RENDRA OJHA. O R D E R PER A.L. GEHLOT, AM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)XXXIII, MUMBAI, RELATING TO ASSTT. YEAR 2006-07. THE GROUND RAISED IN THE APPEAL IS IN RESPECT OF CALCULATION OF CAPITAL GAINS. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS NRI STAYING IN AUSTRALIA. THE ASSESSEE ALONG WITH HER SISTER MS. BONITA ALICE PRIOR SOLD AN INHERITED FLAT ADMEASURING 810 SQ.FT. CARPET AREA BEARING NO.A-27, 2 ND FLOOR, A-BUILDING, PEACE HEAVEN, ST. ANDREWS ROAD, BANDRA (W), MUMBAI-50, TO SHRI MANJIT PAUL CHAUDHARY & MS. PATRICIA CHAUDHARY. THE SAID BUILDI NG WAS CONSTRUCTED IN 1968. THE OWNER OF THE SAID FLAT WAS MRS. ALICE BRAGANZA, MOTHER OF THE ASSESSEE. MRS. BRAGANZA EXPIRED ON 25-12-2004 AND THE FLAT WAS DEV OLVED UPON THE ASSESSEE AND HER SISTER. THE ASSESSEE CALCULATED CAPITAL GAI NS CONSIDERING THE INDEXATION BENEFIT FROM 1-4-1981. THE AO WAS OF THE VIEW THAT THE ASSESSEE AND HER SISTER HAD NO RIGHT ON THE FLAT TILL THE SAID DEMISE OF TH EIR MOTHER. ONLY AFTER HER DEATH ON 25-12-2004, THE ASSESSEE GOT RIGHT TO DISPOSE OF THAT FLAT. THE AO ACCORDINGLY ITA 7259/M/098 MS.MELISSA ANN MASCARENHAS 2 RE-CALCULATED THE CAPITAL GAINS BY GIVING INDEXATIO N BENEFIT ACCORDINGLY. THE ORDER OF THE AO HAS BEEN CONFIRMED BY THE CIT(A). 3. AT THE OUTSET, THE LD. REPRESENTATIVE OF THE ASS ESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE ORDER OF THE SPL. BENCH OF ITAT, MUMBAI, IN THE CASE OF DCIT VS. MANJULA J. SHAH REPORTED IN (2010) 35 SOT 105 (MUM.) (SB), WHEREIN THE ITAT, SPL. BENCH, HAS HELD AS UNDER : 17. FOR THE REASONS GIVEN ABOVE, WE ARE OF THE VIE W THAT FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAIN ARISING FROM THE TRANSFER OF A CAPITAL ASSET WHICH HAD BECOME PROPER TY OF THE ASSESSEE UNDER GIFT, THE FIRST YEAR IN WHICH THE CA PITAL ASSET WAS HELD BY THE ASSESSEE HAS TO BE DETERMINED TO WORK OUT TH E INDEXED COST OF ACQUISITION AS ENVISAGED IN EXPLANATION (III) TO SECTION 48 AFTER TAKING INTO ACCOUNT THE PERIOD FOR WHICH THE SAID C APITAL ASSET WAS HELD BY THE PREVIOUS OWNER. IN THAT VIEW OF THE MAT TER, WE HOLD THAT THE INDEXED COST OF ACQUISITION OF SUCH CAPITAL ASS ET HAS TO BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH THE PR EVIOUS OWNER FIRST HELD THE ASSET. ACCORDINGLY, WE ANSWER THE QU ESTION REFERRED TO US IN FAVOUR OF THE ASSESSEE AND UPHOLD THE IMPUGNE D ORDER OF THE LEARNED CIT(A) ON THIS ISSUE. THE LD. A.R. FURTHER SUBMITTED THAT THOUGH THE DECI SION OF ITAT, SPL. BENCH, IS IN RESPECT OF GIFT, ACCORDING TO SECTION 49 READ WITH EXPLANATION 1(B) TO SEC.2(42A) , THE INHERITED PROPERTY IS ALSO COVERED SAME LIKE AS A GIFT. 4. AFTER HEARING THE LD. D.R., WE FIND THAT ON IDEN TICAL SET OF FACTS THE ISSUE HAS BEEN DECIDED BY THE ITAT, SPL. BENCH, THAT IN S UCH CASES THE INDEXATION BENEFIT BE ALLOWED FROM THE DATE OF ACQUISITION OF PREVIOUS OWNER. WE RESPECTFULLY FOLLOW THE ORDER OF THE SPL. BENCH, AND IN THE LIGH T OF THAT, THE CLAIM OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ITA 7259/M/098 MS.MELISSA ANN MASCARENHAS 3 ORDER PRONOUNCED ON THE 28 TH DAY OF MAY, 2010. SD/- SD/- (R.V. EASWAR) (A.L. GEHLOT) SR. VICE-PRESIDENT ACCOUNTANT MEMBER MUMBAI: 28TH MAY, 2010. NG: COPY TO : 1. ASSESSEE. 2.DEPARTMENT. 3 CIT(A)-XXXIII,MUMBAI. 4 DIT(INTL. TAXN.),MUMBAI. 5.DR,F BENCH,MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST. REGISTRAR, ITAT, MUMBAI. ITA 7259/M/098 MS.MELISSA ANN MASCARENHAS 4 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 19-5-2010 SR.PS/ 2 DRAFT PLACED BEFORE AUTHOR 20-5-2010 SR.PS/ 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER