ACIT, Pune V. Dr. Shailesh S.Gujar (HUF), Pune

ITA 762/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56543 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 20-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K AMBASTHA
• Keywords: Capital asset; Gift; Cost of acquisition
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER I.T.A. NO. 762/PN/2010 : A.Y. 2007-08 ASSTT. CIT CIR. 5, PUNE APPELLANT VS. DR. SHAILESH S. GUJAR (HUF) 1499 SHUKRAWAR PETH, PUNE-411 002 PAN AAQHS 9677 H RESPONDENT APPELLANT BY: SHRI S.K. AMBASTHA RESPONDENT BY: NONE DATE OF HEARING: 4-10-2011 DATE OF PRONOUNCEMENT : 21-10-2011 ORDER PER SHAILENDRA KUMAR YADAV, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-III PUNE DATED 24-2-2010 FOR A.Y. 2 007-08 ON THE POINT OF COMPUTATION OF INDEXED COST OF ACQU ISITION BY APPLYING INDEXATION FROM 1981. 2. FOR THE YEAR UNDER CONSIDERATION, THE RETURN SHO WING INCOME OF RS. 2,37,60,980/- WAS FILED ON 31-7-2007 WHICH WAS PROCESSED U/S 143(3) DETERMINING THE TOTAL INCO ME AT RS. 3,03,70,005/-. THE ASSESSEE CHALLENGED THE ACTI ON OF ASSESSING OFFICER IN COMPUTING THE LONG TERM CAPITA L GAIN AT RS. 3,53,48,605/- AND ADOPTING THE INDEX COST OF ACQUISITION OF RS. 36,51,394/-. THE ASSESSEE SOLD LAND AT 2 ITA NO. 762/PN/2010 DR. SHAIKH S GUJAR A.Y. 2007-08 LOHGAON FOR A SALE CONSIDERATION OF RS. 3,99,99,999 /-. ASSESSEE HAD SHOWN CAPITAL GAINS OF RS. 2,37,39,583 /- AFTER CLAIMING EXEMPTION U/S 54EC FOR RS. 50,00,000 /- TOWARDS PURCHASE OF REC BONDS. THE ASSESSING OFFIC ER NOTICED THAT ASSESSEE HAD TAKEN COST OF ACQUISITION OF 1981 AND INDEXATION FROM 1981 AND ARRIVED AT THE CAPITAL GAIN OF RS. 3,53,48,605/-. ON APPEAL, THE CIT(A) HAS DIREC TED THE ASSESSING OFFICER TO COMPUTE THE INDEXED COST OF ACQUISITION BY APPLYING INDEXATION FROM 1981. THE SAME HAS BEEN CHALLENGED BY THE REVENUE BEFORE US. 3. WE HAVE HEARD THE LEARNED DR. NONE FOR THE ASSE SSEE WAS PRESENT. WE THEREFORE, DECIDE THIS APPEAL AFTE R HEARING THE LEARNED DR AND PERUSING THE MATERIAL ON RECORD. 4. WE FIND THAT THE ISSUE INVOLVED IN THIS APPEAL I S SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF DCI T VS. MANJULA SHAH (318 ITR 417) WHEREIN IT HAS BEEN HELD AS UNDER: WHEN THE COST OF ACQUISITION TO THE PREVIOUS YEAR AS O THE DATE OF ACQUISITION OF THE CAPITAL ASSET BY HIM IS TO BE ADOPTED AS THE COST OF ACQUISITION TO THE ASSESS EE, EVEN FOR THE PURPOSE OF WORKING OUT THE INDEXED COS T OF ACQUISITION AS PER THE MEANING GIVEN IN EXPLANATION (III) TO SECTION 48, IT IS NOT LOGICAL TO ADOPT THE COST OF INFLATION INDEX FOR THE YEAR IN WHICH THE CAPITAL A SSET BECAME THE PROPERTY OF THE ASSESSEE AND NOT, THAT F OR THE YEAR IN WHICH THE ASSET WAS ACQUIRED BY THE PREVIOUS OWNER. FOR THE PURPOSE OF COMPUTING THE LONG TERM CAPITAL GAINS ARISING FROM THE TRANSFER O F A CAPITAL ASSET WHICH HAD BECOME PROPERTY OF THE ASSESSEE UNDER THE GIFT, THE FIRST YEAR IN WHICH TH E CAPITAL ASSET WAS HELD BY THE ASSESSEE HAS TO BE DETERMINED TO WORK OUT THE INDEXED COST OF ACQUISIT ION AS ENVISAGED IN EXPLANATION (III) TO SECTION 48 AFT ER TAKING INTO ACCOUNT THE PERIOD FOR WHICH THE SAID CAPITAL ASSET WAS HELD BY THE PREVIOUS OWNER. IN T HAT 3 ITA NO. 762/PN/2010 DR. SHAIKH S GUJAR A.Y. 2007-08 VIEW OF THE MATTER, THE INDEXED COST OF ACQUISITION OF SUCH CAPITAL ASSET HAS TO BE COMPUTED WITH REFERENC E TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET. FURTHER, HONBLE JURISDICTIONAL BOMBAY HIGH COURT I N THE CASE OF CIT VS. JANHAVI INVESTMENTS P. LTD. (2008) 1 DTR (BOM) 374 HELD THAT THE COST OF ACQUISITION WAS THE COST OF THE ASSET ON THE DATE WHEN THE ASSET WAS ACTUALLY A CQUIRED. THE BENEFIT OF INDEXATION WAS AVAILABLE TO THE ASSE SSEE FOR THE YEARS FOR WHICH THE ASSET WAS HELD BY THE PREVI OUS YEAR. RESPECTFULLY FOLLOWING THE AFORESAID JUDICIAL HIERARCHY, WE HOLD THAT THE ORDER OF THE CIT(A) DOE S NOT CALL FOR ANY INTERFERENCE AT OUR HAND. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN ON 21 ST OCTOBER 2011. SD/- SD/- (G.S. PANNU) ACCOUNTANT MEMBER SHAILENDRA KUMAR YADAV JUDICIAL MEMBER PUNE DATED THE 21 ST OCTOBER 2011. ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT III PUNE 4. CIT(A)-III PUNE 5. THE D.R, ITAT PUNE BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES, PUNE.