ITO, Jaipur V. SMT. HANSA CHOUDHARY, Jaipur

ITA 810/JPR/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99589 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 29-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Cost of acquisition
• Section: 143(3); 234B; 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA- @ ITA NO. 810/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2007-08 INCOME TAX OFFICER, WARD 6(3), JAIPUR. CUKE VS. HANSA CHOUDHARY, THROUGH LEGAL HEIR SH. SAJJAN SINGH CHOUDHARY, 42, SANGRAM COLONY, C-SCHEME, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AGLPC 7555 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT IZR;K{KSI.K @ C.O. NO. 59/JP/2013 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 810/JP/2013) FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2007-08 LATE SMT. HANSA CHOUDHARY, THROUGH LEGAL HEIR SH. SAJJAN SINGH CHOUDHARY, 42, SANGRAM COLONY, C-SCHEME, JAIPUR. CUKE VS. INCOME TAX OFFICER, WARD 6(3), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA- @ PAN/GIR NO.: AGLPC 7555 R IZR;K{KSID @ OBJECTOR IZR;FKHZ @ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI KAILASH MANGAL (JCIT) FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI ANIL GOYAL (CA) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 03/12/2015 MN?KKS'K .KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 14/12/2015 ITA 810/JP/2013 & CO 59/JP/2013_ ITO VS. HANSA CHOUDHARY 2 VKNS'K@ ORDER PER: T.R. MEENA, A.M.: THE APPEAL BY REVENUE AND CROSS OBJECTION BY ASSESS EE ARISE FROM THE ORDER DATED 26/08/2013 OF LD. CIT (A)-II, JAIPUR . RESPECTIVE GROUNDS OF APPEAL AS WELL AS C.O. ARE AS UNDER:- GROUNDS IN REVENUE APPEAL. (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) HAS ERRED IN DIRECTING THE A.O. TO ALLOW THE BENEFIT OF INDEXATION FROM 01/4/1981, PARTICULARLY WHEN THE EXPLANATION (III) T O SECTION 48 OF THE IT ACT, 1961 CLEARLY SPECIFIES TH AT INDEXED COST OF ACQUISITION MEANS AN AMOUNT WHICH BEARS TO THE COST OF ACQUISITION THE SAME PROPORTIO N AS COST INFLATION INDEX FOR THE YEAR IN WHICH THE ASSET IS TRANSFERRED BEARS TO THE COST INFLATION INDEX FOR T HE FIRST YEAR IN WHICH THE ASSET WAS HELD BY THE ASSESSE E OR FOR THE YEAR BEGINNING ON THE 1 ST DAY OF APRIL, 1981, WHICHEVER IS LATER. GROUNDS IN CROSS OBJECTION 1. THE LD A.O. HAS ERRED IN NOT PASSING SPEAKING O RDER WHILE DISPOSING OBJECTIONS OF THE ASSESSEE AGAINST REOPENING OF THE ASSESSMENT. THEREFORE, THE REOPENING WAS BAD IN LAW. THE LD CIT(A) HAS ERRED IN HOLDING THAT THE REOPENING WAS AS PER LAW. 2. THE LD CIT(A) HAS ERRED IN ARBITRARILY DISMISSIN G GROUND NO. 5 AGAINST WRONGLY CHARGING OF INTEREST OF RS. 3,71,429/- UNDER SECTION 234B OF THE INCOME TAX ACT. 2. THE C.O. OF THE ASSESSEE IS NOT PRESSED BY THE LD AR AT THE TIME OF HEARING, THEREFORE, WE DISMISS THE C.O. OF THE ASSE SSEE AS NOT PRESSED. ITA 810/JP/2013 & CO 59/JP/2013_ ITO VS. HANSA CHOUDHARY 3 3. THE ASSESSEE HAD SHOWN LONG TERM CAPITAL GAIN AND INTEREST INCOME. SHE FILED RETURN OF INCOME FOR A.Y. 2007-08 ON 19/07/2007 DECLARING TOTAL INCOME OF RS. 1,23,21,530/-. THE OR IGINAL ASSESSMENT IN THIS CASE WAS COMPLETED BY THE ACIT, CIRCLE-6, JAIPUR ON THE RETURNED INCOME OF RS. 1,23,21,530/- U/S 143(3) OF THE INCOM E TAX ACT, 1961 (IN SHORT THE ACT) ON 15/7/2009. SUBSEQUENTLY IT CAME T O NOTICE OF THE ASSESSING OFFICER THAT WHILE WORKING OUT LONG TERM LO NG TERM CAPITAL GAIN BY THE ASSESSEE, INDEXED COST OF ACQUISITION WAS CLA IMED BY TAKING COST INFLATION INDEX FOR F.Y. 1981-82 WHEREAS THE ASSESS EE BECAME THE OWNER OF THE LAND SOLD BY HER IN F.Y. 1993-94 ONLY. AS PE R EXPLANATION (III) TO SECTION 48 OF THE ACT, INDEXED COST OF ACQUISITION MEANS AN AMOUNT WHICH BEARS TO THE COST OF ACQUISITION, THE SAME PROPORTI ON AS COST INFLATION INDEX FOR THE YEAR IN WHICH THE ASSESSEE IS TRANSFER RED BEARS TO THE COST INFLATION INDEX FOR THE FIRST YEAR IN WHICH THE ASS ET WAS HELD BY THE ASSESSEE OR FOR THE YEAR BEGINNING ON THE FIRST DAY OF APRIL, 1981 WHICHEVER IS LATER. IN THIS CASE, THE LAND SOLD BY T HE ASSESSEE WAS INHERITED ON DEATH OF HER FATHER IN MARCH, 1994 AND THUS, SHE BECAME THE OWNER OF THE LAND IN F.Y. 1993-94. THEREFORE, INDEXE D COST OF ACQUISITION WAS REQUIRED TO BE WORKED OUT BY TAKING COST INFLATIO N INDEX FOR F.Y. 1993-94 INSTEAD OF F.Y. 1981-82 AS TAKEN BY THE ASS ESSEE FOR CALCULATION ITA 810/JP/2013 & CO 59/JP/2013_ ITO VS. HANSA CHOUDHARY 4 OF LONG TERM CAPITAL GAIN AND AS ALLOWED BY THE A.O. WHILE COMPLETING THE ORIGINAL ASSESSMENT. AS THE INCOME CHARGEABLE TO TA X WAS UNDER ASSESSED DUE TO INCORRECT COMPUTATION OF LONG TERM CAPITAL G AIN, THEREFORE, CASE WAS REOPENED U/S 147 OF THE ACT AND NOTICE U/S 148 O F THE ACT WAS ISSUED. THE CASE WAS SCRUTINIZED U/S 143(3) OF THE AC T BY THE ASSESSING OFFICER AND DISPOSED OF THE OBJECTION MADE BY THE A SSESSEE VIDE LETTER DATED 24/1/2013 BY THE ASSESSING OFFICER. THE LD AR DURING THE COURSE OF ASSESSMENT PROCEEDINGS SUBMITTED THAT THERE ARE NU MBER OF CASES, WHICH SUPPORTS THE ASSESSEES CASE THAT IN CASE OF I MMOVABLE PROPERTY INHERITED THEN THE COST OF INDEXATION IS TO BE ALLO WED FROM 01/4/1981 FOR WHICH HE RELIED UPON THE FOLLOWING DECISIONS BEFORE T HE ASSESSING OFFICER. (1) DCIT VS MANJULA J SHAH ITAT MUMBAI B-1 BENCH (200 9) 126 TTJ (MUM) (SPECIAL BENCH) 145. (2) M.SIVA PARVATHI & ORS VS. ITO ITAT VISAKHAPATNAM (2010 129 TTJ (VISAKH) 463. (3) ITO VS MAHENDRA KUMAR AGARWAL ITAT JAIPUR 42 TAX WO RLD 61 ITAT JAIPUR. (4) ARUN SHUNGLOO VS. CIT (2012) 249 CTR (DELHI) 294. AFTER CONSIDERING THE ASSESSEES REPLY, THE LD ASSE SSING OFFICER HELD THAT THE ASSESSEE CAN ONLY GET INDEXATION FROM F.Y. 1993 -94 NOT FOR 01/4/1981. ACCORDINGLY, HE CALCULATED LONG TERM CAP ITAL GAIN AT RS. 1,45,81,384/- IN PLACE OF RS. 1,16,97,615/-. ITA 810/JP/2013 & CO 59/JP/2013_ ITO VS. HANSA CHOUDHARY 5 4. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD ALL OWED THE APPEAL BY OBSERVING AS UNDER:- I HAVE CONSIDERED THE FACTS OF THE CASE; ASSESSMEN T ORDER AND APPELLANTS WRITTEN SUBMISSION. ASSESSING OFFICER AL LOWED INDEXATION BENEFIT FROM FINANCIAL YEAR 93-94 IN WHIC H APPELLANT TOOK POSSESSION OF THE PROPERTY UNDER WILL. APPELLAN T SUBMITTED THAT THE POSSESSION OF THE PROPERTY WILL RELATE TO T HE POSSESSION HELD BY THE PREVIOUS OWNER AS HELD BY SEVERAL JUDICI AL DECISIONS. I HAVE GONE THROUGH THESE DECISIONS. IN THE CASE OF M ANJULA J SHAH, ITAT SPECIAL BENCH, MUMBAI HELD THAT THE INDEX ATION BENEFIT IS TO BE ALLOWED FROM THE PERIOD THE PROPERT Y IN POSSESSION OF THE PREVIOUS OWNER IN CASE OF TRANSFER BY WILL. THIS DECISION IS ALSO AFFIRMED BY HONBLE BOMBAY HIGH CO URT. CONSIDERING THESE DECISIONS, IT IS CLEAR THAT APPEL LANT IS ELIGIBLE FOR TAKING INDEXATION BENEFIT FROM 01/4/1981. RESPECTFU LLY FOLLOWING THE DECISIONS, ASSESSING OFFICER IS DIRECTED TO ALL OW INDEXATION BENEFIT TO THE APPELLANT WITH EFFECT FROM 01/4/1981. THIS GROUND IS ACCORDINGLY ALLOWED. 5. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND AR GUED THAT ORDER OF THE ASSESSING OFFICER MAY PLEASE BE CONFIRMED. ITA 810/JP/2013 & CO 59/JP/2013_ ITO VS. HANSA CHOUDHARY 6 6. AT THE OUTSET, THE LD AR OF THE ASSESSEE REITERA TED THE ARGUMENTS MADE BEFORE THE LD CIT(A) AS WELL AS ASSESSING OFFICE R AND ARGUED THAT AS PER SECTION 49, THE COST WITH REFERENCE TO BY SUC CESSION, INHERITANCE OR DEVOLUTION, THE COST OF ACQUISITION OF THE ASSETS S HALL BE DEEMED TO BE THE COST FOR WHICH THE PREVIOUS OWNER OF THE PROPERTY AC QUIRED IT, AS INCREASED BY THE COST OF ANY IMPROVEMENT OF THE ASS ETS INCURRED OR BORNE BY THE PREVIOUS OWNER OR THE ASSESSEE AS THE CASE MA Y BE. THEREFORE, THE COST IN THE HANDS OF ASSESSEES FATHER IS TO BE TAKEN. FOR INDEXATION PURPOSE, THE LD AR HAD DRAWN OUR ATTENTION ON VARIOU S DECISIONS OF THE VARIOUS HON'BLE HIGH COURTS WHEREIN THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. THE RATIO LAID BY THE VARIOU S COURTS IS AS UNDER:- (1) CIT VS. MANJULA J SHAH (2013) 355 ITR 474 (BOMB AY). (2) ARUN SHUNGLOO TRUST VS. CIT. (3) CIT VS MS JANHAVI S DESAI (2012) 252 CTR (BOM) 518. (4) CIT VS RAMAN KUMAR SURI (2012) 255 CTR 257 (BOM BAY). (5) CIT VS SMT. MINA DEOGUN (2015) 375 ITR 586 (CAL. ) (6) CIT VS. RAJESH VITTHALBHAI PATEL (2013) 37 TAXMA NN.COM 439 (GUJ). THE LD AR PRAYED TO UPHOLD THE ORDER OF THE LD CIT(A) . 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS SE TTLED LAW THAT IN CASE OF ANY INHERITANCE FOR ANY ASSETS, THE COST OF ACQUISI TION IS TO BE TAKEN ON ITA 810/JP/2013 & CO 59/JP/2013_ ITO VS. HANSA CHOUDHARY 7 THE BASIS OF PREVIOUS OWNER AND ALSO INDEXATION IF ACQUIRED BEFORE 01/4/1981 BY THE PREVIOUS OWNER THEN INDEXATION IS T O BE ALLOWED FROM 01/4/1981 ITSELF IN THE HANDS OF SELLER OF THE PROP ERTY I.E. THE ASSESSEE. THE CASE LAWS RELIED BY THE ASSESSEE ARE SQUARELY APP LICABLE. THEREFORE, WE UPHOLD THE ORDER OF THE LD CIT(A). 8. IN THE RESULT, REVENUES APPEAL IS DISMISSED AND C.O. OF THE ASSESSEE IS ALSO DISMISSED AS NOT PRESSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/12/2015. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 14 TH DECEMBER, 2015 * RANJAN VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO, WARD 6(3), JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- SMT. HANSA CHOUDHARY, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 810/JP/2013 & CO 59/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR