The DCIT, Circle-10, Ahmedabad V. Shri Manoj B. Vadodaria, Ahmedabad

ITA 953/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9032 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Gift; Cost of acquisition; Capital Gains
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 48; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 953/AHD/2013 (ASSESSMENT YEAR: 2009-10) DY. COMMISSIONER OF INCOME-TAX, CIRCLE-10, AHMEDABAD V/S SHRI MANOJJ B. VADODARIA 1 ST FLOOR, SAMBHAV HOUSE, OPP. CHIEF JUSTICE BUNGLOW, BODAKDEV, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AALPV5038N APPELLANT BY : SHRI ASHISH POPHARE, SR. D.R. RESPONDENT BY : MS. URVASHI SHODHAN, A.R. ( )/ ORDER DATE OF HEARING : 01 -03-201 7 DATE OF PRONOUNCEMENT : 03 -03-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A)- XVI, AHMEDABAD DATED 15.01.2013 PERTAINING TO A.Y. 2009-10. ITA NO 953/A HD/2013 . A.Y. 2009-10 2 2. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE LD. C IT(A) ERRED IN ALLOWING THE INDEXED COST OF ACQUISITION OF AN ASSET FROM TH E PERIOD WHEN THE ASSET WAS FIRST HELD BY THE PREVIOUS OWNER. 3. WHILE SCRUTINIZING THE RETURN OF INCOME OF THE ASSE SSEE, THE A.O. NOTICED THAT THE ASSESSEE HAS SOLD SHARES OF TRADERS PVT. L TD. WHICH WAS ORIGINALLY PURCHASED BY HIS FATHER ON 01.08.1989. THE A.O. NOT ICED THAT THE ASSESSEE HAS COMPUTED THE COST OF ACQUISITION BY TAKING THE INDEXED COST OF ACQUISITION FROM 01.08.1989. THE A.O. WAS OF THE FI RM BELIEF THAT THE ASSESSEE SHOULD HAVE TAKEN THE INDEXED COST OF ACQU ISITION FROM THE DATE OF THE SHARES HELD BY THE ASSESSEE I.E. 15.03.2009 AND SINCE THE ASSESSEE HAS SOLD THE SHARES ON 19.03.2009, THE GAIN EARNED BY T HE ASSESSEE IS SHORT TERM CAPITAL GAIN AND, THEREFORE, NO BENEFIT OF IND EXATION IS AVAILABLE TO THE ASSESSEE. THE A.O. ACCORDINGLY COMPUTED THE SHORT T ERM CAPITAL GAIN BY TAKING THE COST OF ACQUISITION AS ON 15.03.2009. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT( A) AND VEHEMENTLY CONTENDED THAT SINCE THE ASSESSEE HAS RECEIVED THE SHARES AS GIFT FROM HIS FATHER, THEREFORE, THE COST OF ACQUISITION TO HIS F ATHER SHALL BE THE COST OF ACQUISITION IN HIS HAND AND, THEREFORE, THE ASSESSE E IS ENTITLED FOR INDEXATION FROM THE DATE OF ACQUISITION OF SHARES B Y HIS FATHER. THE LD. CIT(A) WAS CONVINCED WITH THE CLAIM OF THE ASSESSEE AND FOLLOWING THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF MRS. MANJULA J. SHAH AND THE DECISION OF THE HONBLE DELHI HIGH COU RT IN THE CASE OF ARUN ITA NO 953/A HD/2013 . A.Y. 2009-10 3 SHUNGLOO TRUST 18 TAXMANN.COM 261 ALLOWED THE INDEX ATION BENEFIT TO THE ASSESSEE FROM THE DATE OF ACQUISITION OF SHARES BY HIS FATHER. 5. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. 6. THE LD. D.R. STRONGLY SUPPORTED THE FINDINGS OF THE A.O. IT IS SAY OF THE LD. D.R. THAT METHOD OF COMPUTATION OF CAPITAL GAINS IS PROVIDED IN SECTION 48 OF THE ACT AND THE A.O. HAS TAKEN THE COST OF ACQUI SITION AS PROVIDED U/S. 48 OF THE ACT. THEREFORE, THE FINDINGS OF THE A.O. SHO ULD BE UPHELD. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HA S BEEN STATED BEFORE THE LOWER AUTHORITIES. 7. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE THAT THE IMPUGNED SHARES WERE RECEIVED BY THE ASSESSEE AS GIFT FROM HIS FATHER. IT IS ALSO NOT IN DISPUTE THAT THE FATHER OF THE ASSESSEE ACQUIRED THE SHARES ON 01.08.1989. SEC TION 48 HAS TO BE READ ALONG WITH THE PROVISIONS OF SECTION 49 OF THE ACT AND A CONJOINT READING WOULD MAKE IT CLEAR THAT IN SUCH CASES, THE COST OF ACQUISITION WILL BE THE COST TO THE PREVIOUS OWNER I.E. FATHER OF THE ASSES SEE IN THE CASE IN HAND, THEREFORE, THE LD. CIT(A) HAS RIGHTLY DIRECTED THE A.O. TO COMPUTE THE COST OF ACQUISITION FROM THE DATE OF ACQUISITION OF THE SHA RES BY THE FATHER OF THE ASSESSEE. OUR VIEW IS ALSO FORTIFIED BY THE DECISIO N OF THE HONBLE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF RAJESH VITTHALBHAI PATEL IN TAX APPEAL NO. 13 OF 2013 DATED 17.04.2013 37 TAXMA NN.COM 439. WE DECLINE TO INTERFERE WITH THE FINDINGS OF THE LD. C IT(A). ITA NO 953/A HD/2013 . A.Y. 2009-10 4 8. APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 03- 03- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 03 /03/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD