Dalip Kumar Agarwal, Kolkata v. ITO, Ward - 34(3), Kolkata, Kolkata

ITA 1060/KOL/2011 | 2005-2006
Pronouncement Date: 30-12-2011 | Result: Allowed

Appeal Details

RSA Number 106023514 RSA 2011
Assessee PAN ADCPA9360Q
Bench Kolkata
Appeal Number ITA 1060/KOL/2011
Duration Of Justice 4 month(s) 27 day(s)
Appellant Dalip Kumar Agarwal, Kolkata
Respondent ITO, Ward - 34(3), Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 30-12-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 30-12-2011
Assessment Year 2005-2006
Appeal Filed On 03-08-2011
Judgment Text
' IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA ( ) . . ) [BEFORE SRI S.V. MEHROTRA A.M. & SRI MAHAVIR SING H J.M.] ! ! ! ! / I.T.A NO. 1060/KOL/2011 ASSESSMENT YEAR : 2005-2006 DALIP KUMAR AGARWAL KOLKATA -VS.- INCO ME TAX OFFICER WARD-34(3) KOLKATA (PAN : ADCPA 9360 Q) ( '# /APPELLANT ) ( $%'# / RESPONDENT ) FOR THE APPELLANT ( '# ) : SHRI S.L. KOCHAR A.R. FOR THE RESPONDENT ( $%'# ) : SHRI N. DUTTA GUPTA D.R. &' ( ) * &' ( ) * &' ( ) * &' ( ) * /DATE OF HEARING : 28.12.2011 + ) * + ) * + ) * + ) * /DATE OF PRONOUNCEMENT : 30.12.2011 - / ORDER PER SHRI S.V. MEHROTRA ACCOUNTANT MEMBER/ . . :- THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER OF LD. COMMISSIONER OF INCOME- TAX (APPEALS)-XX KOLKATA DATED 02.06.2011 FOR THE ASSESSMENT YEAR 2005-06. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2005-06 DECLARING TOTAL INCOME OF RS.8 42 870/ -. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE RECEIVED RS.20 00 000/- AS GIFT WHICH HE ADDED TO HIS CAPITAL A/C. HE FOUND THAT RS.15 00 000/- WAS CASH GIFT AND RS.5 00 000/- WAS IN THE FORM OF GIFT OF 50 000 SHARES @ RS.10/- PER SHARE OF M/S. PRIME LABELS PVT. LTD. TH ERE WAS GIFT DEED FOR THE GIFT OF 50 000 SHARES OF M/S. PRIME LABELS PVT. LTD. THE GIFT DEED WAS DATED 26.07.2004 AND WAS EXECUTED BY MR. HARISH AGARWAL BEFORE NOTARY SHRI DILIP KUMAR B ASU. THE ASSESSEE SOLD THE SHARES FOR RS.30 00 000/- DURING THE YEAR ITSELF AND CLAIMED L ONG-TERM CAPITAL GAINS OF RS.22 74 924/-. THE ASSESSING OFFICER HAD RAISED TWO OBJECTIONS IN REGARD TO THIS GIFT. FIRSTLY HE HAD QUESTIONED THE COMPUTATION OF LONG-TERM CAPITAL GAI NS BY TAKING THE DATE OF ACQUISITION OF SHARES IN 1997 IN THE HANDS OF DONOR; AND SECONDLY HE HAD DISPUTED THE GENUINENESS OF THE GIFT ALSO AND THEREFORE HAD TREATED THE ENTIRE INCOME AS INCOME FROM UNDISCLOSED SOURCES. AS FAR ITA NO. 1060/KOL./2011 2 AS THE SECOND ASPECT REGARDING GENUINENESS OF THE G IFT IS CONCERNED LD. COUNSEL FOR THE ASSESSEE FILED BEFORE US A COPY OF THE TRIBUNALS ORDER DATE D 17.09.2010 WHEREIN TRIBUNAL DISMISSED THE REVENUES APPEAL AGAINST LD. CIT(A)S ORDER WHO HA D DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. HE THEREFORE SUBMITTED THAT TH E ONLY DISPUTE IS REGARDING INDEXATION BENEFIT TO BE ALLOWED TO THE ASSESSEE. 3. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE RECORDS OF THE CASE. IT IS NOT DISPUTED THAT THE DONOR SHRI HARISH AGARWAL HAD ACQUIRED 50 000 SHARES @ RS.10/- PER SHARE IN 1997. THEREFORE IN THE HANDS OF ASSESSEE THE SALE CONSIDERATION IS TO BE CONSIDERED WITH REFERENCE TO THE DATE OF ACQUISITIO N OF SHARES BY DONOR AND NOT WITH REFERENCE TO THE DATE OF GIFT DEED DATED 26.07.2004. THIS IS SUE HAS BEEN SETTLED BY ITAT SPECIAL BENCH MUMBAI IN THE CASE OF DCIT MANJULA J. SHAH IN ITA N O. 7315/MUM/2007 DATED 16.10.2009 WHEREIN TRIBUNAL HAS INTER ALIA OBSERVED AS UNDER :- ..AS PER 2ND PROVISO TO SECTION 48 OF THE ACT THE ASSESSEE IS ENTITLED TO SUBSTITUTE INDEXED COST OF ACQUISITION IN PLACE OF ACTUAL COST OF ACQUISITION. EXPLANATION (III) TO SECTION 48 DEFINE S INDEXED COST OF ACQUISITION AS PER WHICH IF THE ASSET IS HELD FOR T HE YEAR BEGINNING ON THE 1ST DAY OF APRIL 1981 THEN THE INDEXED COS T AS ON 1ST APRIL 1981 IS TO BE ADOPTED. SECTION 49 DEALS WITH COST W ITH REFERENCE TO CERTAIN MODES OF ACQUISITION WHICH INCLUDE GIFT WI LL SUCCESSION INHERITANCE OR DEVOLUTION. UNDER SUCH CIRCUMSTANCES THE COST OF ACQUISITION OF THE ASSET IS DEEMED TO BE THE COST F OR WHICH PREVIOUS OWNER OF THE PROPERTY ACQUIRED IT. IN THE PRESENT C ASE ADMITTEDLY THE ASSESSEE HAD ACQUIRED THIS PROPERTY BY INHERITA NCE AND SINCE ORIGINAL OWNER ACQUIRED THE PROPERTY IN 1964 THERE FORE ASSESSEE WAS ENTITLED TO SUBSTITUTE INDEXED COST AS ON 01.04.198 1. WE FURTHER FIND THAT THIS ISSUE HAS ALSO BEEN CONSIDERED BY I.T.A.T . SPECIAL BENCH IN THE CASE OF MANJULA J. SHAH (SUPRA) WHEREIN AT PAR A-17 HAS OBSERVED 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 PROPERTY OF THE ASSESSEE UNDER GIFT THE FIRST YEAR IN WHICH THE CAPITAL ASSET WAS HELD BY THE ASSESSEE HAS TO BE DETERMINED TO WORK OUT THE INDEXED COST O F ACQUISITION AS ENVISAGES IN EXPLANATION (III) TO SECTION 48 AFTER TAKING INTO ACCOUNT THE PERIOD FOR WHICH THE SAID CAPITAL ASSET WAS HEL D BY THE PREVIOUS OWNER. IN THAT VIEW OF THE MATTER WE HOLD THAT THE INDEXED COST OF ACQUISITION OF SUCH CAPITAL ASSET HAS TO BE COMPUTE D WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET. ACCORDINGLY WE ANSWER THE QUESTION REFERRED TO US IN FAVOUR OF THE ASSESSEE AND UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) ON THIS ISSUE. ITA NO. 1060/KOL./2011 3 RESPECTFULLY FOLLOWING THE DECISION OF ITAT SPECIA L BENCH MUMBAI IN THE CASE OF MANJULA J. SHAH (SUPRA) WE DIRECT THE ASSESSING OFFICER TO CO MPUTE THE LONG-TERM CAPITAL GAIN BY INDEXING THE COST OF SHARES AS PER INDEXATION FOR 1 997. 4. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. . / . / . / . / ' 0. ' 0. ' 0. ' 0. 12 12 12 12 3 3 3 3 1 1 1 1 45 4545 45 ORDER PRONOUNCED IN THE OPEN COURT ON 30/ 12 /201 1. & 6 7 - 30/12/2011. SD/- SD/- [ MAHAVIR SINGH / ] [S.V. MEHROTRA/ ( . . )] JUDICIAL MEMBER/ ACCOUNTANT MEMBER/ DATED : 30/ 12/ 2011 COPY OF THE ORDER FORWARDED TO: 1. DALIP KUMAR AGARWAL .C/O. S.L. KOCHAR ADVOCATE 8 6 CANNING STREET KOLKATA-1 2 ITO WARD-34(3) KOLKATA 3. COMMISSIONER OF INCOME-TAX (APPEALS)- KOLKATA 4. CIT- KOLKATA 5. DR KOLKATA BENCHES KOLKATA (TRUE COPY) BY ORDER ASSISTANT REGISTRAR I.T.A.T. KOLKATA LAHA SR. P.S.