The ITO, Ward-2,, GANDHIDHAM v. Soni Girdharlal Mohanlal (HUF),, Anjar

ITA 1189/RJT/2010 | 2007-2008
Pronouncement Date: 21-11-2011 | Result: Dismissed

Appeal Details

RSA Number 118924914 RSA 2010
Assessee PAN AAHFS2760G
Bench Rajkot
Appeal Number ITA 1189/RJT/2010
Duration Of Justice 1 year(s) 1 month(s) 24 day(s)
Appellant The ITO, Ward-2,, GANDHIDHAM
Respondent Soni Girdharlal Mohanlal (HUF),, Anjar
Appeal Type Income Tax Appeal
Pronouncement Date 21-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 21-11-2011
Date Of Final Hearing 30-09-2011
Next Hearing Date 30-09-2011
Assessment Year 2007-2008
Appeal Filed On 27-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT BEFORE SHRI D.K. TYAGI (JM) AND SHRI A.L. GEHLOT (A M) I.T.A. NO.1189/RJT/2010 (ASSESSMENT YEAR 2007-08) ITO WD.2 VS SONI GIRDHARLAL MOHANLAL (HUF) GANDHIDHAM LR SHRI MANISH GIRDHARILAL SHASHTRI ROAD ANJAR-KUTCH PAN : AAHFS2760G (APPELLANT) (RESPONDENT) DATE OF HEARING : 30-09-2011 DATE OF PRONOUNCEMENT : 21-11-2011 APPELLANT BY : SHRI MK SINGH RESPONDENT BY: SHRI DM RINDANI O R D E R PER BENCH THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-II RAJKOT DATED 30-06-2010 PERTAINING TO ASSESSMENT YE AR 2007-08. THE FOLLOWING EFFECTIVE GROUNDS ARE RAISED IN THE APPEAL: A) THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ENTIRE ADDITION OF RS.2 92 522/- MADE ON ACCOUNT OF SHORT TERM CAPITAL GAIN. B) THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE ENTIRE ADDITION OF RS.5 29 0-58/- MADE ON ACCOUNT O F LONG- TERM CAPITAL GAIN. 2. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE YEAR OF ACCOUNTING THE ASSESSEE RECEIVED GIFT FROM HIS FATHER IN THE FORM OF GOLD AND SILVER. IT WAS EXPLAINED THAT THE ASSESSEES FATHER WAS PARTNER IN ERSTWHILE FIRM M/S MOHANLAL ITA NO.1189/RJT/2010 2 SHAMJI & CO AND HAD RECEIVED HIS SHARE IN THE CLOSI NG STOCK OF THAT FIRM WEIGHING 1682.983 GMS OF GOLD. BESIDES THAT HIS FATHER ALSO HAD OWNED HIMSELF GOLD AND SILVER. THE ASSESSEE ALSO EXPLAINED THAT OUT OF TH E ABOVE ASSESSEES FATHER GIFTED GOLD AND SILVER TO HIS SONS HUF AND WITH TH AT THEY HAVE STARTED THEIR BUSINESS AS GOLD-SMITH. EVENTUALLY THE GOLD AND S ILVER RECEIVED FROM THE FATHER WERE CONVERTED INTO STOCK AND THE RESPECTIVE SHARES OF THE SONS WERE DETERMINED AS FOLLOWS: SHRI NATWARLAL SHRI GIRDHARLAL GOLD 611 GMS 2293.983 GMS SILVER 29000 GMS 5494.000 GMS THE ASSESSING OFFICER WAS OF THE VIEW THAT THIS IS TRANSFER WITHIN THE MEANING OF SECTION 2(47)(IV) OF THE ACT. THEREFORE THE ASSES SEE IS LIABLE TO CAPITAL GAIN TAX ON THE GOLD AND SILVER RECEIVED FROM HIS FATHER AND ON THE CONVERSION OF GOLD AND SILVER INTO STOCK IN TRADE. THE ASSESSING OFFICER WAS ALSO OF THE VIEW THAT THE ASSESSEE WAS NOT ELIGIBLE FOR COST INDEXATION AS PR OVIDED IN SECTION 48 OF THE ACT. ACCORDINGLY THE ASSESSING OFFICER CALCULATED THE LO NG TERM CAPITAL GAIN AND SHORT TERM CAPITAL GAIN AS UNDER: LONG TERM CAPITAL GAIN: PARTICULARS WEIGHT (GMS) VALUE IN STOCK (RS.) COST TO FATHER (RS.) LONG TERM CAPITAL GAIN (RS.) GOLD 965 752700 278692 474008 SILVER 5494 76916 21866 55050 TOTAL 529058 ITA NO.1189/RJT/2010 3 SHORT TERM CAPITAL GAIN: PARTICULARS WEIGHT (GMS) VALUE IN STOCK (RS.) COST TO FATHER (RS.) LONG TERM CAPITAL GAIN (RS.) GOLD 1328.983 1036607 744084 292522 TOTAL 292522 3. ON APPEAL THE CIT(A) DELETED THE SAID ADDITION ON THE GROUND THAT THE ASSESSEE HAD RECEIVED GOLD AND SILVER ORNAMENTS AS GIFT FROM HIS FATHER AND THE SAME IS SQUARELY COVERED BY SECTION 47(III) OF THE ACT AND THE SAME SHOULD NOT BE CONSIDERED AS TRANSFER OF CAPITAL ASSETS FOR THE PU RPOSE OF SECTION OF SECTION 45 OF THE ACT. 4. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES RECORD PERUSED. WE FIND THAT THE CIT(A) HAS CONSIDERED SECTION 47(I II) OF THE ACT WHICH EXCLUDES ANY TRANSFER OF A CAPITAL ASSET UNDER A GIFT OR WIL L OR AN IRREVOCABLE TRUST FROM THE AMBIT OF PROVISIONS OF SECTION 45 OF THE ACT. IN T HE CASE ON HAND THERE IS NO DISPUTE ON THE FACT THAT THE GOLD AND SILVER CONVER TED INTO STOCK IN TRADE WAS RECEIVED FROM THE FATHER AS GIFT. THE CIT(A) DELET ED THE ADDITIONS BY FOLLOWING THE JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF CIT (ADDL) VS AVTAR MOHAN SINGH (MRS) (1982) 136 ITR 645 (DEL). IN THE CIRCUMSTANC ES WE DO NOT SEE ANY MERIT IN THE APPEAL FILED BY THE REVENUE. THE CIT(A) HAS RI GHTLY DELETED THE IMPUGNED ADDITIONS. WE UPHOLD THE ORDER OF CIT(A). ITA NO.1189/RJT/2010 4 5. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. SD/- SD/- (D.K. TYAGI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT DT : OCTOBER 2011 PK/- ORDER PRONOUNCED ON 21-11-2011 SD/- SD/- JM JM COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-II RAJKOT 4. THE CIT-I RAJKOT 5. THE DR I.T.A.T. RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT RAJKOT