ITO, Ward-4(5),, Pune v. Smt. Nawaz R. Dinsha, Pune

ITA 1289/PUN/2010 | 2004-2005
Pronouncement Date: 30-12-2011 | Result: Dismissed

Appeal Details

RSA Number 128924514 RSA 2010
Assessee PAN INSHA1967W
Bench Pune
Appeal Number ITA 1289/PUN/2010
Duration Of Justice 1 year(s) 2 month(s) 19 day(s)
Appellant ITO, Ward-4(5),, Pune
Respondent Smt. Nawaz R. Dinsha, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 30-12-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 30-12-2011
Assessment Year 2004-2005
Appeal Filed On 11-10-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER I.T.A. NO. 1289/PN/2010 : A.Y. 2004-05 I.T.O WARD 4(5) PUNE APPELLANT VS. SMT NAWAZ R DINSHA 1967 WEST STREET CAMP PUNE-1 PAN AABPI 1602 H RESPONDENT APPELLANT BY: MS. NEERA MALHOTRA RESPONDENT BY: SHRI PRAMOD SHINGTE DATE OF HEARING: 29-12-2011 DATE OF PRONOUNCEMENT : 30-10-2011 ORDER PER SHAILENDRA KUMAR YADAV JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-II PUNE DATED 20-7-2010 FOR A.Y. 20 04-05 HOLDING THAT FOR THE PURPOSE OF DETERMINING THE IND EXED COST OF ACQUISITION IN RESPECT OF AN ASSET ACQUIRED UNDER A GIFT OR WILL THE COST INFLATION INDEX HAS TO BE WO RKED OUT BY TAKING THE DATE OF ACQUISITION BY THE PREVIOUS OWNE R. 2. THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FR OM LONG TERM CAPITAL HOUSE PROPERTY AND INCOME FROM O THER SOURCES. THE RELEVANT FACTS ARE THAT THE ASSESSEE ALONG WITH HER SISTER JOINTLY HELD A FLAT IN MUMBAI WHIC H WAS RECEIVED AS GIFT FROM THEIR MOTHER ON 2-10-1989 I.E . F.Y. 1989-90. THUS THE ASSESSING OFFICER ADOPTED THE CO ST 2 ITA NO. 1289/PN/2010 NAWAZ R DINSHA A.Y. 2004-05 INFLATION INDEX OF F.Y. 1989-90 FOR WORKING OUT THE INDEX COST OF ACQUISITION FOR THE ASSESSEES SHARE TO BE DEDUCTED FROM THE NET SALE CONSIDERATION. THE ASSESSEE HAD C LAIMED THE COST INFLATION INDEX OF 100 RELEVANT TO F.Y. 19 81-82 SINCE THE HOLDING OF THE PROPERTY IN THE MOTHERS H AND WAS PRIOR TO THIS DATE. THE ASSESSING OFFICER COMPUTED THE INDEX COST OF ACQUISITION ADOPTING THE COST INFLATI ON INDEX OF THE YEAR 1989-90 INSTEAD OF THE YEAR 1981-82. T HE ASSESSING OFFICER REJECTED THE ASSESSEES CONTENTIO N AND RESTRICTED THE COMPUTATION OF INDEX COST OF ACQUISI TION FROM THE YEAR IN WHICH THE ASSET WAS TRANSFERRED WHILE COMPUTING THE LONG TERM CAPITAL GAIN. ON APPEAL TH E CIT(A) HELD THAT THE COST INFLATION INDEX AND THE INDEXED COST OF ACQUISITION HAS TO BE WORKED OUT BY TAKING THE DATE OF ACQUISITION BY THE PREVIOUS OWNER IN THE CASE OF PL OT RECEIVED BY THE ASSESSEE FROM HER MOTHER BY WAY OF GIFT. THE SAME HAS BEEN CHALLENGED BY THE REVENUE BEFORE US. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED 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 3 ITA NO. 1289/PN/2010 NAWAZ R DINSHA A.Y. 2004-05 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 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. MANJULA J. SHAH IN INCOME-TAX APPEA L NO. 3378 OF 2010 HELD THAT THE TRIBUNAL WAS JUSTIFIED I N HOLDING THAT WHILE COMPUTING THE CAPITAL GAINS ARIS ING ON TRANSFER OF A CAPITAL ASSET ACQUIRED BY THE ASSESSE E UNDER A GIFT THE INDEXED COST OF ACQUISITION HAS TO BE COM PUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OW NER FIRST HELD THE ASSET AND NOT THE YEAR IN WHICH THE ASSESS EE BECAME THE OWNER OF THE ASSET. RESPECTFULLY FOLLOWI NG THE AFORESAID JUDICIAL HIERARCHY WE HOLD THAT THE CIT( A) WAS JUSTIFIED IN HOLDING THAT FOR THE PURPOSE OF DETERM INING THE INDEXED COST OF ACQUISITION IN RESPECT OF AN ASSET ACQUIRED UNDER A GIFT OR WILL THE COST INFLATION INDEX HAS TO BE WORKED OUT BY TAKING THE DATE OF ACQUISITION BY THE PREVIOUS OWNER. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN ON 30 TH DECEMBER 2011. (D. KARUNAKARA RAO) ACCOUNTANT MEMBER SHAILENDRA KUMAR YADAV JUDICIAL MEMBER PUNE DATED THE 30 TH DECEMBER 2011. ANKAM 4 ITA NO. 1289/PN/2010 NAWAZ R DINSHA A.Y. 2004-05 COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT II PUNE 4. CIT(A)-III PUNE 5. THE D.R ITAT PUNE BENCH PUNE 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES PUNE.