ITO (IT)- 2(2)(1), MUMBAI vs. VIBHA HUTCHINS, MUMBAI

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ITA 2973/MUM/2018Status: DisposedITAT Mumbai20 May 2019AY 2014-153 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order, noting that the department's Special Leave Petition against the relied-upon judgment was dismissed by the Supreme Court. Therefore, the benefit of indexation from the year the previous owner acquired the asset was confirmed.

What were the facts?

The assessee inherited an immovable property purchased by her parents before 01.04.1981 and claimed indexation benefit from FY 1981-82. The Assessing Officer denied this benefit, but the CIT(A) allowed it, relying on a Bombay High Court judgment.

What were the issues?

Whether the benefit of indexation for long-term capital gains should be calculated from the year the previous owner acquired the asset or the year the assessee became the owner, when the asset was inherited.

Which sections of the Income-tax Act were involved?

Section 48,Section 2(42A)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

Before: SHRI SAKTIJIT DEY, JM & SHRI MANOJ KUMAR AGGARWAL, AM

For Appellant: Shri Jitendra Singh – Ld. AR

Per Manoj Kumar Aggarwal (Accountant Member):- 1. Aforesaid appeal by revenue for Assessment Year [in short referred to as ‘AY’] 2014-15 contest the order of Ld. Commissioner of Income-Tax (Appeals)-56, Mumbai, [in short referred to as ‘CIT(A)’], Appeal No. CIT(A)- 56/ITO(IT)-2(2)(1)/2016-16/254-H dated 20/02/2018 on following grounds of appeal: -

1.

1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by AO by relying on the judgement of Bombay High Court in the case of Manjula Shah Vs. DCIT reported in 355 ITR 474 (Bom) (2013) when the SLP filed in the said case is pending before SC.

2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO that indexed cost of acquisition should be taken from the year in which previous owner acquired the asset i.e. 01.04.1981 and not from the year in which assessee became owner of the asset for purpose of computation of LTCG. 3. The appellant prays that the order of the Ld. CIT(A) on the above grounds be set aside and that of the assessing officer be restored

2.

As evident from grounds of appeal

, the issue before us stand in a very narrow compass. The assessee being resident individual sold certain immovable property during the impugned AY. The undisputed position is that the assessee inherited the said property from her parents and the property was purchased by the parents of the assessee before 01/04/1981. Hence, the benefit of indexation was claimed by the assessee from FY 1981-82 instead of cost inflation index of the year in which ownership was transferred in the name of the assessee. Although the assessee relied on the judgement of Hon’ble Bombay High Court rendered in Manjula Shah Vs. DCIT, however, noticing that the Special leave Petition filed by the department against the same was pending before Hon’ble Supreme Court, the benefit as claimed by the assessee was denied by Ld. AO. The Ld. first appellate authority reversed the stand of Ld. AO by observing that the said judicial pronouncement was binding. Aggrieved, the revenue is in further appeal before us.

3. It has been brought to the notice that even the department’s Special Leave Petition against the said binding judgement has been dismissed by Hon’ble Apex Court on 18/09/2018 [SLP No. 19924/2012]. Accordingly, no infirmity could be found in the impugned order.

4.

Resultantly, the appeal stands dismissed. Order pronounced in the open court on20/05/2019.

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