ASST CIT 18(3), MUMBAI vs. SHALINI RAMESH KHIANI, MUMBAI

Smt. Shalini Ramesh ACIT -18 (3) Room No. 609, 6th Floor, Khiani, बिधम/ 1st floor, Shirin Mansion, Earnest House, Nariman Vs. 74, Trinity Street, Dhobi Point, Mumbai-400021 Talao, Mumbai-400002. स्थायीलेखासं./जीआइआरसं./ PAN No. AAFPK7886B (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant by : Ms. Aarju Garodia, DR प्रत्यथीकीओरसे/Respondentby : Shri Deepak Tralshawala, AR सुनवाईकीतारीख/ : 05.06.18 Date of Hearing घोषणाकीतारीख / : 06.06.16 Date of Pronouncement आदेश / O R D E R

Per Sandeep Gosain, Judicial Member:

Smt. Shalini Ramesh Khiani, 1. Whether on the facts and in the circumstances of the case and in law, the CIT(A) has erred in allowing the appeal of the assessee against the re-computation of LTCG by the AO at Rs. 1,03,88,560/- vis-a-vis Rs.44,80,3491- computed by the assessee in respect of the property acquired by the assessee by way of inheritance.

2. Whether on the facts and in the circumstances of the case and in law, the CIT(A) has erred in rejecting the AO's calculation of the LTCG in allowing the indexation cost u/s. 49 with effect from the date of inheritance, i.e. 03.01 .2010.

4. The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary."

Smt. Shalini Ramesh Khiani, The assessee has sold her 50% share in the property at flat No.112, Vallabh Apartment, V.K. Natha CGS, Bhulabhai Desai Rd, Mumbai for a consideration of Rs.3,15,00,000/- to her sister, Smt. Anita Boadita. The market value of the transaction was Rs 3,00,06,400/-. The assessee purchased another property at Flat No. 55, Dharam Jyoti, jointly with her son in law, Shri. Manish Ballani for a consideration of Rs.3,20,00,000/-. Out of the total cost, the assessee paid an amount of Rs 2,00,00,875/- and the balance has been paid by Shri Manish Ballani. She has claimed exemption u/s 54F for the investment made by her which has been allowed by the AO. The only issue in question is computation of capital gain for the property sold by her to her sister. This original property was acquired by assessee's parents, Mr. Mohan G. Mukhey and Mrs. Neena Mohan Mukhey in the year 1974. Pursuant to the death of Shri. Mohan Mukhey on 5.3.1986, 50% of the share belonging to him was inherited by his wife, Smt. Neena Mukhey. After the demise of Smt. Neena Mukhey on 27.2.2009, the said flat was inherited by their two daughters, Mrs: Anita Boadita and Mrs. Shalini Khiani, the assessee, on 3.1.2010. Subsequently on 18.12.2012, the assessee Smt. Shalini Ramesh Khiani, sold her 50% share to her sister, Anita Boadita for a consideration of Rs.3,15,00,000/-. While calculating the LTCG, the assessee has considered the cost of acquisition as the cost on 1.4.1981 which was Rs.16,47,600/-. The assessee has adopted the cost of Rs.8,23,800/- being 50% of the total cost. While calculating the indexed cost of acquisition, the assessee has adopted cost inflation index of 1981 and has arrived at a taxable capital gain of Rs.44,80,349/-. During the course of assessment proceedings, the AO relied on the definition of indexed cost of acquisition given at Explanation (iii) to section 48 of the I.T. Act and has adopted the cost inflation index of F.Y.2009-10 instead of 1981. While calculating the indexed cost of acquisition and made an addition of Rs.59,08,200/- to the LICG.

Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties, allowed the appeal of the assessee and deleted the additions. Now before us, the revenue has preferred the present appeal by raising the above grounds.

Smt. Shalini Ramesh Khiani, Ground No. 1 & 2. 3. These ground raised by the revenue are inter-related and inter-connected and relates to challenging the order of Ld. CIT(A) in allowing the appeal of the assessee against the re- computation of LTCG by the AO at Rs. 1,03,88,560/- vis-a-vis Rs.44,80,3491- computed by the assessee in respect of the property acquired by the assessee by way of inheritance, therefore we thought it fit to dispose of the same by this common order.

by the revenue in para no. 3(3.1 to 3.3.3) of its order. After having gone through the orders passed by Ld. CIT(A) as well as facts of the present case, we find that Ld. CIT(A) has rightly appreciated the facts of the present case by Smt. Shalini Ramesh Khiani, relying upon the judgment of Jurisdictional High Court in the case of Manjula J. Shah (2011) 16 taxamin.com 42 and rightly come to the conclusion that in case of assets covered u/s 49(1) of I.T. Act, the period of holding the asset has to be determined by including the period for which the said asset was held by the previous owner and in arriving at indexation, the first year in which the said asset was held by the previous owner would be the first year for which the asset was held by the assessee. We also find that Ld. CIT(A) had correctly relied upon the decision of the jurisdictional High Court in the case of Manjula J. Shah (2011) 16 taxamin.com 42, which was decided on similar issue in favour of assessee, therefore Ld. CIT(A) has rightly allowed the appeal of the assessee by taking into account that the correct cost inflation index would be the index for the year 1981 as property in question was owned by the previous owner prior to 01.04.1981. Moreover, no new facts or contrary judgments have been brought on record before us in order to controvert or rebut the findings so recorded by Ld CIT(A). Therefore, there are no reasons for us to interfere into or deviate from the findings Smt. Shalini Ramesh Khiani, recorded by the Ld.CIT(A). Hence, we are of the considered view that the findings so recorded by the Ld. CIT (A) are judicious and are well reasoned. Resultantly, these ground raised by the revenue stands dismissed. Ground No. 3 & 4

5. These ground are general in nature, thus requires no specific adjudication.