ITO 20(2)(2), MUMBAI vs. NARENDRA R. KENIA (HUF), MUMBAI

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ITA 556/MUM/2016Status: DisposedITAT Mumbai22 November 2017AY 2011-123 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 affirmed the CIT(A)'s decision, relying on the Bombay High Court judgment in Manjula Shah. The assessee's adoption of the 1980-81 indexation factor for computing indexed cost of acquisition was upheld.

What were the facts?

The assessee declared Long Term Capital Gain on sale of a property acquired by inheritance in 1996-97. The previous owner had acquired the property prior to 1.4.1981. The assessee used the 1980-81 indexation factor, while the AO used the 1996-97 factor.

What were the issues?

The key issue was the correct financial year to be used for indexation of the cost of acquisition of a property inherited by the assessee, where the previous owner had acquired it before 1.4.1981.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI

Before: SHRI G.S. PANNU & SHRI RAVISH SOOD

For Appellant: Shri T.A. Khan
For Respondent: Shri Mehul Shah
Hearing: 22/11/2017Pronounced: 22/11/2017

The captioned appeal by the Revenue is directed against the order of CIT(A)-32, Mumbai dated 02.11.2015 pertaining to the Assessment Year 2011-12, which in turn has arisen from the order passed by the Assessing Officer, Mumbai dated 29.03.2014 u/s 143(3) of the Income Tax Act, 1961 (in short ‘the Act’).

2.

At the time of hearing, it was a common point between the parties that the judgment of the Hon'ble Bombay High Court in the case of Manjula Shah, 355 ITR 474 (Bom.), which has been relied upon by the CIT(A) for allowing the relief to the assessee, continues to hold the field and has not been altered by any higher authority and, therefore, the decision of the CIT(A) deserves to be affirmed. So however, in order to impart completeness to the order, the following discussion is relevant.

3.

The respondent-assessee is an individual who had declared Long Term Capital Gain on sale of a property bearing no. 699, Dr. Dinshaw Master Road, Parsi Colony, Dadar, Mumbai 400 014 during the year under consideration. The facts relevant for the present controversy are that the assessee had acquired the property by inheritance in the financial year 1996-97 though the previous owner had acquired the property prior to 1.4.1981. As a consequence, the assessee adopted the indexation factor of the year 1980-81 for the purpose of computing the indexed cost of acquisition whereas the Assessing Officer allowed the indexation with reference to the indexation factor for financial year 1996-97, when assessee actually inherited/acquired the property. The CIT(A) has upheld the stand of the assessee by relying on the judgment of the Hon'ble Bombay High Court in the case Manjula Shah (supra). Since the judgment of the Hon'ble Bombay High Court in the case of Manjula Shah (supra) squarely covers the controversy, we find no reason to interfere with the decision of the CIT(A), which is hereby affirmed.

4.

Resultantly, appeal of the Revenue is dismissed.

The above decision was pronounced in the open court in the presence of both the parties at the conclusion of the hearing on 22nd November, 2017.

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