ITO, CHENNAI vs. MALATHI RAMJI, CHENNAI

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ITA 298/CHNY/2017Status: DisposedITAT Chennai23 November 2017AY 2013-143 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 held that the market value of the property in the hands of the previous owner (the assessee's mother) should be considered for capital gains computation, not the value on the date of inheritance. The order of the lower authority was confirmed.

What were the facts?

The Assessing Officer (AO) computed capital gains by taking the market value of a property on the date of inheritance. The assessee claimed the market value as on 01.04.1981, but the AO rejected this. The CIT(A) followed a Bombay High Court judgment.

What were the issues?

The key issue was whether to consider the market value of an inherited property on the date of inheritance or the value in the hands of the original owner for capital gains calculation.

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN

For Respondent: Ms. Maya J. Nichane, Advocate
Hearing: 20.11.2017Pronounced: 23.11.2017

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) -16, Chennai, dated 29.11.2016 and pertains to assessment year 2013-14.

2.

The only issue arises for consideration is computation of capital gain.

3.

We heard Shri AR.V. Sreenivasan, the Ld. Departmental Representative and Ms. Maya J. Nichane, the Ld.counsel for the assessee. For computing the capital gains, the Assessing Officer has taken the market value on the date on which the property was inherited by the assessee on the death of her mother Smt. Akila Vaidyanathan on 09.10.2001. The Assessing Officer rejected the claim of the assessee to take the market value as on 01.04.1981.

The question arises for consideration is when the assessee inherited the property, whether the market value has to be taken on the date of inheritance or the value of asset in the hands of the original owner, namely, the mother of the assessee. This issue was considered by the Bombay High Court in CIT v. Manjula J. Shah 355 ITR 474. The Bombay High Court found that the value of the property in the hands of the previous owner, namely, mother of the assessee has to be taken into consideration. The CIT(Appeals), in fact followed the judgment of Bombay High Court. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.

4.

In the result, the appeal filed by the Revenue is dismissed.

Order pronounced on 23rd November, 2017 at Chennai.

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