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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI GEORGE MATHAN, & SHRI A. MOHAN ALANKAMONY
आदेश / O R D E R
PER GEORGE MATHAN, JUDICIAL MEMBER:
the Order of Commissioner of Income Tax (Appeals)-16, Chennai, in dated 23.08.2016 for the AY 2012-13.
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Mrs.R.Rajeswari, JCIT, represented on behalf of the Revenue and Mr.T.Banusekhar, CA, represented on behalf of the assessee.
The appeal filed by the assessee is delayed by two days for which necessary affidavit has been filed by explaining the reasons for two days delay. As it is noticed that the delay is on account of the ill-health of the assessee’s father who was looking after the tax matters of the assessee and was also power of attorney holder of the assessee, the delay in filing of the appeal stands condoned and appeal disposed off on merits.
It was submitted by the Ld.AR that Ground Nos.1 & 2 of the assessee are general in nature. In respect of Ground Nos.3 to 5, it was a submission that the assessee’s mother had purchased a property in Kancheepuram District during the AY 2004-05. The same was received by the assessee along with her three sisters through a settlement deed dated 24.12.2007. The said property was sold by the assessee along with her sisters on 19.03.2012 and the assessee had offered capital gains in respect of her share. It was a submission that when computing the long term capital gains, the AO had adopted the cost of the immovable property as on the date of purchase by the assessee’s mother which had been received by the assessee on settlement deed but had applied the cost inflation index in respect of FY 2007-08, being the year in which the assessee had received the property through settlement deed. It was a submission that the index that was liable to be considered was of the FY
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2004-05 as the assessee’s mother had originally purchased the property during the FY 2004-05. He placed reliance upon the decision of the Hon’ble Bombay High Court in the case of Manjula J Shah reported in 355 ITR 474 (Bom) to support his contention. In respect of Ground Nos.6 & 7, it was a submission that the same related to the disallowance of the cost of the compound wall amounting to Rs.3,74,000/- and Rs.21,500/- paid to M/s.PR Foundations. It was a submission that the AO had disallowed the same on the ground that the said expenditure was paid by the assessee after the due date of the filing of the return u/s.139(4). It was a submission that the expenditure having been incurred, the same was liable to be included in respect of cost of the new property purchased. It was a submission that Ground Nos.8 & 9 are related to the Ground Nos.6 & 7. Ground No.10 was against levy of interest u/s.234B. It was a submission that the order of Ld.CIT(A) may be reversed and the AO may be directed to allow the claim of the assessee.
In reply, the Ld.DR vehemently supported the orders of AO & Ld.CIT(A).
We have considered the rival submissions. Ground Nos.1 & 2 of the assessee are general in nature, which do not need any adjudication. In respect of Ground Nos.3 to 5, a perusal of the Assessment Order shows that the AO has taken the stand that the house property which was sold, was first held by the assessee on 24.12.2007, when she received same
ITA No.3074/Mds/2016 :- 4 -: through the settlement deed and consequently fell within the FY 2007-08.
However, admittedly, the property was purchased by the assessee’s mother during the FY 2004-05. The said property has come into the hands of the assessee through a settlement deed. A perusal of the decision of the Hon’ble Bombay High Court in the case of Manjula J Shah referred to supra shows, it has been held that when determining the indexed cost of acquisition u/s.48, in construing the words ‘asset was held by the assessee’ one has to see the object with which the said words are used in the statute and consequently the period for which the asset was held by the previous owner is to be included in determining period for which asset was held by the assessee in view of the provisio of section 49(1) when the same was received as a gift. Consequently, indexation would have to be granted to the assessee from the FY 2004-05 being the year in which the assessee’s mother had purchased the said property which was received by the assessee through settlement deed dated 24.12.2007. In these circumstances, the AO has directed to apply index in respect of the cost of acquisition as of FY 2004-05 as against 2007-08 as adopted by the AO. In these circumstances, Ground Nos.3 to 5 of the assessee’s appeal stands allowed.
In respect of Ground Nos.6 to 9, on perusal of the Assessment Order clearly shows that the expenditure has been paid by the assessee after the due date of filing of the return u/s.139(4) as has been brought out by the AO in Para No.3.2(d) at Page No.11 of the Assessment Order. This ITA No.3074/Mds/2016 :- 5 -:
finding of the fact as recorded by the AO has not been dislodged by the assessee. This being so, the findings of the AO and that of the Ld.CIT(A) on this issue stands confirmed. In the result, Ground Nos.6 to 9 are stands dismissed.
Ground No.10 is levy of interest u/s.234B, which is consequential in nature.
In the result, the appeal filed by the assessee is partly allowed.
Order pronounced in the Open Court on July 11, 2017, at Chennai.