N.BHASKER,CHENNAI vs. ITO, CHENNAI

In this appeal filed by the assessee, its grievance is that indexation benefit considering the period of the ownership of the previous owner was not given to it for calculating Long Term Capital Gains.

When the appeal was called up, nobody appeared on behalf of the assessee. However, we find that subject property on which long term capital gains was computed came to assessee’s ownership by virtue of a will dated 21.08.2000. Property was owned by assessee’s :- 2 -: mother. Assessee had sought indexation considering the period of ownership of Smt. Lakshmibanu Rao. However, ld. Assessing Officer had allowed indexation only from financial year 2002-2003 since Smt.

We find the issue in question is covered by the judgment of Hon’ble Bombay High Court in the case of CIT vs. Manjula J. Shah 355 ITR 474. Ld. Commissioner of Income Tax (Appeals) had not followed the above judgment citing a pending Special Leave Petition (SLP) filed by the Department against above judgment. We find that SLP was already dismissed by the Hon’ble Apex Court. When a property come to assessee by virtue of succession, inheritance or devolution , its year of acquisition should be deemed as the year of acquisition by the previous owner for the purpose of indexation. Therefore, we are of the opinion that assessee has to succeed in this appeal.