UMA KYMAL,CHENNAI vs. ITO, CHENNAI

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ITA 1906/CHNY/2016Status: DisposedITAT Chennai31 January 2017AY 2012-134 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the cost inflation index should be adopted from the year in which the original owner (the mother) acquired the property, following the Bombay High Court's decision in CIT Vs. Manjula J Shah. The pendency of a Special Leave Petition against this judgment was not considered a reason to deviate.

What were the facts?

The assessee inherited a property from her mother and sold it. The dispute arose over the date from which the cost inflation index should be applied for calculating capital gains. The Assessing Officer argued it should be from the date of inheritance, while the assessee contended it should be from the date of original purchase by her mother.

What were the issues?

The primary issue was the correct year for applying the cost inflation index for capital gains calculation when a property is inherited.

Which sections of the Income-tax Act were involved?

Not explicitly mentioned, but relates to capital gains computation.

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI D.S. SUNDER SINGH

Hearing: 15.12.2016Pronounced: 31.01.2017

आयकर अपीलीय अिधकरण, ’सी’ �यायपीठ, चे�ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI �ी एन.आर.एस. गणेशन, �याियक सद�य एवं �ी िड.एस. सु�दर �सह, लेखा सद�य केसम� BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 1906/Mds/2016 िनधा�रण वष� / Assessment Year : 2012 - 13 Smt. Uma Kymal, Income Tax Officer, No.5/82, Blue Beach Road, v. International Taxation – 1 (2), Neelangarai, Chennai – 34. Chennai – 600 041. PAN : BWQPK5872D (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/Appellant by : Shri B. Ramakrishnan, FCA ��यथ� क� ओर से/Respondent by : Shri Murali Mohan, JCIT सुनवाई क� तारीख/Date of Hearing : 15.12.2016 घोषणा क� तारीख/Date of Pronouncement : 31.01.2017 आदेश आदेश /O R D E R आदेश आदेश PER N.R.S. GANESAN, JUDICIAL MEMBER:

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-16, Chennai dated 28.03.2016 and pertains to the Assessing Officer 2012-13.

2.

Shri B. Ramakrishnan, the Ld. Representative for the assessee submitted that the only issue arises for consideration is computation of capital gain. According to the Ld. Representative, assessee’s mother Smt. Saraswathy Kymal purchased a property to the extent of 23.5 cents by means of a registered sale deed on 16.03.2006 for a total consideration of ₹26,44,800/-. The assessee’s mother subsequently executed a will on 15.11.2006 bequeathing the property to the assessee. The assessee’s mother Smt. Saraswathy Kymal expired on 17.10.2010. The assessee sold the said property on 23.11.2011. The assessee adopted inflation index from the date of purchase of the property by her mother. However, the Assessing Officer found that the assessee inherited the property on 17.10.2010 on the death of her mother.

Therefore cost of inflation index has to be computed only from 17.10.2010. Placing reliance in the order of this Tribunal in the assessee’s own case for the assessment year 2011-12 in submitted that this Tribunal by placing reliance on the order of the Bombay High Court in CIT Vs. Manjula J Shah, 355 ITR 474, found that the cost of inflation index has to be applied from the year in which the original owner acquired the property. Therefore, according to the Ld. Representative the CIT (Appeals) is not justified in confirming the order of the Assessing Officer.

3.

On the contrary, Shri Murali Mohan, the Ld. Departmental Representative submitted that the assessee inherited the property only on the death of the assessee’s mother on 17.10.2010.

Therefore, the cost of inflation index has to be adopted from the financial year 2010-11. The Ld. D.R. further submitted that the Revenue has already filed Special Leave Petition before the Hon’ble Supreme Court against the order of Bombay High Court supra.

4.

We have considered the rival submissions on either side and perused the material available on record. It is not in dispute that the assessee inherited the property from her mother. It is also not in dispute that the assessee’s mother executed a will on 15.11.2006. Therefore, as found by the Bombay High Court in CIT Vs. Manjula J Shah supra, the cost inflation index has to be adopted in the year in which the mother acquired the property. Merely, because a Special Leave Petition is pending before the Apex Court against the Judgment of the Bombay High Court, this Tribunal is of the considered opinion that it cannot be a reason to take a different view. Moreover, co-ordinate bench of this Tribunal in the assessee’s case for the assessment year 2011-12 found that the cost inflation index has to be adopted from the year in which the original owner acquired the property.

5.

In view of the above, we are unable to uphold the order of the lower authorities. Accordingly, the same is set aside. The Assessing Officer is directed to adopt the cost inflation index from the year in which her mother acquired the property.

6.

In the result, the appeal of the assessee stands allowed.

Order pronounced on 31st January, 2017 at Chennai.

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