ITO, CHENNAI vs. SHRI S. RAJAGOPALAN, CHENNAI

PDF · subscribers
ITA 2755/CHNY/2016Status: DisposedITAT Chennai05 January 2017AY 2006-074 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 when an asset is inherited, the indexed cost of acquisition should be adopted from the year the original owner acquired the property, provided it was acquired before April 1, 1981. The CIT(A)'s direction to allow indexation from April 1, 1981, was confirmed.

What were the facts?

The assessee inherited a one-fourth share of a property from his father, who had acquired it earlier. The assessee computed capital gains using indexation from the father's acquisition date, while the AO sought to use the inheritance date.

What were the issues?

The key issue was whether the benefit of indexation for capital gains on inherited property should be calculated from the date of inheritance or the date of the original acquisition by the predecessor.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

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

Hearing: 28.12.2016Pronounced: 05.01.2017

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) – 5, Chennai dated 14.07.2016 and pertain to the assessment year 2006-07.

2.

No one appeared for the assessee even though notice of hearing was issued to the assessee. Therefore, we heard the Ld. Departmental Representative and proceeded to dispose the appeal on merit.

3.

Shri V. Nandakumar, the Ld. D.R., submitted that the only issue arises for consideration is computation of capital gain.

According to the Ld. D.R., the assessee inherited one-fourth share of the property at Kodambakkam from his father Shri R. Seetharaman. In fact, Shri R. Seetharaman, the father of the assessee died on 17.02.1990. According to the Ld. D.R., the assessee inherited the property during the financial year 1989-90.

Therefore the indexed cost of acquisition has to be adopted from the year in which the assessee inherited the property from his father. However, the assessee computed the indexation from 01.04.1981, taking the date of acquisition of the asset by his father Shri R. Seetharaman. Therefore, the Assessing Officer recomputed the capital gain by adopting the indexed cost of acquisition from the financial year 1989-90.

4.

We have considered the submission of the D.R., and also perused the material available on record. It is not in dispute that the assessee’s father acquired the property and on the death of the assessee’s father on 17.02.1990, the assessee being one of the legal heirs inherited one-fourth share in the property. The question arises for consideration is whether the indexed cost of acquisition has to be adopted from the year in which the assessee inherited the property or the year in which the assessee’s father acquired the property. This Tribunal is of the considered opinion, when the assessee’s father acquired the property and the assessee inherited the property on the death of the father, the indexed cost of acquisition has to be adopted from the year in which the assessee’s father acquired the property. In fact, the CIT (Appeals) by following the judgment of the Bombay High Court in the case of CIT v Manjula J Shah (2013) 335 ITR 474 directed the Assessing Officer to give the benefit of indexation from 01.04.1981 provided the said property was acquired by the assessee’s father prior to 01.04.1981.

Hence, this Tribunal did not find any reason to interfere with the order of the lower authority. Accordingly the same is confirmed.

6.

In the result, the appeal of the Revenue stands dismissed.

Order pronounced on 5th January, 2017 at Chennai.

Recent GST High Court judgments

Search GST case law →