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Income Tax Appellate Tribunal, MUMBAI BENCH “J”, MUMBAI
Before: SHRI D. KARUNAKARA RAO & SHRI SANJAY GARG
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the Revenue against the order dated 27.03.2015 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2011-12.
The Revenue has taken the following grounds of appeal:
“1. On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) erred in allowing the indexation on the inherited capital asset and its calculation based on the year of the acquisition to the previous owner from whom the asset was inherited by the assessee instead adopting the year of acquisition as the year when the asset was actually acquired by the assessee.
2. The Appellant prays that the order of the Ld. CIT(A) on the above ground(s) be set aside and that of the Assessing Officer be restored.
Today none has come present on behalf of the assessee despite notice. However, the Ld. D.R. has fairly admitted that the issue is squarely covered by the decision of the Hon’ble Bombay High Court in the case of “CIT vs. Manjula J. Shah” (2012) 249 CTR (Bom.).
The assessee in this case had inherited some property. The issue before us is as to whether the claim of indexation is to be allowed from the date on which the previous owner acquired the property, from whom the assessee had inherited the property in question or from the date on which the assessee himself actually acquired the property. We find that the Ld. CIT(A) has allowed the relief to the assessee on the above issue following the decision of the Hon’ble Bombay High Court in “CIT vs. Manjula J. Shah” (supra) wherein it has been held that while computing the capital gains on transfer of a capital asset acquired by the assessee under a gift, the indexed cost of acquisition has to be computed with reference to the year in which the previous owner first held the asset and not the year in which the assessee became the owner of the asset. The Ld. CIT(A) has also relied upon another decision of the Hon’ble Bombay High Court in the case of “CIT vs. M/s. Janhavi S. Desai” (2012) 252 CTR 518 (Bom.) wherein similar view has been expressed.
So far as the contention that the Department has filed an appeal against the decision of the Hon’ble Bombay High Court is concerned, we find that as on today the issue is squarely covered by the decision of the jurisdictional High Court which is binding on this Tribunal. Hence, respectfully following the said decision, we do not find any infirmity in the order of the Ld. CIT(A) in relying upon the decision of the Hon’ble Bombay High Court while deciding the issue in favour of the assessee.
Order pronounced in the open court on 20.07.2016.