D. K. Brothers Vs ITO (ITAT Mumbai)
Introduction: In a significant ruling, the Income Tax Appellate Tribunal (ITAT) Mumbai, in the case of D.K. Brothers vs. ITO, has set aside the order passed by the National Faceless Appeal Centre (NFAC) regarding the assessment year 2011-12. The dispute revolves around the computation of capital gains, with the key contention being the date of acquisition. This article delves into the details of the case and the implications of the ITAT Mumbai order.
Detailed Analysis: The appellant, M/s. D.K. Brothers, challenged the assessment order passed by the Assessing Officer (AO), who determined the total income at Rs. 45,49,200 under short-term capital gains. The AO considered the date of registration of the property on 15.09.2010 as the acquisition date, contrary to the appellant’s claim of using the property allotment date, 28.01.1992, for computing long-term capital loss.
The dispute centers around the correct date of acquisition for capital gain calculation. The AO’s decision was upheld by the Commissioner of Income Tax (Appeals) [CIT(A)], leading the appellant to appeal to the ITAT Mumbai.
The ITAT Mumbai, after considering the facts and legal aspects, concluded that the date of property allotment, 28.01.1992, should be considered as the acquisition date for computing capital gains. This decision is in line with established principles and precedents, emphasizing the importance of the allotment date in such cases.
Conclusion: The ITAT Mumbai’s order in the case of D.K. Brothers vs. ITO clarifies the determination of the acquisition date for capital gain computation. By setting aside the earlier decision and deleting the addition made by the AO, the ITAT reaffirms the significance of the property allotment date in such scenarios. This ruling carries implications for similar cases and reinforces the adherence to established principles in computing capital gains.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The appellant, M/s. D.K. Brothers (hereinafter referred to as ‘the assessee’) by filing the present appeal, sought to set aside the impugned order dated 18.04.2023 passed by the National Faceless Appeal Centre(NFAC) [Commissioner of Income Tax (Appeals), Delhi] (hereinafter referred to as CIT(A)] qua the assessment year 2011-12 on the grounds inter-alia that :-
“1. The Ld. Assessing Officer (hereinafter referred to as ‘Ld. A.O.’] erred in passing the Assessment Order dated 13/03/2014 under section 143 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] determining the total income of the Appellant at Rs. 45,49,200/- vide order dated 13/03/2014 passed under Section 143 of the Act, 1961 as against returned Loss of Rs. 90,514/- under the head Long term capital gain, without appreciating the facts and circumstances of the case. The Ld. AO has disregarded the board circular as well as high court judgement in calculating the holding period of the Assets sold and instead of treating long term capital assets consider it as a short- term capital assets & treat the capital gain aroused on it as short-term capital gains instead of long capital gains. The Appellant strongly objects to the action of the Ld. AO in making following additions and disallowances:
