Nishita Vijay Mehta Vs ITO (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT) Mumbai considered cross appeals filed by both the assessee and the revenue against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for Assessment Year 2017-18. The dispute concerned three issues: denial of exemptions under sections 54F and 54EC, denial of indexation benefit, and treatment of 50% of the sale proceeds as income from other sources. The assessee had sold 87 shares of Industrial Minerals & Chemicals Company Pvt. Ltd. (IMCCPL) for Rs. 5,80,77,423 and declared long-term capital gains of Rs. 5,05,58,665 after indexation. The assessee invested Rs. 5.25 crore in the Capital Gain Account Scheme (CGAS) and Rs. 50 lakh in bonds, claiming deductions under sections 54F and 54EC. The shares were received as a gift from her father, Vijay Tulsidas Mehta, who himself inherited them from the Kamlaben Shamjibhai Mehta Family Trust.
The Assessing Officer (AO) denied the exemptions on the ground that the assessee submitted no supporting documents and held that investments were made beyond the due dates. The AO also denied indexation, reasoning that the assessee acquired the shares and transferred them in the same year. Further, the AO treated 50% of the sale consideration as income from other sources, holding that the shares were jointly held by the assessee and her father.
