Case Law Details

Case Name : ITO Vs Mrs. Bibi Siddiqua Husaini (ITAT Mumbai)
Appeal Number : ITA No. 1975/M/2011
Date of Judgement/Order : 27/08/2014
Related Assessment Year :
Courts : All ITAT (5022) ITAT Mumbai (1607)

The brief facts of the case are that the assessee had sold her immovable property being residential flat No.101, 1st floor, Hill Queen, Pali Malla Road, Bandra, Mumbai for Rs. 1,55,00,000/- on 30.08.2006 and after indexation Long Term Capitasl Gains( LTCG) of Rs.1,26,20,624/- were determined. However the assessee claimed exemption u/s.54 on account of investments in two new flats and claimed the net LTCG of Rs. NIL. It had been contented on behalf of the assessee that the property was acquired by her late husband Mr. Sultan Huseini in the F.Y.1999-2000 for a consideration of Rs.27,05.404/-. The property was passed to the assessee on 19.02.2004 i.e. the date when her husband died. The assessee contented for the purpose of indexation, the date should be reckoned from the date from which the original owner, i.e. the husband of the assessee, held the property. The ld. AO however observed that indexation could only be allowed from the year in which the asset was first held by the assessee. He held that in the case in hand, the asset for the first time vested in the assessee only on 19.2.2004, he therefore allowed the indexation from Financial Year 2004-05.

In appeal, the ld. CIT(A) held that that in view of the decision of Special Bench of Mumbai ITAT in “DCIT vs. Manjula J. Shah” 318 ITR AT 417, for the purpose of indexation, the date should be reckoned from the date from which the original owner held the property. He further observed that the decision of the Special Bench of the Tribunal in the case of “DCIT vs. Manjula Shah” (supra) was squarely applicable to the facts of the case of the assessee. He therefore directed the AO to adopt cost inflation index of acquisition of the capital asset with reference to the year in which the previous owner first held the asset i.e. from 1.4.1981 and to compute the long term capital gain accordingly. The Revenue is thus in appeal before us.

We may observe that the Special Bench decision of the Tribunal in the case of “DCIT vs. Manjula J. Shah” (supra) has been further approved by the Hon’ble Bombay High Court cited as “CIT vs. Manjula J. Shah” (2013) 355 ITR 0474.

The ld. D.R. could not bring, before us, any law contrary to the above decision of the Hon’ble Bombay High Court.

In view of the above, we do not find any infirmity in the order of the ld. CIT(A) and the same is hereby upheld.

In the result, the appeal of the Revenue is hereby dismissed.

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