Case Law Details
Easwari Sukanya Krishnan Vs ITO (ITAT Chennai)
Introduction: In the case of Easwari Sukanya Krishnan Vs. Income Tax Officer (ITO), the Income Tax Appellate Tribunal (ITAT) in Chennai ruled on the determination of the base year for availing indexation benefits in respect of inherited properties. The revenue challenged the assessee’s claim of indexation from a specific financial year.
Analysis: The assessee had sold a property during the relevant year and claimed indexation of the cost from the financial year 2001-02 i.e. year in which property was acquired by mother from whom assessee inherited the property, resulting in a capital loss. The Assessing Officer (AO) disagreed with the assessee’s claim and allowed indexation benefits only from the financial year 2014-15, leading to a re-computation of gains. The assessee relied on a decision of the Hon’ble High Court of Madras in CIT vs. Saroja Naidu (128 Taxmann.com 127) to support their computations.
The key issue in the appeal was the determination of the base year for indexation benefits. The AO rejected the assessee’s claim, but the Commissioner of Income Tax (Appeals) allowed it based on the cited decision of the Madras High Court. The revenue then appealed to the ITAT.
The ITAT observed that the impugned order followed a binding judicial precedent set by the jurisdictional High Court. The revenue could not provide any contrary argument to challenge this position. Consequently, the ITAT upheld the indexation benefit as per the judicial precedent of the Madras High Court.
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