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2017 (9) TMI 1837 - AT - Income TaxComputing the capital gains arising on transfer of a capital asset acquired by the assessee under gift - HELD THAT:- It has been held by Bombay High Court in Manjula J. Shah [2011 (10) TMI 406 - BOMBAY HIGH COURT] that the expression “held by the assessee” used in Explanation (iii) to section 48 has to be understood in the context and harmoniously with other Sections and as the cost of acquisition stipulated in section 49 means the cost for which the previous owner had acquired the property, the term “held by the assessee” should be interpreted to include the period during which the property was held by the previous owner. Hence, indexation of cost of improvement shall be allowed from the date the previous owner acquired that asset. Further, Hon’ble Delhi High Court in case of Arun Shungloo Trust [2012 (2) TMI 259 - DELHI HIGH COURT] has also held that benefit of indexation cost of improvement by previous owners in cases covered by section 49 would be allowed. Also in Smt. Daisy Devaiah [2014 (11) TMI 944 - KARNATAKA HIGH COURT] has held that when an asset is acquired by way of inheritance, cost of acquisition of asset should be calculated on basis of cost of acquisition by previous owner and said cost of acquisition has to be calculated on basis of indexed cost of acquisition as provided in Explanation (3) to section 48. We find that the present issue is squarely covered by the above judgments. We therefore, uphold the order of the Ld. CIT(A). Addition made on account of profit transferred due to client code changes - the assessee has done this transfer during the market hours and the volume of these transfers is also huge - HELD THAT:- As decided in M/S. SAMBHAVNATH INVESTMENT VERSUS THE ACIT, CENTRAL CIRCLE-46, MUMBAI [2014 (1) TMI 84 - ITAT MUMBAI] we failed to understand how can the assessee modify the client code or the details of transactions which have been transacted by the authorized broker RSBL on MCX. A person transacting through a registered broker cannot have any access to the terminal of the registered broker with the exchange be it stock exchange or commodity exchange. Thus the allegation of the Revenue authorities that the assessee has modified the client code does not have any basis. On the contrary, the transactions of the assessee with RSBL who in turn has transacted with MCX are supported by various contract notes. There is no more evidence to show that the broker RSBL has denied to have entered into these transactions on behalf of assessee. Mistake has occurred due to wrong punching of client code by the staff of the broker and the same was later on rectified with the NSE. It may be mentioned that even the NSE was aware of the fact that client code was initially punched wrong and thereafter it has been corrected by the broker. There is no illegality noticed in this change of client code. This is a mere human error and it can happen in every sphere of life. Therefore, this error is not so important which can lead to disallowance of entire loss - See E NET INFOWAYS P. LTD. [2012 (12) TMI 1186 - ITAT DELHI]
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