2023 (1) TMI 971 - AT - Income Tax
Denial of natural justice - CIT(Appeals) deciding on fresh evidence without giving opportunity of being heard to the AO - HELD THAT:- As perusing the orders of the lower authorities wherein the finding of the Assessing Officer was that assessee was asked to produce documentary evidence with regard to cost of improvement claimed but the assessee failed to give any documentary evidence with regard to the said claim. Therefore, we are of the considered opinion that this matter should go back to the AO for proper verification of the evidence in respect of cost of improvement claimed by the assessee. We restore ground Nos. 1 and 2 of grounds of appeal of the Revenue to the file of the AO with a direction for de novo adjudication of cost of improvement claimed by the assessee.
Claim of the assessee of cost of improvement - CIT-A held inherited property cost of acquisition as well as the cost of improvement by the previous owner of a capital asset the indexation shall be allowed during the year of acquisition or improvement by the previous owner or the year of inheritance by the person, who sold the property - HELD THAT:- Hon’ble Bombay High Court in the case of CIT Vs. Manjula J. Shah[2011 (10) TMI 406 - BOMBAY HIGH COURT] affirmed the view of the Tribunal in holding that while computing the capital gains arising on transfer of a capital asset acquired by the assessee under a gift or inheritance the index cost of acquisition has to be computed with reference to the year in which the previous owner first held the asset and not the year in which the assessee became the owner of the asset. Similar view has been taken by Arun Shungloo Trust [2012 (2) TMI 259 - DELHI HIGH COURT] - We direct the AO to allow the cost of indexation to the assessee keeping in view the principles laid down by the above judgements. Appeal of the assessee is allowed.