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Sri Arijit Chakraborty Versus I.T.O Ward 46 (1) , Kolkata And Vice-Versa

Determination of fair market value as on 1.4.1981 for the purpose of granting deduction while computing capital gains - indexation - reference to DVO - Held that:- Property had been inherited by the assessee from grandmother who had acquired it before 1981. We hold that the indexation cost has to be given from the date from when the asset was held by the previous owner from whom it was inherited.

We cannot brush aside the fact that the Learned AO had not referred the case to DVO for .....

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essee has got any objections to the value determined by DVO, he is at liberty to file the same. But he chose not to file any objections for the same inspite of several opportunities provided to him by the Learned AO which is elaborated in the assessment order. Moreover, the assessee ought to have carried the matter further to the Hon’ble Calcutta High Court against the order of this tribunal in the first round of appellate proceedings in case if he had any grievance. We find that the assessee wa .....

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her CIT(A) was wrong in not considering the fact that the AO has made provisional attachment u/s.281B of the I.T Act on 17.01.2009 whereas he has charged interest u/s. 234A & 234B upto the date of assessment order which is completely arbitrary, unjustified and illegal? - Held that:- . We find lot of force in the arguments of the Learned AR on the aspect of adjustment of monies available in post office towards payment of taxes with corresponding impact on interest calculations. We hold that the m .....

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DR ORDER Shri M. Balaganesh, AM These appeals of the assessee as well as the revenue arise out of the order of the Learned CIT(A), XXX, Kolkata in Appeal No. 213/CIT(A)-XXX/Wd-46(1)/2011- 12 dated 29.10.2012 against the order of assessment for the Asst Year 2005-06 framed by the Learned AO u/s 143(3) read with section 254 of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. The assessee has raised various grounds in this appeal. But during the course of hearing, he stated that t .....

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of the assessee at ₹ 90,41,369/- ( comprising of Long Term capital gain of ₹ 89,73,425/- and Other Source Income of ₹ 67,944/-). The returned income of the assessee was ₹ 86,940/- and the Gross Total Income of the assessee comprised of Part Time Job Income of ₹ 24,000 / -and Income from Other Source of ₹ 74,944/- the assessee has also claimed Capital Loss of ₹ 6,00,000/.-, in the return ). In the assessment order dt. 31/12/2008, the sale consideration o .....

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of the A.O. The assessee preferred appeal before the Hon'ble. I.T.A.T Kol. and the Hon'ble. I.T.A.T. 'A' Bench Kolkata vide order dt. 07/05/2010 has restored the matter to the file of the A.O. "for re computing the long term capital gain after referring the matter to the valuation cell for valuing the property as on the date of sale and also as on 1/4/ 1981 " Adhering to the direction of the Ld. I.T.A.T , reference was made to the Valuation Cell, I.T. Department, Kolka .....

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. 3.2 The Learned AO as per the directions of this Tribunal in the first round of appellate proceedings referred the valuation of the property to DVO as on 1.4.1981 and as on the date of sale i.e 25.5.2004 and computed capital gains. While computing capital gains, the Learned AO did not give indexation benefit for the cost of acquisition as according to him the property got vested in the hands of the assessee only from 1999 pursuant to the probate order. On first appeal, the Learned CITA upheld .....

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acquired it before 1981. We hold that the indexation cost has to be given from the date from when the asset was held by the previous owner from whom it was inherited. This is supported by the view taken by the co-ordinate bench decision of this Tribunal in the case of Smt.Mira Deogun vs ITO reported in 117 TTJ Kol 121 dated 3.8.2007 , wherein it was held as below:- "8.6 A con-joint reading of the Memorandum explaining the Finance Bill, 1992 and CBDT Circular NO.636 shows that the indexation .....

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ssessing Officer himself allowed the benefit of "fair market value" of the property as on 1-4- 1981 to be cost under section 55(2)(b)(ii) of the Act. Under section 2(49A) the period of holding of the capital asset in the hands of the assessee was the period commencing from 16-4-1958 till the date of transfer. It is therefore quite clear that as on 1-4-1981 the asset was statutorily considered to be held, by the assessee under section 55(2)(b)(ii) read with section 2(49A) of the Act. In .....

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market value of 1-4-1981 to be the cost of acquisition. The assessee computed the indexed cost of acquisition with reference to the cost of inflation index of 1-4-1981 being 100 per cent. Assessee's father expired on 17-2-1991 and the Assessing Officer allowed the indexation of cost with reference to the cost inflation index of financial year 1990-91 as against inflation index of 100 per cent. The Tribunal, however held that the assessee was entitled to compute capital gain by applying cost .....

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exed cost of acquisition; the date of acquisition by the previous owner is excluded then it will lead to absurd result. Such interpretation of section 48 will be against the intent and object of the enactment and will be against the overall scheme of taxation of capital gains in case of inherited assets. The cardinal principles of interpretation of statutes is that if literal meaning of the statute leads to an absurdity then the statute should be interpreted in a manner which will result in harm .....

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e addressed is the determination of fair market value as on 1.4.1981 for the purpose of computing long term capital gains. The Learned AR placed reliance on the decision of this tribunal in the case of Vivek Bose vs ITO in ITA No. 1236/Kol/2013 dated 19.12.2013 which was also approved by the Hon ble Calcutta High Court vide its order dated 20.8.2014. He placed orders of both vide pages 125 to 135 of his paper book. In these orders, it was held that reference to Departmental Valuation Officer (DV .....

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lition. Instead it was done based on the directions of this tribunal in the first round of appellate proceedings. In-fact, it is also seen that the assessee himself had raised this issue as an additional ground before this tribunal with a prayer to refer the case to DVO. While this is so, the assessee cannot have any grievance of the fact of Learned AO referring to DVO for determination of fair market value as on 1.4.1981. If the assessee has got any objections to the value determined by DVO, he .....

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find that the determination of fair market value as on the date of sale i/e 25.5.2004 by DVO after giving reduction of 15% towards various encumbrances attached to the property , cannot be faulted with. In these facts and circumstances, it is only just and proper to hold that the reference made by the Learned AO to DVO at the instance of the order of this tribunal cannot be faulted with. Accordingly, the ground raised by the assessee in this regard is dismissed. 5. The assessee has raised the f .....

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