TMI Blog2016 (6) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute only on 04.08.2010 on the death of the assessee’s father so as to compute the capital gains. In other words, capital gains has to be assessed as long term capital gains by fixing the cost of asset as on 1.4.1981 and thereafter applying the cost of inflation index in terms of sec.49(1)(iii)(a) of the Act. It needless to say that same view was taken in the case of CIT Vs. Manjula J.Shah reported in (2011 (10) TMI 406 - BOMBAY HIGH COURT ) Decided in favour of assessee. Allowability of deduction u/s.54EC - Held that:- The issue is squarely covered by the judgement of jurisdictional High Court in the case of CIT Vs. C.Jaichander reported in [2014 (11) TMI 54 - MADRAS HIGH COURT ] wherein it was held that legislature by Finance (No.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the year of inheritance of property and not from the date it was held by the previous owner. 3. The brief facts of the case is that assessee is a non-resident, filed her return of income for assessment year 2012-13 declaring total income at ₹ 37,89,970/-. The assessee had sold her inherited house property during the previous year 2011-12 (along with three coowners) at Kasturi Avenu , MRC Nagar, R.A.Puram, Chennai . The assessee s share was ₹ 1,42,50,000/-. The assesse had determined her Income under Long Term Capital Gain at ₹ 35,19,134/-. The Cost of Indexation of the asset was determined at ₹ 7,30,66/-. The property was inherited by the assesse after the demise of her father on 04/08/2010. The property had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement incurred by the previous owner of the assessee, as the case may be. For the purpose of computation of capital gains, the cost of asset should be revised upwards by applying the appropriate cost of inflation index. If the asset was acquired prior to 1st April, 1981, the cost of inflation index relating to the financial year 1981-82 is required to be applied for the purpose of arriving at the index cost of asset. The Commissioner of Income-tax (Appeals) observed that the assessee became the owner of the property under consideration only on the death of assessee s father i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e allowed only from the year in which the assessee became the owner of the property. Contrary to this, Vishakhapatnam Bench in the case of M. Sivaparvathi Others v. ITO (7 ITR (Trib) 468) held that, the assessee having inheritant property purchased by the previous owner in the year 1974, the cost of acquisition for the purpose of computation of capital gains on the sale of such property had to be computed by applying the cost of inflation index by financial year 1981-82 and not by financial year 1989-90 i.e. the year of inheritance by the assessee. Thus, it is a settled proposition that when two views are possible, a view which is in favour of the assessee, has to be adopted. In this regard, we make reference to the decision of the Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, the investments made on or before First day of April, 2007 in the long term specified asset by an assessee during any financial year does not exceed fifty lakh rupees (Rs. 50/- lakhs). 11. We have heard both the parties and perused the material on record. In our opinion, the issue is squarely covered by the judgement of jurisdictional High Court in the case of CIT Vs. C.Jaichander reported in [2015] 370 ITR 0579(Mad.) wherein it was held that legislature by Finance (No.2) Act, 2014, with effect from 01.04.2015, inserted after existing proviso to sub-section(1) of Section 54EC second proviso, as per which investment made by an assessee in long term specified asset, out of capital gains arising from transfer of one or more orig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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