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2016 (6) TMI 1081 - ITAT CHENNAI

2016 (6) TMI 1081 - ITAT CHENNAI - TMI - Entitlement to cost of inflation index - inheritance of property - cost of inflation index from the year of inheritance of property and not from the date it was held by the previous owner - Held that:- The assessee inherited the property on 04.08.2010. The said property was purchased by the assessee’s father before 1981. After the death of the assessee’s father, the property was inherited to the assessee along with other co-owners. Accordingly, the cost o .....

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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) Act, 2014, with effect from 01.04.2015, inserted after existing proviso to sub-section(1 .....

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High Court cited above, we are inclined to hold that the claim of assessee wherein the assessee has invested ₹ 50/- lakhs within six months of date of sale, but in two different financial years, is entitled for deduction u/s.54EC of the Act.- Decided in favour of assessee. - I.T.A.No.770/Mds./2016 - Dated:- 3-6-2016 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND Shri Duvvuru RL Reddy, JUDICIAL MEMBER For The Appellant : Mr.J.C.Prakash, CA For The Respondent : Mr.A.V.Sreekanth, JCIT,DR ORDE .....

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ase 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 Avenuè, 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 determine .....

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year of inheritance of property i.e.2010-11 as the year of acquisition. Aggrieved by this, the assessee filed appeal before the Ld.CIT(A). On appeal, Ld.CIT(A) observed that the assessee was inherited the property after the demise of her father on 04/08/2010. According to him, the assessee is entitled for benefit for cost of acquisition from Financial Year 2010-11. Accordingly, Ld.CIT(A) dismissed the appeal of assessee. 4. The contention of the assessee s counsel is that the property was inher .....

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)(iii)(a) of the Act, whereas the capital asset became the property of the assessee by succession, inheritance or devolution, 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 inflati .....

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Commissioner of Income-tax(Appeals), the assessee became the owner of the property only on 04.08.2010 and there is no question of consideration of cost of asset in terms of sec.49(1)(iii)(a) of the Act. 6. It is to be noted that this Tribunal in the case of Smt. Mina Deogun v. ITO(19 SOT 183)(Kol.), after considering the Memorandum explaining the Finance Bill 1992 and CBDT Circular No.636 dated 13.8.1992 (107 CTR(St.), held that indexation is to be allowed in respect of period of holding of the .....

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by the assessee, in the case of a capital asset which becomes the property of the assessee by way of succession, inheritance etc., the period for which the asset was held by the previous owner shall also be included. 7. It is also to be noted that in the case of DCIT v. Kishore Kanungo (102 ITD 437), the Mumbai Bench of this Tribunal, held that indexation is to be allowed only from the year in which the assessee became the owner of the property. Contrary to this, Vishakhapatnam Bench in the cas .....

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w which is in favour of the assessee, has to be adopted. In this regard, we make reference to the decision of the Supreme Court in the case of CIT v. Vegetable Products Ltd. (88 ITR 192). 8. In view of this, we hold that in the present case, the assessee inherited the property on 04.08.2010. The said property was purchased by the assessee s father before 1981. After the death of the assessee s father, the property was inherited to the assessee along with other co-owners. Accordingly, the cost of .....

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view was taken in the case of CIT Vs. Manjula J.Shah reported in 355 ITR 474(Bom.). Accordingly, this appeal of the assessee is allowed. 9. The second ground is with regard to allowability of deduction u/s.54EC of the Act in respect of amount which was invested at ₹ 50 lakhs within six months of date of sale, but in two different financial years. 10. In this case, the assessee made investments in REC Bonds during financial year 2011-12 & 2012-13 at ₹ 50 lakhs each and claimed ded .....

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