TMI Blog2016 (7) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... 001. Thereafter, the property was gifted to the assessee on November 20, 2005. Accordingly, the cost of indexation to be applied as on April 1, 1981, after fixing the value of asset as on April 1, 1981, and it cannot be said that the assessee acquired the property under dispute on November 20, 2005, so as to compute the capital gains as short-term capital gains. In other words, capital gains has to be assessed as long-term capital gains by fixing the cost of asset as on April 1, 1981, and, thereafter, applying the cost of inflation index in terms of section49(1)(iii)(a) of the Act and, consequently, the assessee is also entitled for exemption under section 54 of the Act. - Decided in favour of assessee. - I. T. A. No. 549/Mds/2016 - - - Da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he property was originally purchased by his father, Shri Harichand, along with his brother, Shri Vashdev, and their father, the late Keshavdas, in the year 1971. On the death of their father, i.e., Keshevdas on June 24, 2001, the assessee's father and his brother became entitled to half share each in the property. Out of his half share in the property, the assessee's father, i.e., Shri Harichand gifted one-third share in the property by deed of settlement dated November 20, 2005. The assessee became entitled to one-sixth share in that property. In the computation of total income submitted by the assessee, he has adopted the cost inflation index of 100 relevant for the financial year 1981-82 for arriving at the indexed cost but the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the assessee's father became the owner of the ancestral property. According to the Commissioner of Income-tax (Appeals), it is not possible to accept that the period of holding the property by the assessee's grandfather should also be taken into account. Before the Commissioner of Income-tax (Appeals), the assessee could not establish with a title deed or encumbrance certificate when the assessee's father became the owner of the said ancestral property. In the absence of the same, the Commissioner of Income-tax (Appeals) observed that it is not acceptable that the assessee's father was holding the said property to take advantage of Explanation 1(i)(b) to section 2(42A) of the Act. According to the Commissioner of Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not mention whether the assessee's father got the property through will or otherwise. If the assessee's father got the property through will, whether the same will was probated after the demise of the assessee's grandfather, is not brought on record and the will, which was produced before the Tribunal was not at all before the lower authorities. As such, it is not possible to accept that the period of holding of the property by the assessee's grandfather should also be taken into account. 6. As discussed earlier, the property was acquired in the year 1971 by the assessee's grandfather and his two sons. The assessee's grandfather died on June 24, 2001, and after the death, the assessee's father and his un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. 7. It is to be noted that this Tribunal in the case of Smt. Mina Deogun v. ITO [2008] 19 SOT 183 (Kol), after considering the Memorandum Explaining the Finance Bill, 1992, and the Central Board of Direct Taxes Circular No. 636, dated August 31, 1992 ([1992] 198 ITR (St.) 1; [1992] 107 CTR (St.) 1), held that indexation is to be allowed in respect of the period of holding of the asset and not in relation to the individuality of the assessee. Accordingly, it was held that for the purpose of determining the period of holding, intermediate transfers on account of succession are to be ignored. Similarly, in the case of Mrs. Pushpa Sofat v. ITO [2002] 81 ITD 1 (Chandigarh), the Chandigarh Bench of this Tribunal has expressed a similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee inherited the property on November 20, 2005. However, the said property was purchased by the assessee's ancestors, i.e., grandfather, the late Keshavdas on June 14, 1971, and after that it was bequeathed to the assessee's father, Shri Harichand, on the death of his grandfather on June 24, 2001. Thereafter, the property was gifted to the assessee on November 20, 2005. Accordingly, the cost of indexation to be applied as on April 1, 1981, after fixing the value of asset as on April 1, 1981, and it cannot be said that the assessee acquired the property under dispute on November 20, 2005, so as to compute the capital gains as short-term capital gains. In other words, capital gains has to be assessed as long-term capital gains ..... X X X X Extracts X X X X X X X X Extracts X X X X
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