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TMI Blog2018 (10) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... r acquiring the property was entered into and registered, as claimed by the appellant, which is supported by the decision of the Hon. ITAT, Mumbai Bench "D", Mumbai in ITA No.6578/Mum/2010 in the case of ACIT CIT 9(3), Mumbai vs. Shri Ramprakash Bubna. 2. "On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income-tax (Appeals) further erred in directing the Assessing Officer not to allow the benefit of indexation in respect of payments of Rs. 18,32,137/- and Rs. 13,44,187/- stating these payments have been made in F.Y.2011-12, being less than 36 months from the date of sale, thereby ordering enhancement of income and that too without issue of any show cause to the appellant to this effect. An additional ground of appeal has been filed by the Ld. Auhtorized Representative for Assessee [AR] which reads as under:- 3. "On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income-tax (Appeals) erred in not providing any finding on the submissions of the Appellant with regard to VAT paid of Rs. 11,35,167/- on purchase of flat. The Ld. Departmental Representative [DR] has opposed the same. However, we find t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return of income as Long Term Capital Gains [LTCG]. 2.2 However, not convinced with working of the assessee, Ld. AO, by applying index of respective years in which the payments were actually made, worked out LTCG of Rs. 148.20 Lacs and added the differential amount of Rs. 64.58 Lacs in the hands of the assessee. The indexation against the incidental expenses i.e. broker's fees / lawyer fees / tax advisor fees aggregating to Rs. 8.88 Lacs was denied to the assessee 3. Aggrieved, the assessee contested the same without any success before Ld. CIT(A) vide impugned order dated 05/10/2016, wherein the matter was concluded in the following manner:- Decision: - 6.2 1 have gone through the issue. While purchasing the property, some of payments were made by the assessee after 2007-08, but as per working of tong tern capital gains, the assessee had claimed indexed cost at Rs. 6,48,38,735/- from the date on which the purchase agreement was registered i.e.2007-08. The first date of payment was Rs. 29.09.2006 and the last date of payment was 29.8.2012. And, the AO has allowed the indexation as per the dates of payments for acquiring the property. The assessee has placed his reliance on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l in an appeal filed by the assessee, the Tribunal accepted the claim of the assessee for the following reasons given in paragraph No. 26 to 29. "26. Now, coming to the second question, which relates to the date from which the indexed cost of acquisition is to be computed. Here, it has been the case of the assessee that on the date of allotment of flat, the property was identified. The assessee got the right over the said property and from that date the indexation benefit has to be given to the assessee. Explanation (iii) to s. 48 reads as under which makes entitle the assessee to the indexation benefit: "(iii) 'indexed cost of acquisition' means an amount which bears to the cost of acquisition the same proportion as cost inflation index for the year in which the asset is transferred bears to the cost inflation index for the first year in which the asset was held by the assessee or for the year beginning on the 1st day of April 1981, whichever is later." 27. Learned Authorized Representative had pleaded that the language employed in explan. (iii) is in pari material with the language employed in s. 2(42A) where describing the definition of 'short -term capital asset" the wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or acquiring the said asset and the assessee has rightly claimed the indexation benefit from the dates when he has made the payments to the builder. Therefore, we see force in the claim of the assessee. The AO is directed to provide the benefit of indexation to the assessee in the manner in which the assessee has claimed. The coordinate bench of this Tribunal thus has decided a similar issue involving identical facts in favour of the assessee in the case of Praveen Gupta (supra) and that too after taking into consideration the provisions of Explanation (iii) to section 28 which have been relied upon by the learned DR at the time of hearing before us in support of the Revenue's case. The issue involved in the present case thus is squarely covered in favour of the assessee by the said decision of the Tribunal and respectfully following the same, we direct the AO to allow deduction on account of indexed cost of acquisition while computing the capital gain as claimed by the assessee." 6.4 As the above decision of the Hon'ble ITAT is subsequent to the decision in the case of Ramprakash Bubna (supra), respectfully following the above decision of the Hon'ble ITAT, the AO's action of com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant question that arises for consideration, at this juncture, is that whether the indexation benefit of even the future installments would also be allowable to the assessee from the year in which the asset is first held by the assessee. For this, our attention has been drawn to the decision of Hon'ble Gujarat High Court rendered in Nirmal Kumar Seth Vs CIT [17 Taxmann.com 127] wherein Hon'ble court has decided the issue as under:- 6. We have heard both the parties at length and gone through the material available on record. 7. From the record, it appears that the land in question was purchased from the Lucknow Development Authority on instalments basis for which registration was made on 01.12.1982 by paying a sum of Rs. 3000/- only. The remaining payment was made in instalments to Lucknow Development Authority, as per the chart given in the AO's order. As per the agreement, the right to get the sale deed registered in favour of the assessee was acquired, though subject to the full and final payment. After making the full and final payment, the assessee got the allotment letter in his favour in the year 1985. On getting the allotment letter, the assessee also obtained the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndexed by applying the respective indexes of those years. Ground Number-1 stand dismissed. 7. As a logical consequence, the directions of Ld. CIT(A) in not allowing the indexation benefits to payments of Rs. 18.32 Lacs & Rs. 13.44 Lacs in FY 2011-12 could not be sustained since the payments made within a period of 36 months before the date of transfer of asset could not alter the nature of gains earned by the assessee and the same remain Long Term Capital Gain in nature only. Ground Number-2 stand allowed. 8. In additional Ground of Appeal, the assessee is aggrieved by nonadjudication of VAT paid for Rs. 11.35 Lacs by Ld. CIT(A). The supporting documents, in this regard, have been placed on record. We find that this issue has not been considered even by Ld. AO. Therefore, the matter stand remitted back to the file of Ld. AO to consider this claim with a direction to the assessee to substantiate the same. This ground stand allowed for statistical purposes. It is also noted that the figures of stamp duty & Registration has wrongly been picked by Ld. AO as 18,32,137/- as against correct figures of Rs. 18,49,700/-. Therefore, Ld. AO is directed to pick up the correct figures and re-c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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