2023 (7) TMI 749 - AT - Income Tax

LTCG - Determination of base year from which the benefit of indexation would be available - AO held that the assessee acquired the rights in the property only from the date of settlement and therefore, indexation benefit would be available only from financial year 2014-15 - assessee claimed indexation of cost from financial year 2001- 02 - CIT(A) allowed the claim in terms of cited decision of Saroja Naidu 2021 (7) TMI 989 - MADRAS HIGH COURT - HELD THAT - We find that the adjudication in the impugned order follows binding judicial precedent of jurisdictional High Court. The revenue could not controvert this position. Therefore, we do not find any fault in the impugned order. Decided against revenue.

Summary

Issues involved: Determination of base year for indexation benefit.

Summary:

Issue 1: Determination of base year for indexation benefit
The appeal concerned the base year for indexation benefit on the sale of a property. The assessee claimed indexation from the financial year 2001-02, resulting in a capital loss of Rs. 48.35 Lacs. However, the Assessing Officer (AO) held that indexation should start from the financial year 2014-15, as the assessee acquired rights in the property only from the date of settlement in 2015. The AO recalculated the gains at Rs. 210.09 Lacs. The Commissioner of Income Tax (Appeals) allowed the claim based on a decision of the High Court of Madras. The revenue appealed this decision.

The Tribunal noted that the AO's decision was based on the date of settlement, while the assessee relied on the High Court's ruling. The Tribunal found that the impugned order followed the binding judicial precedent of the High Court, and the revenue failed to challenge this position. Consequently, the Tribunal upheld the decision of the Commissioner of Income Tax (Appeals) and dismissed the appeal.

The appellate tribunal concluded the matter by dismissing the appeal on the grounds discussed above.

Order pronounced on 17th July, 2023.