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TMI Blog2012 (4) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... , the activity of sale of old ships cannot be regarded as an activity from operating qualifying ships - against assessee. income from sale of ship is not a capital receipt which has to be included while computing the book profit u/s 115JB as per decision of ITAT Mumbai Bench in the case of ITO v. Frigsales (India) Ltd. [2005] 4 SOT 376 (MUM)." - assessee submitted that profits on a sale of old ship are nothing but a capital receipt in the hands of the assessee and since the profit from such sale is chargeable to tax as capital gains u/s 50, the provisions of section 115JB are not attracted to such profit – revenue contented that what is to be excluded for the purpose of computing book profit u/s 115JB has been specifically provided in Explanation 1 to section 115JB(2) and the same does not cover capital gain or capital receipt relied on the decision of Hyderabad Special Bench of the Tribunal in the case of Rain Commodities Ltd. v. Dy. CIT- 2010 - TMI - 203366 - ITAT HYDERABAD – Held that:- the decision of Special Bench of the Tribunal at Hyderabad in the case of Rain Commodities Ltd. (supra) that the provisions of section 115JB have an overriding effect upon other provisions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue reads as under :- 1. On the facts and in the circumstances of the case, the order of the CIT(A) is contrary to the facts and law. 2. On the facts and in the circumstances of the case the Ld. CIT(A) erred in Law in deleting the addition of Rs.24,20,100/- made by the Assessing Officer on account of Long Term Capital Gain relying on the decision of Mumbai Bench in the case of Smt. Manjula J. Shah particularly when prima facie it is not acceptable and the statute does not permit for taking the year of indexation even prior to date on which it has been actually transferred in the name of assessee and no explanation was filed by the assessee before the Assessing Officer. 3. On the facts and in the circumstances of the case the Ld. CIT(A) erred in Law in deleting the addition of Rs.24,20,100/- made by Assessing Officer on account of Long Term Capital Gain, although the year of indexation is rightly taken by the AO in view of section 48 and Section 55 of IT Act i.e. the year in which the property was first acquired by the assessee. 4. On the facts and in the circumstances of the case the Ld. CIT(A) erred in Law in deleting the addition of Rs.26,35,000/- made by A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has sold property situated at 3, Mahesh Nagar, Street No.3, Indore, for Rs. 31 lacs on 19.9.2007. The property was received by assessee on account of partition of HUF on 02.04.2007, the copy of partition deed is submitted. No registered document was effected for transfer of property in the name of assessee. This property was sold by Karta with consent of assessee on 19.09.2007. The assessee has disclosed long term loss of Rs. (-) 646249/- in the property. The long term capital loss is worked out by working the acquisition cost of property as on 1.4.1981 at Rs. 6,79,900/- with respect to indexation cost applicable for the year 1281-82. With regard to value taken as on 1.4.1981, the assessee has submitted valuation report of Authorized Valuer which is placed on record. 9. As per the Assessing Officer, the property was acquired by the assessee in the year itself and was held for only few months, therefore, after applying Explanation 3 below Section 48 held that cost of indexation is to be worked out with respect to the amount, which bears the cost of acquisition, the same proportion as cost of inflation index for the year in which assets transferred bears to the cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by the decision of the I.T.A.T. Special Bench in the case of Dy. CIT v. Manjula J. Shah [2010] 35 SOT 105/126 TTJ 145 (Mum.)(SB), wherein it was held that for the purpose of computing long term capital gain arising from transfer of capital assets, which had become property of the assessee under a Gift, the first year in which the capital asset was held by the assessee has to be determined to work out the index cost of acquisition as envisaged in Explanation (iii) to Section 48 after taking into account the period for which the said capital asset was held by the previous owner i.e. index cost of acquisition of such capital asset has to be computed with reference to the year in which the previous owner first held the assets. It was also observed that when the cost of acquisition of the previous owner as on the date of acquisition of capital assets by him is to be adopted as cost of acquisition to the assessee even for the purpose of working out index cost of acquisition as per the meaning given in Explanation (iii) to Section 48, it does not sound logical to adopt the cost of inflation index for the year in which the capital asset became the property of the assessee and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computing the long term capital gain and also deposited in her bank account. We, therefore, do not find any infirmity in the order of CIT(A) for deleting the addition made by the Assessing Officer on account of amount deposited in her bank account in respect of sale proceeds of House property. 19. The assessee is aggrieved by action of Assessing Officer for not accepting capital gain shown on sale of gold jewellery amounting to Rs. 17,22,750/-. 20. Facts of the case are that the assessee is 70 years old lady belongs to Maheshwari community was in respect of jewellery and ornaments since her birth and at the time of her marriage 40 years back from her parents as well as from in laws and marriage of her children. As the jewellery was received as a gift without incurring any cost, the same was not reflected by the assessee in her balance sheet. However, the assessee has filed wealth tax return for the assessment year 2006-07, wherein value of the jewellery received in gift as well as self acquired jewellery was shown as per Schedule III. During the year under consideration, the assessee has sold the jewellery which was acquired as gift since long back. After claiming indexatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the balance sheet was not effected. Thus, the objection of the Assessing Officer to the effect that since there was no reduction in the value of jewellery shown in the balance sheet, the sale of such jewellery cannot be accepted, does not have much substance. On going through the wealth tax return filed by the assessee, which was reproduced by the ld.CIT(A) in his appellate order, it is clear that the value of gold jewellery and silver article as reflected in the wealth tax return includes the value of the gold jewellery received as gift by the assessee. We also found that wealth tax value of gold jewellery and silver articles in assessment year 2007-08 was Rs. 23,77,046/- and Rs. 3,18,499/- respectively, which gets reduced to Rs. 13,37,287/- and Rs. Nil respectively in the assessment year 2008-09 and the said reduction was shown in the wealth tax return in the assessment year 2008-09 on account of sale of jewellery and silver articles received in gift. We also found that in assessment year 2007-08 though the book value of the silver article is taken at Nil, the wealth tax value thereof is taken at Rs. 2,18,449/-, which also substantiate the claim of assessee that the silver articl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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