9911796707
TMI Blog2015 (6) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany. Therefore, we deem it fit and proper to restore ground to the file of the AO to make fresh assessment. Benefit of indexation in respect of computation of capital gains arising out of development of property devolved - Held that:- CIT(A) correctly allowed the claim of the assessee placing reliance in the case of DCIT vs. Manjula J. Shah [2009 (10) TMI 646 - ITAT MUMBAI] also confirmed in [2011 (10) TMI 406 - BOMBAY HIGH COURT] wherein held when the legislature by introducing the deeming fiction seeks to tax the gains arising on transfer of a capital asset acquired under a gift or Will and the capital gains under Section 48 of the Act has to be computed by applying the deemed fiction, it is not possible to accept the contention of revenue that the fiction contained in Explanation 1(i)(b) to Section 2(42A) of the Act cannot be applied in determining the indexed cost of acquisition under Section 48 of the Act. - Decided against revenue. - ITA NO.6987/Mum/2011 (A.Y.2008-09) - - - Dated:- 27-3-2015 - Shri D. Manmohan And Shri Sanjay Arora JJ. For the Appellant : Shri V.K. Bora For the Respondent : Shri Amar Gahlot ORDER Per Sanjay Arora, AM: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India Put Ltd is annexed herewith. You will observe that the interest earned ₹ 4189711- has been reimbursed to the company . Further submitted that in fact there is no advance given by the company to the director Shri Kishore Kumar Kataruka. To comply with the terms of margin money as stipulated as conditions of the credit limit sanction, the arrangement was with the said director in the interest of the company and the funds were kept in FDRs to earn more interest. In view of the above, there is no advance is given in terms of section 2(22)(e) of the I.T Act, 1961 . 2.1 The above explanation had been rejected by the AO relying on certain judicial precedents quoted vide para 5.3 of the assessment order and brought to tax a sum of ₹ 70,52,240/- as deemed dividend u/s.2(22)(e) of the Act. Further, the AO while computing the capital gains arising out of development of property devolved upon the assessee by virtue of will dated 20.8.1987 which has been probated by 3rd Additional District Sessions Judge, Patna on 6.12.1990, had not given the benefit of cost indexation, i.e., from the date from which the original owner acquired the property. 3. Aggrieved by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The AO brought this amount to tax by holding that the provisions of section 2(22)(e) should be construed strictly and the fact, that the loan was squared up during the year or subsequently, does not make any difference. Whereas the respondent assessee s submission was that the impugned amount was received by the assessee only for the benefit of the said company i.e. M/s. Fashion Exim Pvt. Ltd. and money was utilised solely for the purpose of company s business and, therefore, no benefit had accrued to the assessee as a result of this transaction. Therefore, the provisions of section 2(22)(e) cannot be applied. In support of this legal proposition he has relied upon certain judicial precedents which are as under :- i) Sunil Sethi vs. DCIT (2008) 26 SOT 95; ii) CIT vs. F. Praveen 220CTR 639 (Mad.); iii) ACIT vs. Sunil Chopra (2010) 2 ITR (Trib.) 469; iv) CIT vs. Raj Kumar (2009) 318 ITR 462; v) ACIT vs. Harshad V. Doshi (2011) 49 DTR 181 and vi) CIT vs. Creative Dyeing Printing (P) Ltd. (2009) (318 ITR 476) 5.1 On the other hand the ld. DR vehemently argued that the material on record does not support the contentions of the assessee and the CIT(A) was not jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 ITR 417) . We find that the said decision of the Special Bench of the Tribunal was affirmed by the Hon'ble Bombay High Court vide (2012) 204 Taxman 691/[2011] 16 taxmann.com 42(Bombay) .Vide para 17 to 18 of the judgment it was held as under:- 17. We see no merit in the above contention. As rightly contended by Mr. Rai, learned counsel for the assessee, the indexed cost of acquisition has to be determined with reference to the cost inflation index for the first year in which the capital asset was 'held by the assessee'. Since the expression 'held by the assessee' is not defined under Section 48 of the Act, that expression has to be understood as defined under Section 2 of the Act. Explanation 1(i)(b) to Section 2(42A) of the Act provides that in determining the period for which an asset is held by an assessee under a gift, the period for which the said asset was held by the previous owner shall be included. As the previous owner held the capital asset from 29/1/1993, as per Explanation 1(i)(b) to Section 2(42A) of the Act, the assessee is deemed to have held the capital asset from 29/1 / 1993. By reason of the deemed holding of the asset from 29/1 / 1993, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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