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Revenue's Appeal Dismissed: Indexation Benefits Upheld Despite Pending SLP. Precedent's Binding Force. The appeal by the revenue challenging the indexed cost of acquisition for LTCG was dismissed. The Ld. CIT(A) upheld the assessee's claim for indexation ...
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The appeal by the revenue challenging the indexed cost of acquisition for LTCG was dismissed. The Ld. CIT(A) upheld the assessee's claim for indexation benefits based on a judgment of the Bombay High Court, despite a pending SLP before the Supreme Court. The Supreme Court's dismissal of the department's SLP against the High Court's judgment confirmed the reliance on the precedent. The decision emphasizes the binding nature of judicial pronouncements until overruled by higher authorities.
Issues: 1. Assessment of indexed cost of acquisition for computation of LTCG. 2. Reliance on a judgment of Bombay High Court when the SLP is pending before the Supreme Court.
Analysis:
Issue 1: Assessment of indexed cost of acquisition for computation of LTCG The appeal by the revenue for Assessment Year 2014-15 challenges the order of the Ld. Commissioner of Income-Tax (Appeals)-56, Mumbai, regarding the indexed cost of acquisition. The assessee, a resident individual, sold inherited immovable property purchased by the parents before 01/04/1981. The assessee claimed indexation benefits from FY 1981-82, but the Ld. AO denied it due to the pending Special Leave Petition filed by the department against a judgment of the Bombay High Court. The Ld. CIT(A) reversed the AO's decision, citing the binding nature of the judicial pronouncement. The revenue appealed the decision.
Issue 2: Reliance on a judgment of Bombay High Court when the SLP is pending before the Supreme Court The revenue contested the Ld. CIT(A)'s reliance on the judgment of the Bombay High Court in the case of Manjula Shah Vs. DCIT, despite the pending Special Leave Petition before the Supreme Court. However, it was noted that the department's Special Leave Petition against the said judgment was dismissed by the Supreme Court on 18/09/2018 (SLP No. 19924/2012). Consequently, the impugned order was upheld, and the appeal was dismissed.
This judgment highlights the significance of judicial precedents and the impact of pending Special Leave Petitions on the applicability of such precedents in tax assessments. The decision underscores the importance of following binding judicial pronouncements until they are overruled or set aside by higher authorities.
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