Tribunal grants indexation benefit to assessees for property sold, citing Assessing Officer's inconsistency. -12

The tribunal allowed the appeals of the assessees, directing the Assessing Officer to grant the benefit of indexation and the cost of construction incurred by the assessees' mother for the property sold during the assessment year 2011-12. The decision was based on the inconsistency in treatment by the Assessing Officer and the full disclosure of investments in the property by the mother in her returns.

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Issues: Appeal against separate orders of the Commissioner of Income-tax (Appeals) regarding cost inflation index and cost of acquisition for a property sold during the assessment year 2011-12.

Analysis:
1. Issue of Cost Inflation Index and Cost of Acquisition: The appeal involved the dispute over the allowance of the cost inflation index and the cost of acquisition for a property sold during the assessment year 2011-12. The assessee, represented by Mr. U. Mohamed Khailullah, claimed that the mother of the assessees had purchased a property in 1988 and incurred significant expenditure on reconstruction between 2007 and 2010. The Assessing Officer did not allow the cost inflation index, citing lack of documentary evidence. However, the ld. CIT(A) allowed indexation from the assessment year 1988-89 but did not allow the cost of acquisition for the re-constructed building. The appellant highlighted that the same Assessing Officer had accepted indexation and cost of construction for another sister in a previous assessment year, indicating inconsistency in treatment. The tribunal noted that the investments in the property were fully disclosed by the mother in her returns, and as the cost of construction had been accepted for another sister, directed the Assessing Officer to grant the benefit of indexation and cost of construction for the property sold, when computing long-term capital gains.

2. Decision and Outcome: After considering the submissions from both parties, the tribunal allowed the appeals of the assessees, Mrs. Fathima Fahima, and Mrs. Fathima Fahrhna. The tribunal pronounced the order in the open court, directing the Assessing Officer to grant the benefit of indexation and the cost of construction incurred by the assessees' mother for the property sold during the assessment year 2011-12. The decision was based on the inconsistency in treatment by the Assessing Officer and the full disclosure of investments in the property by the mother in her returns.

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