TaxTMI 
TaxTMI 
2012 (4) TMI 215
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....buyer. (c) Wealth tax returns were also submitted by the appellant for A. Y. 2007-08 & 2008-09 declaring such ornaments. (d) The jewellery and ornaments reflected in the Balance sheet need not to be reduced because the gold ornaments acquired at the time of marriage (40 years ago) having no cost to the appellant, hence the same was not reflected in the Balance sheet. Addition of Rs.17,22,750/- u/s 69 of the Act and its confirmation as alleged unexplained deposit in bank account is wholly unjustified, improper, bad In law and deserves to be set aside.' (2) Without prejudice to above, the learned Commissioner of Income tax (A) confirmed the addition on the presumption for such amount might have been received additionally from sale proceeds of residential house. Presuming but not admitting the conclusion so drawn, the benefit of indexation should have been allowed while considering the same as sale proceeds of house instead of ornaments. Additions u/s 69 of the Act is, therefore, unjustified and bad in law. 3. Grounds taken by the Revenue reads as under :- 1. On the facts and in the circumstances of the case, the order of the CIT(A) is contrary to t....
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....ed addition of Rs. 26,35,000/- made by the Assessing Officer in respect of sale proceeds of house property deposited in Bank account of assessee by treating the same as unexplained deposit in Bank u/s 69 of the Act. 6. Against the above order of CIT(A), both the assessee and Revenue are in appeal before us. 7. First we take ground raised by the Revenue in its appeal with regard to allowing claim of indexation u/s 49 of the Income-tax Act, 1961. 8. Facts of the case are that the assessee has acquired a house property on the partition of HUF. As the house property was acquired by HUF prior to 1.4.1981, the assessee has taken benefit of claim of indexation from 1.4.1981. However, the Assessing Officer was of the view that the assessee has acquired the house property on the date of partition i.e. on 2.4.2007, therefore, the profit on sale of house property was short term capital gain and no indexation was allowed with respect to increase in its cost since 1st April, 1981. In this regard, the Assessing Officer observed that 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....
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....red by the previous owner is also eligible for indexation. If we accept the reasoning given by the Assessing Officer, clause (iii) of Explanation to Section 48, it would lead to such working of index cost of acquisition, which is totally illogical and unreasonable. For example, where capital asset has become property of the assessee under a gift prior to cut off date of 1st April, 1981, but the same is transferred by him only after 1st April 1981, i.e. in financial year 1987-88. The year to be adopted for indexation as per the Assessing Officer would be financial year 19887-88. However, the cost of acquisition of capital in such case would be taken as fair market value on 1st April, 1981, being the cut off date embedded in the indexation scheme. Thus, a situation will arise, where the cost of acquisition of capital would be taken a 1st April, 1981, whereas the cost of inflation index for the year 1987-88 would be applied to the said cost to work out the indexed cost of acquisition. 13. The issue is also covered 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 o....
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....and parcel of the sale consideration so received by the assessee, which has been duly offered for taxation and such amount being not a loan received by the assessee from Life Insurance Housing Finance Limited. 18. We have considered the rival submissions and found from record that the assessee has sold her house for Rs. 31 lacs and deposited the sale consideration of house property in her bank account. As the buyer who has purchased the houses from the assessee, has got finance of Rs. 26,35,000 from the Life Insurance Housing Finance Limited, cheque of Rs. 26,35,000/- was issued by Life Insurance Housing Finance Limited in favour of the assessee, which was deposited by her in her bank account. The Housing loan was not availed by the assessee but it was availed by the buyer of the house, therefore, the assessee cannot be asked for the loan sanctioned by Life Insurance Housing Finance Limited. Whatever sale consideration was received by the assessee, was duly accounted for as income, while 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....
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....e/Cost Whether an asset liable to W. T. u/s 2(ea) Value as per Schedule III Nature of asset Bank Value/Cost Whether an asset liable to W. T. u/s 2(ea) Value as per Schedule III Gold & jewellery 4,58,500 Yes 23,77,046 Gold & jewellery 5,78,500 Yes 13,37,287 Silver Utensils & articles Nil Yes 3,18,449 Silver Utensils & articles Nil -- Nil 22. As the said jewellery was received by the assessee at the time of her marriage 40 years back from her mother-in-law and mother, the cost thereof in the hands of the assessee was Nil and the same was not appearing in her balance sheet. However, whatever jewellery was acquired by the assessee herself by paying consideration was duly reflected in her balance sheet. Since the assessee had only sold the jewellery received in gift, the value of self acquired jewellery as shown in 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.CI....