2014 (8) TMI 111

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....e property without appreciating the facts that the assessee became the owner of the property in the year 1999 after the death of her mother in 1999. (2) On the fact and in the circumstances of the case and in law the learned CIT(A) failed to appreciate the fact that explanation (iii) to section 48 clearly states that the cost inflation index shall be adopted from the first year in which the assets was held by assessee. (3) On the fact and in the circumstances of the case and in law the learned CIT(A) failed to appreciate the fact that the decision of special bench of ITAT in the case of Manjula J. Shah[35 SOT 105(Mum) SB) has not been accepted by the department. (4) The appellant prays that the order of the CIT(A) on the above ground be s....

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....case may be. This issue has been considered and decided by the Special Bench of this Tribunal in case of DCIT vs. Manjula J. Shah which has been upheld by the Hon'ble Jurisdictional High Court in (355 ITR 474) in para 18 to 19 and 22 as under :- "18. 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 prov....

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.... of acquisition and, accordingly, made liable for the long-term capital gains tax. Therefore, 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. .....22. Apart from the above, section 55(1)(b)(2)(ii) of the Act provides that where the capital asset became the property of the assessee by any of the modes specified under se....