The Income Tax Appellate Tribunal’s ruling in ITA No.2003/Del/2022 for the assessment year 2018-19 is an important case for understanding the application of indexation benefits under the Income Tax Act, 1961, especially concerning non-resident Indians. This document provides a detailed account of the proceedings, the tribunal’s observations, and the legal context in which this case was examined.
Bushra Javed, a non-resident Indian residing in London, filed an appeal against the decision of the Assistance Commissioner of Income Tax, Circle International Taxation-2(1)(2), regarding the disallowance of indexation benefits on capital gains. The controversy revolves around the correct application of indexation benefits on the cost of acquisition and improvement of property owned jointly with her husband.
The core issue was whether the indexation should be applied from the year of payment for the property or the year of registration. The tribunal examined extensive documentary evidence, including the tripartite agreement made in 2004, which indicated the joint ownership from the purchase date, contrary to the AO’s claim that the ownership started in 2010 based on the registration date.
The tribunal, after reviewing the arguments presented by both sides and the precedents set by higher courts, ruled in favor of Bushra Javed. It directed the AO to recompute the capital gains by applying the indexation benefits from the financial year 2004-05, acknowledging the payment and ownership from that year.
This ruling highlights the importance of factual accuracy in tax assessments and the need to adhere to legal precedents. It serves as a reference point for similar cases involving non-resident Indians and the interpretation of tax laws relating to capital gains and indexation benefits.
Legal Analysis: Bushra Javed vs. ACIT – Dispute Over Indexation Benefits in International Taxation
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