TMI Blog2014 (10) TMI 888X X X X Extracts X X X X X X X X Extracts X X X X ..... ls his immovable property which is acquired under gift or will, while computing the capital gain the index cost of acquisition has to be computed with reference to the year in which previous owner first held the asset and not the year in which the assessee became the owner of the asset. Therefore, the ratio of this decision is squarely applicable to the facts of the present case of the assessee. Thus we direct the AO to allow the cost inflation indexation to the assessee from 01.04.1981 for computation of capital gains. - Decided in favour of assessee - I.T.A.No.1998/Mds/2014 - - - Dated:- 30-10-2014 - Shri A. Mohan Alankamony, Accountant Member Shri V. Durga Rao, Judicial Member For the Appellant : Shri s. Das Gupta, JCIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to the cost inflation index application for 1981-82. In addition, various costs of improvements stated to be incurred by the previous owner, had also been claimed. According to the Assessing Officer, indexation of cost of acquisition will have to be calculated from the financial year 2005-06 and called assessee s explanation. It was submitted by the assessee before the Assessing Officer that Section 49(1) of the Income-tax Act provides that where the capital asset has been acquired by the taxpayer in any of the modes such as on partition of a Hindu Undivided Family or under Gift or Will or by succession or inheritance, etc., the cost to the previous owner shall be deemed to be the cost of acquisition of the taxpayer. Similarly, sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als) directed the Assessing Officer to adopt 100 as the denominator and calculate the capital gains. 5. On being aggrieved, the Revenue is in appeal before the Tribunal. 6. The ld. DR relied on the order passed by the Assessing Officer. 7. The ld. Counsel for the assessee relied on the order passed by the ld. CIT(Appeals) and also the decision in the case of CIT v. Manjula J. Shah [2013] 355 ITR 474 (Bom). 8. We have heard both sides, perused the materials on record and gone through the orders of authorities below. The only issue involved in this appeal is whether the index cost for acquisition is applicable for 1981-82 or financial year 2005-06 in which the property was inherited by the assessee. The ld. CIT(Appeals), by follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determining the period for which an asset is held by an assessee under a gift, the period for which the said asset was held by the previous owner shall be included. As the previous owner held the capital asset from 29th Jan., 1993, as per Expln. 1(i)(b) to s. 2(42A), the assessee is deemed to have held the capital asset from 29th Jan., 1993. By reason of the deemed holding of the asset from 29th Jan., 1993, the assessee is deemed to have held the asset as a long-term capital asset. If the long term capital gains liability has to be computed under s. 48 by treating that the assessee held the capital asset from 29th Jan., 1993, then, naturally in determining the indexed cost of acquisition under s. 48, the assessee must be treated to have he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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