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2012 (3) TMI 190 - AT - Income TaxLTCG - exemption u/s 54 - the property was inherited, the assessee took the cost of acquisition as fair market value of the asset as on 1.4.1981 and claimed benefit of indexation from Year 1981 - AO reworked the cost of acquisition by applying cost indexation from the year 1994 when the property was actually passed to him - assessee invested the sale consideration in his new residential house - AO stated that the sale consideration had not been deposited in capital gain account scheme before the due date specified for filing of return of income, which was 31st July, 2008 - the assessee contented when a capital asset is acquired by an assessee by gift, inheritance, partition of an HUF, or other specified mode, the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner acquired. Held that:- the assessee became owner of the property on the death of his wife who acquired property from her mother - Under sec. 49(1) where the capital asset becomes the property of the assessee under the modes specified therein, the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it - cost of indexation has to be with effect from 1.4.1981, the date on which the cost of acquisition was taken in the hands of the previous owner - the assessee could have furnished the return of income under sec. 139(4) for any previous year at any time before the expiry of one year from the end of the relevant assessment year. The requirement of sec. 54 for exemption of capital gains could be fulfilled within the time limit of sec. 139(4) and not under sec. 139(1) - assessee was entitled to exemption under sec. 54 for investment of capital gains in new residential house.
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