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2014 (12) TMI 129 - AT - Income TaxIndexed Cost of Acquisition - assessee had acquired the asset from her late father - Held that:- Following the decision in Commissioner of Income-tax Versus Manjula J. Shah [2011 (10) TMI 406 - BOMBAY HIGH COURT] - indexed cost of acquisition as envisaged in Explanation (iii) to section 48, has to be reckoned from the year in which previous owner acquired the asset and not from the year in which the assessee had acquired - Therefore, in this case the cost of acquisition has to be taken from 1st April 1981 as the previous owner had acquired the asset much prior to it i.e., on 28th December 1966 – thus, the order of the CIT(A) is upheld – Decided against revenue. Cost of acquisition of capital asset u/s 55(2) – Held that:- Both the Revenue authorities have held that cost of acquisition should be taken on the value on which it was acquired by the previous owner that is at 3.50 lakhs, on 28th December 1966 - the subject matter of sale is lease hold rights - the property has become the capital asset of the assessee by way of Will, therefore, cost of acquisition as prescribed in section 55(2)(a)(ii) will not be applicable – thus, the cost of acquisition has to be worked out as per clause (b) of section 55(2), which provides that it is the option of the assessee if the property has been acquired by the assessee before 1st April 1981 to adopt the fair market value as on 1st April 1981 - the assessee has opted to fair market value as on 1st April 1981, and therefore, the assessee has rightly adopted the fair market value of the asset as on 1st April 1981 – thus, the order of the CIT(A) is set aside and the AO is directed to take the fair market value as adopted by the assessee as on 1st April 1981 for the purpose of cost of acquisition – Decided in favour of assessee. Claim made u/s 54F disallowed - acquisition of another residential house - Held that:- The assessee has claimed the deduction u/s 54F on account of long term capital gain, arising out of sale of lease right of the property - The capital gain arising out of transfer of such a long term capital asset was utilized for purchasing of a residential flat at Forest Castles, Mundhawa, Pune - the assessee has also purchased two adjacent flats in a different locality and in a different building called as Water Front - sub–clause (ii) of clause (a) clearly provides that when the assessee has purchased any residential house other than the new residential house within a period of one year after the date of transfer, then the assessee shall not be eligible for claim of deduction u/s 54F - there is a clear violation of conditions laid down in proviso to section 54F(1), therefore, the AO as well as the CIT(A) have rightly denied the assessee’s claim of deduction – thus, the order of the CIT(A) is upheld – Decided against assessee.
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