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2017 (8) TMI 524 - ITAT MUMBAIRe-computation of capital gains - inheritance of property - adopting year for the indexed cost of acquisition of the capital asset - reference to the year in which the previous owner first held the assessee and not the first year in which the asset was held by the assessee - Held that:- This issue is squarely covered in favor of the appellant by the decision of Bombay High Court in the case of Mainjula. J Shah (2011 (10) TMI 406 - BOMBAY HIGH COURT) held that the benefit of indexation shall be available from the year when previous owner first acquired it. If expression "held by assessee" interpreted differently to give benefit of indexation from the period when assessee acquired it, would defeat the purpose of statute. If the object of the legislature is to tax the gains arising on transfer of a capital acquired under a gift or will by including the period for which the said asset was held by the previous owner in determining the period for which the said asset was held by the assessee, then that object cannot be defeated by excluding the period for which the said asset was held by the previous owner while determining the indexed cost of acquisition of that asset to the assessee. AO is directed to re-compute the capital gains by adopting year for the indexed cost of acquisition of the capital asset in question with reference to the year in which the previous owner first held the asset. In other words, in the formula for calculation of indexed cot of acquisition of the property, the denominator has to be taken as 100 i.e. cost inflation index of the year 1981-82 as against 480 considered by the Assessing Officer. Appeal filed by the Revenue is dismissed.
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