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2021 (8) TMI 27 - ITAT BANGALOREAddition of capital gain - cost of indexation - JDA property - Cost of the previous owner - agreement to sell the undivided share and also the agreement for determination of value of the property were executed on 09.06.2006 and the Appellant had constructive possession of the land from that date as contemplated u/s 53A of the Transfer of Property Act read with Section 2(47)(v) - contention of the assessee is that for the purpose of computation of capital gain, indexation of cost of acquisition is to be made from the date of incurring various payments for the purpose of acquisition of capital asset which is subject matter of charging of capital gain - lower authorities considered the date of registration of the property in favour of assessee i.e., 17.5.2010 and determined the capital gain - HELD THAT:- Section 49 deals with the cost with reference to certain modes of acquisition. One such mode is, if the assessee acquires a capital asset by way of succession, inheritance or devolution, then the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, as the case may be - when an asset is acquired by way of inheritance, the cost of acquisition of the asset should be calculated on the basis of the cost of acquisition by the previous owner and the said cost of acquisition of the previous owner has to be calculated on the basis of indexed cost of acquisition as provided in explanation (3) to Section 48. Though in the definition of 'indexed cost of acquisition', the word used are, "in which the asset was held by the assessee" a harmonious reading of Sections 48 and 49 makes it clear that, for the purpose of 'Indexed Cost of Acquisition', it has to be understood as the first year in which the previous owner held the said property. Otherwise, if the date of inheritance is taken into consideration, then the cost of acquisition of the asset on that date corresponding to the market value is to be taken into consideration. Otherwise, take the cost of acquisition on the day the previous owner acquired it and apply the "Indexed Cost of Acquisition" and then calculate the capital gains and the tax payable. Accordingly we direct the AO to recompute the cost of acquisition in the light of above discussion Disallowance of cost of improvement incurred by the assessee - lower authorities denied this claim of assessee towards improvement made to the interiors for which the assessee could not produce the requisite details of bills and vouchers - HELD THAT:- According to the ld. counsel for the assessee it was misplaced. Even before us the assessee has not produced an iota of evidence to suggest that the cost of improvement incurred on the interiors. In the absence of requisite details, we are not in a position to appreciate the argument of the assessee to allow such claim. Therefore, this ground of the assessee is dismissed.
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