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TMI Blog2018 (1) TMI 1307X X X X Extracts X X X X X X X X Extracts X X X X ..... ial question of law: "Whether the Appellate Tribunal is correct in law and on facts in accepting the cost Inflation Index taken by the assessee of the year in which the father of the assessee became the owner irrespective of the fact that the property in question was transferred in favour of assessee after the death of his father through inheritance?" 2. The assessment year is 2006-07 and the relevant accounting period is 01.04.2005 to 31.03.2006. 3. The assessee inherited a capital asset being Bungalow No.22, Shrimali Society, Navrangpura, Ahmedabad, by virtue of a will on 08.03.2004. The property devolved upon him in his capacity of sole beneficiary of his late father. The assessee sold the capital asset on 23.01.2006 for Rs. 2,20,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , inheritance or devolution, cost of acquisition thereof shall be deemed to be the cost for which the previous owner of the property had acquired the same. 6. Mrs. Mauna Bhatt, learned senior standing counsel for the appellant, assailed the impugned order on the grounds set out in the memorandum of appeal and the reasoning adopted by the Assessing Officer. 7. The facts are not in dispute. The respondent assessee inherited the property in question from his father by virtue of a will. Subsequently, he sold the property for a consideration of Rs. 2,20,00,000/by taking indexation of cost of acquisition for the year 1981 for the purpose of computing long term capital gain. According to the respondents, since the assessee acquired the property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emed 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. Explanation.-In this subsection the expression "previous owner of the property" in relation to any capital asset owned by an assessee means the last previous owner of the capital asset who acquired it by a mode of acquisition other than that referred to in clause (i) or clause (ii) or clause (iii) or clause (iv) of this subsection." 9. Thus, subsection (1) of section 49 of the Act inter alia, lays down that where the capital asset became the property of the assessee under a gift or a will; by succession, inheritance or devolut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present purpose defines "indexed cost of acquisition" to mean an amount which bears to the cost of acquisition the same proportion as Cost Inflation Index for the year in which the asset is transferred bears to the Cost Inflation Index for the first year in which the asset was held by the assessee or for the year beginning on the 1st day of April, 1981, whichever is later. In view of the provisions of subsection (1) of section 49 of the Act read with the Explanation thereto, since the capital asset has become the property of the assessee under a will, the cost of acquisition is deemed to be the cost for which the previous owner, namely the assessee's father, acquired it. The record of the case shows that the property was acquired by the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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