The Tax Publishers2020 TaxPub(DT) 4803 (Bang-Trib)

INCOME TAX ACT, 1961

Section 48

When an asset is acquired by way of inheritance under a gift or Will, indexed cost of acquisition has to be computed with reference to year in which previous owner first held asset, and not the year in which assessee became owner of asset.

Capital gains - Indexed cost of acquisition - Capital asset acquired by inheritance -

Assessee filed appeal against the order of CIT(A) not granting indexation benefit from the year in which property was acquired by the previous owner as the assessee got the property by way of gift. The benefit of indexation was granted only from the year in which the assessee got the property by way of gift. Held: The issue of allowing the benefit of indexation in a case where property is acquired by way of gift has been considered and decided in the case of CIT v. Manjula J. Shah [(2011) 355 ITR 474 (Bom) : 2011 TaxPub(DT) 2172 (Bom-HC)] wherein it was held that while computing capital gains arising on transfer of a capital asset acquired by assessee under a gift or will, indexed cost of acquisition has to be computed with reference to year in which previous owner first held asset and not year in which assessee became owner of asset. Following the same, benefit of indexed cost of acquisition has to be computed with reference to year in which previous owner first held asset, and not the year in which assessee became owner of asset.

Followed:CIT v. Manjula J. Shah [(2011) 355 ITR 474 (Bom-HC) : 2011 TaxPub(DT) 2172 (Bom-HC)].

REFERRED :

FAVOUR : In favour of assessee.

A.Y. : 2013-14



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