ACIT v. Rajiv Khosla

INCOME TAX ACT, 1961

--Capital gains--Cost of acquisition Property acquired through Will--Determination of indexed cost of acquisition--Indexed cost of acquisition of the capital asset acquired by assessee through inheritance has to be computed with reference to the year in which the previous owner first held the asset.--AO noticed that assessee had taken fair market value as on 1-4-1981. Assessee had acquired property through Will and testament dated 5-7-2007 from his mother on her death. AO pointed out that in such case the cost of acquisition would be cost of acquisition to previous owner. It was option for assessee to take the value of said property to previous owner or fair market value as on 1-4-1981, which was beneficial to assessee. Assessee had adopted cost of inflation index to compute capital gain for 1981-82, whereas property was inherited by him on death of her mother on 13-12-2006. AO opined that since assessee had first held the property on 13-12-2006, the index cost should be computed by applying cost inflation index for financial year 2006-07. Held: Index cost of acquisition of the capital asset acquired by the assessee through inheritance has to be computed with reference to the year in which the previous owner first held the property was concurred.