Skip to main content

Period of holding of inherited property to include duration of possession of asset by previous owner

IT : In computing long term capital gains on sale of inherited asset, indexed cost of acquisition is to be computed with reference to year first held by previous owne
HIGH COURT OF GUJARAT
Commissioner of Income-tax -I
v.
Gautam Manubhai Amin
Section 48, read with section 49, of the Income-tax Act, 1961 - Capital gains - Computation of [Inherited property] - Assessment year 2006-07 - Whether for purpose of computing long-term capital gains in hands of an assessee who has acquired an asset under inheritance, indexed cost of acquisition of such capital asset is to be computed with reference to year in which previous owner first held said asset - Held, yes [Para 7] [In favour of assessee]
FACTS
 
■ The assessee inherited property along with his brother on the demise of their father on 23-12-1998. The property was sold for a consideration of Rs. 3.35 crores. The assessee calculated his share of capital gain at Rs. 21,24,438 taking the benefit of "Cost Inflation Index" as per the base year 1981-82.
■ The Assessing Officer passed an order of assessment considering "Cost Inflation Index" as per the Financial Year 1998-99 on the ground that property had been acquired by the assessee on 23-12-1998. On appeal, Commissioner (Appeals) held that the "Cost Inflation Index" was to be taken with reference to 1-4-1981.
■ On appeal, the Tribunal confirmed the order passed by the Commissioner (Appeals).
■ On Revenue's Appeal:
HELD
 
■ The issue involved is squarely covered by the decision of this Court in the case of B.N. Vyas v. CIT [1986] 159 ITR 141/25 Taxman 133 and the decision of the Bombay High Court in the case of CIT v. Manjula J. Shah [2012] 204 Taxman 691/16 taxmann.com 42 (Bom.) wherein it has been held that for the purpose of computation of long term capital gain, the indexed cost of acquisition has to be computed with reference to the year in which the previous owner first held the asset and not the year in which the assessee became the owner of the asset. [Para 7]
■ In view of the above, no error has been committed by the Tribunal in dismissing the appeal preferred by the revenue and confirming the order passed by Commissioner (Appeals) allowing the indexed cost of acquisition from the base year, i.e., from 1-4-1981 and thereby deleting the addition of Rs. 1,00,76,878 on account of long term capital gain. [Para 8]

Article referred : http://chartered-aaccountant-finance.blogspot.in/2013/10/aaykarbhavan-period-of-holding-of.html

Comments

Post a Comment

Most viewed this month

Amendment of plaint under Order VI Rule 17 of the CPC explained

Cause Title :  Ganesh Prasad vs Rajeshwar Prasad, SLP (C) NO. 28377 OF 2018, Supreme Court Of India Date of Judgment/Order : 14/3/2023 Corum : J. B. Pardiwala, J. Citied:  Revajeetu Builders and Developers v. Narayanaswamy & Sons and Others reported in (2009) 10 SCC 84 North Eastern Railway Administration, Gorakhpur v. Bhagwan Das reported in (2008) 8 SCC 511 P.A. Jayalakshmi v. H. Saradha and Others reported in (2009) 14 SCC 525 B.K. Narayana Pillai v. Parameswaran Pillai and Another reported in (2000) 1 SCC 712 A.K. Gupta and Sons Ltd. v. Damodar Valley Corporation reported in AIR 1967 SC 96 Life Insurance Corporation of India v. Sanjeev Builders Private Limited and Another, Civil Appeal No. 5909 of 2022 dated 01.09.2022 Firm Sriniwas Ram Kumar v. Mahabir Prasad and Others reported in AIR 1951 SC 177 G. Nagamma and Another v. Siromanamma and Another reported in (1996) 2 SCC 25 Praful Manohar Rele v. Krishnabai Narayan Ghosalkar and Others reported in (2014...
Post a Comment
Read more

Owner of vehicle is not expected to verify the genuineness of the driving license before appointing a driver

Cause Title : Rishi Pal Singh Versus New India Assurance Co. Ltd & Ors., Civil Appeal No. 4919 Of 2022, The Supreme Court Of India Date of Judgment/Order : July 26, 2022 Corum : Hemant Gupta; J., Vikram Nath; J. Background the truck owned by the appellant met with an accident. The owner deposed before the court that before employing the driver, he had taken his driving test and that he was driving the vehicle satisfactorily and  that the driver was employed with him for 3 years before the date of the accident. He produced his driving license. This was reaffirmed by the driver who deposed that the driving license was obtained from the driver and it was issued from Nagaland, but no such license was produced on record. Both the Motor Accident Claims Tribunal and the High Court have held that the owner has alleged that the driver had a driving license from Nagaland but the same was not produced and therefore, the Insurance Company is entitled to recover the awarded amount...
Post a Comment
Read more

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more