Capital gain for property received as gift

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MANAS BAPAT (Querist)

12 December 2010 I have a client who had received a Flat/ Apartment as gift from her father in 1999. She has sold that flat recently.
Now to calculate the cost of acquisition for the purpose of Capital Gain I have to calculate the cost to the previous owner.
The previous owner (her Father) had bought the peace of land (on which the flat is now constructed) before 1981 the cost for the plot is unknown. He later entered into an contract with a builder to redevelop this land into a building. Of this building of 10 flats, the builder gave away 4 flats to the clients father by way of payment/ consideration for the plot of land for redevelopment. Out of those 4 flats one was received by my client.
My question is that how should the cost to previous owner be calculated?
The original land was bought many years ago. And the cost of building the 4 flats was in exchange on the land that he gave away for redevelopment.
Please suggest me any case laws ans solution for this problem

Deepak Gupta

Deepak Gupta (Expert)

12 December 2010 Cost of Land: Since the land was purchased before 01.04.1981, you have to determine the fair market value as on that date. for this purpose, you may take help of a registered valuer. municipal value at that time may also be considered.

Sale Consideration: Current Market value of the 4 flats or municipal value whichever is higher shall be considered as the sale consideration of the property.

At the same time the assessee can avail the benefit of section 54F.

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