Capital Gain - Indexed Cost of Acquation

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Akhil (Querist)
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13 January 2010 In case of transaction which are covered U/s 49(1), i.e. gift

if my parents gifted me a land on 1.1.2000 which they purchased on 1.1.1980, for Rs. 100000. (FMV on 1/4/1981 is 150000)

I sold that land on 1.1.2010 for Rs. 1000000

as per my point view i ll claim indexation from the date when asset was first held by me. i.e. 1.1.2000

but as per Vinod Gupta book of CA Final he claimed indexation from 1.1.1990.

what is correct method and valid for CA Final exams.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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13 January 2010 As per explanation (iii) to section 48, the view taken by you is correct. But there is a tribunal decision in support of Mr. Vinod Gupta's view to which I ,personally, will not agree since the act is very clear on the issue.

Ratan Sharma

Ratan Sharma (Expert)
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13 January 2010 cost to the previous owner will be your cost but the benefit of indexation will be available from the year in which you become the owner i.e. 2000-2001. Your view is correct.

Bhavesh

Bhavesh (Expert)
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13 January 2010 Manjula Shah judgment of the Special Bench of mumbai Tribunal in 318 ITR has clarified the issue.

My personal view is also the same. I believe that the act says clearly that the cost of indexation is the first year in which the asset was HELD by the assessee.

and the holding period clearly includes the period of the previous year.

You will get indexation benefits from the year in which the previous year first held the asset i.e. 1990.

See also other fav cases
1. Minu Devgan (kolkatta Tribunal)
2. Meera Khera (Mumbai Tribunal)
3. Pushpa Sofat (Chandigarh Tribunal) 81 ITD 1

Akhil

Akhil (Querist)
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14 January 2010 that i agree, wording of act and wording of tribunal decision are contradictory.

but by what opinioun i should answer in exam. taking index cost from the date when assessee 1st hold the asset or taking index cost from previous owner hold asset.

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