Indexation of inherent property

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This query is : Resolved

CA Atul Singhal (Querist)

11 December 2010 assessee inherent property from his father on his father's death in 1990. his father acquire the property in 1985.

Shall indexation benefit be available from 1990 or from 1985?

pls help

Bimal Thacker

Bimal Thacker (Expert)

11 December 2010 Indexation benefir will be from 1985

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

11 December 2010 Indexed cost of acquisition may be calculated with respect to the year 1990 in view of explanation (iii) to section 48 of the Income tax Act,1961.

CA Atul Singhal

CA Atul Singhal (Querist)

11 December 2010 thanks

Aditya Maheshwari

Aditya Maheshwari (Expert)

11 December 2010 1990

Bimal Thacker

Bimal Thacker (Expert)

13 December 2010 The decision of The DCIT, Mumbai Vs Manjula J. Shah (ITA no. 7315/Mumbai 2007) Mumbai ITAT Secial Bench, will help in this case for deciding the year
also following link will help some other discussion
https://www.bcasonline.org/articles/artin.asp?757

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

13 December 2010 Bimal Ji

Similar view is taken in Mrs. Pushpa Sofat vs ITO (2001) 81 (ITD) 1.

Since the section is very clear and against the cited decisions, I avoided the citations in my earlier reply.

CA Atul Singhal

CA Atul Singhal (Querist)

22 December 2010 thanks

CA Atul Singhal

CA Atul Singhal (Querist)

22 December 2010 Explanation (iii) to section 48 "Indexed cost of acquisition" means an amount which bears to the cost of acquisition the same proportion as Cost Inflation Index for the year in which the asset is TRANSFERRED bears to the Cost Inflation Index for the first year in which the asset was held by the assessee or for the year beginning on the 1st day of April, 1981, whichever is later;

CA Atul Singhal

CA Atul Singhal (Querist)

22 December 2010 first thing, inheritance is not transfer.

and second "Cost Inflation Index for the first year in which the asset was held by the assessee"
as per judgments as given above first year should be that year in which a person whether the assessee or the previous owner or again previous owner received that asset by way of TRANSFER, not by way of gift, inheritance etc.

CA Atul Singhal

CA Atul Singhal (Querist)

22 December 2010 we should look into the true intention of the law.
now the question is why this explanation is added to this section.