Capital gains - cost of acquisition

Mr. Ramaswamy has exchanged his property X for Property Z of Mr. Johnson.  Now Mr. Ramaswamy is selling property Z. 

I have found the cost of acquisition for such instances explained as : "Where the asset was acquired by way of exchange for another asset, the cost of acquisition is the Fair Market Value of that other asset as on the date of exchange"

Can you clarify which property's cost of acquisition has to be considered, whether property X / property Z?

Also under which section / notification / circular to substantiate this?

 

Replies (1)

In general, the cost of property is remains same, in case of exchange.

If any difference specifically mentioned in the exchange deed, the cost of aquisition of original asset (here X) is taken for consideration, reduced by any consideration received by cash/credit at time of exchange, if any. 

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