12 September 2010
1. Yes ,will be counted by virtue of explanation to section 49(1) of the Income tax Act,1961. 2. No, by virtue of section 55(1)(b)(2)(ii) read with explanation to section 49(1) of the said act.
the second point is clear to me, as cost of improvement incurred by the previous owner shall be included as per section 55(1)(b)(2)(ii), and as per explanation to section 49(1) previous owner means last previous owner of the property who acquired it otherwise than modes referred to in section 49(1).... So Mr. B is not previous owner for this purpose.
But for first point, i have doubt. As per explanation 1(i)(b) of section 2(42A), the period of holding includes the period of holding by the previous owner.... So, for this purpose also, the period of holding by Mr. B should be excluded...
CAclubindia
