Capital Gains

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Mohan A

CA Final

179 Points Posted on 02 February 2010

In case of gifted Assets, indexation benefit is available from the year of acquisition of the previous owner

Dec 30, 2009 Income Tax Case Laws

This article summarizes a recent ruling of the Special Bench (SB) of the Mumbai Income Tax Appellate Tribunal (ITAT) [ITA No. 7315/Mum/2007] in the case of DCIT vs. Manjula Shah (Taxpayer) which held that, in the case of gifted capital asset, indexation benefit is available to a donee from the year of its acquisition by the previous owner. The SB adopted a purposive construction of the definition of ‘Indexed Cost of Acquisition’ (ICOA) by looking at the scheme of the Indian Tax Law (ITL), which seeks to grant the benefit of cost and holding period of the previous owner to the donee.

Link:

https://www.taxguru.in/income-tax-case-laws/in-case-of-gifted-assets-indexation-benefit-is-available-from-the-year-of-acquisition-of-the-previous-owner.html

Can anyone help in this regard ?

Whether i can take the Indexation benefit from the date of acquisition of Previous owner or not, by quoting the above Case Law ?

Replies (2)

Amir

Learner

4016 Points Posted on 02 February 2010

Dear Mohan, I know that in some of the text books u will find that indexation is available from the year in which asset was first held by the assessee..... But Friend, this is not the correct interpretation, in case of gifts, benefit of indexation is available from the year in which the assee was acquired by the previous owner.. u, urself quoted a judgement, then where is d problem

C.Balaji

Learner

1867 Points Posted on 02 February 2010

Mr.Mohan

I do have read from books that indexation benefit will be available only from the year in which the asset was acquired by the assessee....

Incase of gift/will/inheritance, Indexation benefit is available from the year in which the asset was acquired by the Previous owner....

for eg: B acquired a property of A (father) by will after the demise of A on 1.4.2008..... B sold on 15.5.2009....A acquired the property on 1.4.83.....

According to me, it will be treated as long term and not short term....