avinash (CA final, article) (55 Points)
26 August 2011X gifted right in a propery taken on lease to Y through will.
Y got the lease property registered in her name in the f.y 1997-98 by paying Rs.61000.
Later Y gifted the same to Z through will. Y died in the f.y 2003-04.
Z sold the property in the f.y 2005-06 for Rs.80 lac.
plz suggest me how to go about computing COST??????? to ascertain capital gains.
avinash
(CA final, article)
(55 Points)
Replied 26 August 2011
THANKS FOR THE REPLY. BUT AS PER S.49(1), only cost to the previous owner is mentioned. moreover x is not hthe absolute owner when she is alive.
plz if u can eloborate on calculation of cost.
X only paid lease rentals. and
y lease rentals till f.y1997-98 and then got transferred in her name
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 26 August 2011
property transferred X>Y>Z
here no consideration is passed from Z >Y>X
exercise of will takes place only after the demise of the person who made the will
the lease premium paid by X is the COA
rentals are not to be calculated as COA
avinash
(CA final, article)
(55 Points)
Replied 26 August 2011
what is the diff between lease premium and lease rentals sir...
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 26 August 2011
at the time of taking posession the lesse pays certain amount to lessor as premium ( you can say interest free deposit)
lease rental is the running maintainance or rent, for using the property not to be capitalized.
avinash
(CA final, article)
(55 Points)
Replied 26 August 2011
from 1932-33 to 1997-98 they paid lease rentals ..
do i need to sum those figures as such.OR do i need to compute indexation for each year?????
plzzz clarify
avinash
(CA final, article)
(55 Points)
Replied 26 August 2011
then only the lease premium is to be indexed
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 26 August 2011
yes, only lease premium paid by X is COA
R SUBRAMANIAN
(NA)
(56 Points)
Replied 26 August 2011
In your problem, it is mentioned Y paid Rs.61000/- and got the property registered in her name. It is not clear about the nature of title - ie; leasehold or freehold .
Further, where the capital asset became the property of the assessee - under a gift or will, cost of acquisition will be deemed to be the cost for which the previous owner of the property acquired it. So, the cost incurred by Y needs to come into picture.
Furthermore, lease rentals (in my opinion) are of recurring nature and is a charge for the usage of the property and does not come within the purview of any improvement or basic cost.
CAclubindia
