Appeals dismissed, costs not awarded. Tribunal upholds Section 55(2)(b)(ii) interpretation.

The Appeals were dismissed, and no costs were awarded. The Tribunal's interpretation of Section 55(2)(b)(ii) was upheld, determining that indexation does not apply to tenancy rights acquired before April 01, 1981. The issue of determining the cost of acquisition of tenancy rights was restored to the Assessing Officer in accordance with Section 55(3) for previous owners. The Appellants were granted the liberty to challenge the Assessing Officer's order before the Appellate Authorities.

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Issues Involved:
- Interpretation of Section 55(2)(b)(ii) of the Income Tax Act, 1961 for determining the cost of acquisition of tenancy rights inherited before April 01, 1981.
- Applicability of indexation under Section 55(2)(b)(ii) to determine the cost of acquisition of tenancy rights.
- Whether the Tribunal correctly restored the issue to the Assessing Officer for determining the cost of acquisition of tenancy rights inherited from the previous owner.

Analysis:

Issue 1: Interpretation of Section 55(2)(b)(ii)
- The Appellants sold their tenancy rights and sought indexation of the fair market value of the property as on April 01, 1981.
- The Assessing Officer denied indexation under Section 55(2)(a) and treated the cost of acquisition as 'Nil'.
- The CIT(A) upheld the Assessment Orders, stating that Section 55(2)(b) does not apply to the sale of tenancy rights.
- The Tribunal held that indexation under Section 55(2)(b)(ii) does not apply to tenancy rights acquired before April 01, 1981.
- The Tribunal restored the issue to the Assessing Officer to determine the cost of acquisition in accordance with Section 55(3) for the previous owners.

Issue 2: Applicability of Indexation
- Section 48 and Section 49 of the Act govern the computation of capital gains and cost of acquisition based on the full value of consideration received.
- Section 55(2)(a) specifies that for assets like tenancy rights, the cost of acquisition is either the purchase price or nil if acquired through inheritance.
- Section 55(2)(b) deals with the cost of acquisition for assets not covered by Section 55(2)(a), making it inapplicable to tenancy rights.
- The Tribunal's decision was based on a plain reading of the provisions, concluding that the Appellants cannot avail of Section 55(2)(b)(ii) for indexation.

Issue 3: Restoration of Issue to Assessing Officer
- The Tribunal's decision to restore the issue to the Assessing Officer aligns with Section 55(3) for determining the cost of acquisition of tenancy rights inherited from the previous owner.
- The Appellants were granted the liberty to challenge the Assessing Officer's order before the Appellate Authorities as per the remand by the Tribunal.

Conclusion:
- The Appeals were dismissed, and no costs were awarded.
- The Tribunal's interpretation of Section 55(2)(b)(ii) and the restoration of the issue to the Assessing Officer for determining the cost of acquisition of tenancy rights inherited before April 01, 1981, were upheld.
- The Appellants were allowed to challenge the Assessing Officer's order through the Appellate Authorities without requiring further liberty.

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