Claiming of cost of Capital Assets acquired by way of Gift

[PRIYAM KHAMBHATA]

Respected Sir

There are capital assets being unlisted equity shares acquired by Private Discretionary Trust by way of Gift during the FY 2022-23 from its Settlor - X (Individual). Further, Settlor - X, has also acquired such capital assets by way of Gift from his mother in FY 2007-08.

Private Discretionary Trust has sold out such unlisted equity share during the year under consideration. In this connection, can we claim original owner cost (FY 2007-08) against sell of unlisted equity shares in the case of Private Discretionary Trust. In this position, Private Discretionary Trust is claiming cost of previous owner to previous owner.

Please guide me.

Thanks

AI Summary

Gifted share acquisition cost raises the question whether a discretionary trust may use an earlier owner's cost when calculating gains.
The cost of acquisition of gifted unlisted equity shares arises as an income-tax issue where a private discretionary trust sells shares received by gift from its settlor. The settlor had himself received the shares as a gift from his mother. The question is whether, in calculating gains on the trust's sale, the cost attributable to the original owner may be claimed, even though that owner precedes the settlor in the chain of ownership. The applicable tax treatment is not determined.