TaxTMI 
TaxTMI 
TaxTMI 
2015 (8) TMI 1206
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.... involved in these appeals are common, heard together and being disposed of by this common order for the sake of convenience. I. T. A. No. 355/Mds/2015 2. Brief facts of the case are that the assessee is a non-resident. During the relevant accounting period, the assessee has sold his share of property situated at Nungambakkam, Chennai giving rise to capital gains in his hands. The share of the above mentioned property devolved on the nonresident assessee on the basis of inheritance, on the demise of Mrs. Nazneen Ahmed Ali. The property was previously owned by Mrs. Nazneen. She got the property by way of gift from her mother in the year 1953. As per the letter of the administration granted by the High Court of Madras, all the 7 clause III ....
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....t for the purpose of computation of capital gains, indexed cost of acquisition has to be computed with reference to the year in which previous owner first held the asset and not the year in which the assessee became owner of asset by way of an inheritance and directed the Assessing Officer to recompute the capital gains accordingly. 5. The Revenue is in appeal before us and the ld. DR has relied on the order of the Assessing Officer. 6. None appeared on behalf of the assessee despite service of notice. Hence, we proceed to decide the issue on merits after hearing the ld. DR. 7. We have heard the ld. DR and perused the materials on record and gone through the orders of authorities below. The only issue involved in these appeals is whethe....
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....ious owner in determining the period for which the said asset was held by the assessee, then that object cannot be defeated by excluding the period for which the said asset was held by the previous owner while determining the indexed cost of acquisition of that asset to the assessee. In other words, in the absence of any indication in clause (iii) of the Explanation to Section 48 of the Act that the words 'asset was held by the assessee' has to be construed differently, the said words should be construed in accordance with the object of the statute, that is, in the manner set out in Explanation 1(i)(b) to section 2(42A) of the Act. 20. To accept the contention of the revenue that the words used in clause (iii) of the Explanation to Section....
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....on of deducting the cost of improvement incurred by the previous owner in the case of an assessee covered under Section 49(1) of the Act would arise only if the period for which the asset was held by the previous owner is included in determining the period for which the asset was held by the assessee. Therefore, it is reasonable to hold that in the case of an assessee covered under Section 49(1) of the Act, the capital gains liability has to be computed by considering that the assessee held the said asset from the date it was held by the previous owner and the same analogy has also to be applied in determining the indexed cost of acquisition. 22. The object of giving relief to an assessee by allowing indexation is with a view to offset the....
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....ies. In such circumstances the expression/words can be interpreted by the courts to avoid absurdities and inconsistencies between the provisions. In the present case, as noticed above, the construction placed by the Revenue will lead to inconsistency and incongruities, when we refer to Section 49and clause (iv) to Explanation (1) to Section 48. This will result in absurdities because the holding of predecessor has to be accounted for the purpose of computing the cost of acquisition, cost of improvement and indexed cost of improvement but as per the Revenue not for the purpose of indexed cost of acquisition. As noticed below, even for the purpose of deciding whether the transaction is a short term capital gain or long term capital gain, the ....