TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 1510
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....ssing Officer has erred in computing the Indexed cost of Acquisition by taking the F.Y. 2000-01 instead of F.Y. 1980-81 as the base year of indexation and the reasons for doing so are wrong and contrary to the facts and provisions of the law. 2. On the facts and under circumstances of the case and in law, the Learned Assessing Officer has erred in disallowing exemption u/s. 54 of Rs. 3,55,000/- and the reasons for doing so are wrong and contrary to the facts and provisions of the law. 2. The dispute stem from the fact that the assessee, a resident individual, sold certain agricultural land situated in Gujarat during impugned AY for sale consideration of Rs. 24 Lacs. The aforesaid property was inherited by the assessee from his father and....
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.... available to the assessee is concerned, the same is squarely covered by the judgment of Hon'ble Bombay High Court rendered in CIT Vs. Manjula J.Shah [16 Taxmann.com 42], wherein Hon'ble Court has concluded the identical issue in the following manner:- "16) It is the contention of the revenue that since the indexed cost of acquisition as per clause (iii) of the Explanation to Section 48 of the Act has to be determined with reference to the Cost Inflation Index for the first year in which the asset was held by the assessee and in the present case, as the assessee held the asset with effect from 1/2/2003, the first year of holding the asset would be FY 2002-03 and accordingly, the cost inflation index for 2002-03 would be applicable in dete....
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....18) If the argument of the revenue that the deeming fiction contained in Explanation 1(i)(b) to Section 2(42A) of the Act cannot be applied in computing the capital gains under Section 48 of the Act is accepted, then, the assessee would not be liable for long term capital gains tax, because, it is only by applying the deemed fiction contained in Explanation 1(i)(b) to Section 2(42A) and Section 49(1)(ii) of the Act, the assessee is deemed to have held the asset from 29/1/1993 and deemed to have incurred the cost of acquisition and accordingly made liable for the long term capital gains tax. Therefore, when the legislature by introducing the deeming fiction seeks to tax the gains arising on transfer of a capital asset acquired under a gift o....
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....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 48 of the Act has to be read by ignoring the provisions containe....
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....ed 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. It is also noted that the ratio of above decision has become final since Special leave Petition [SLP No. 19924/2012] filed by the revenue agai....