2004 (7) TMI 285

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....t of Rs. 21,02,000, and secondly, whether the forfeited amount is to be deducted from the cost of acquisition or from the indexed cost of acquisition. 4. The property in question was subject to negotiations for its transfer. Assessee did receive advance of Rs. 21,02,000. Sale could not be fructified. Resultantly advance was forfeited. Indisputably cost of acquisition amounted to Rs. 9,40,416. Assessing Officer while computing the capital gains first worked out the capital gains on the forfeited amount. It amounted to Rs. 11,61,584. 5. Capital gain was again worked out on the same property when sale took place. Property was sold for Rs. 1,55,00,000. Assessing Officer took the cost of acquisition at 'Nil' value and after deducting trans....

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...., any advance or other money received and retained by the assessee in respect of such negotiations shall be deducted from the cost for which the asset was acquired or the written down value or the fair market value, as the case may be, in computing the cost of acquisition". 9. The expression "indexed cost of acquisition" has been defined in clause (iii) of Explanation to section 48 of the Act, so as to mean an amount which bears to the cost of acquisition the same proportion as Cost Inflation Index for the year in which the asset is transferred bears to the Cost Inflation Index for the first year in which the asset was held by the assessee or for the year beginning 1-4-1981, whichever is later. The cost of acquisition in relation to any ....

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..... If the language of the statute is plain, obvious meaning is to be applied. Rules of interpretation are applied only to resolve the ambiguities. The object and purpose of interpretation is to ascertain the MENS LEGIS, i.e., the intention of the law, as evinced in the statute. If the precise words used are plain and unambiguous, we are bound to construe them in their ordinary sense. Words may be modified or varied where their import is doubtful or obscure. 12. We have carefully perused the prescription of section 51 of the Act. It takes care of the situation where any capital asset was negotiated for transfer on any previous occasion and as a result thereof assessee received and obtained advance money, in such eventuality, section prescr....