9911796707
TMI Blog2011 (3) TMI 1809X X X X Extracts X X X X X X X X Extracts X X X X ..... hough on the issue contradictory decisions have been rendered by the ITAT . 2. The assessee is an individual. During the previous year the assessee alongwith other co-owners sold three plots of land at Madhapar, Gujarat. The assessee held 34.35% share in the Plot of Land bearing R.S.No.52/53, 4.5% share in the Plot of Land bearing R.S. No.11/1 11/2 and 53.40% share in the Plot of Land bearing R.S.No.466/3. The assessee has declared his share of sale consideration at ₹ 1,54,500/-, ₹ 5,82,750/- and ₹ 30,91,986/- respectively. Against such consideration, the assessee has claimed indexed cost of acquisition of ₹ 1,65,120/-, ₹ 6,15,600/- and ₹ 28,88,976/- respectively. The assessee has declared a total lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puting the indexed cost of acquisition, the assessee has taken the base year as 1981 of the entire property. The AO thereafter referred to Explanation (iii) to section 48 of the Income Tax Act, 1961 (the Act), which reads as follows:- indexed cost of acquisition means 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 on the 1st day of April, 1981, whichever is later; The AO was of the view that the benefit of indexation can be allowed from the period when the Asset is held by the Assessee and not when his predecessors in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1984-85 2003-04 - Sale consideration 1,45,688 4,37,062 5,82,750 Cost of Acquisition 32,063 96,188 1,28,250 Indexed cost of acquisition 1,23,122 99,720 2,22,842 Capital Gains 22,566 3,37,342 3,59,908 Plot of Land bearing R.S.No.466/3 10% 90% Total Year in which asset first held By the assessee 1984-85 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal by the Revenue, the issue was referred to the Special Bench. HELD by the Special Bench: (i) Explanation (iii) to s. 48 defines the term indexed cost of acquisition to mean the amount which bears to the cost of acquisition the same proportion as the . Cost Inflation Index for the first year in which the asset was held by the assessee A literal reading of the provision suggests that one has to go by the year in which the asset was held by the assessee. However, this would be inconsistent with the scheme of the Act as reflected in the definition of short-term capital asset in Expl. 1(b) to s. 2 (42A) which provides that the period for which the asset was held by the previous owner also has to be taken into account. It is not lo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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