Dismissing the appeal of the assessee Court held that ;held though the assessee has acquired tenancy rights by inheritance i.e. from his father before 1-4-1981 as the assessee had acquired tenancy rights by inheritance, cost of acquisition would be computed in terms of section 49(1)(iii)(a) of the Act . In view of fact that S. 49(1)(iii)(a) provides that cost of acquisition of capital asset would deemed to be cost incurred by previous owner of property, benefit of indexation of cost of acquisition is not eligible .Cost to be taken as nil, as the assessee has not paid any purchase price for acquisition of the same .( AY.2007 -08)
Dharmakumar C. Kapadia v. ACIT (2018) 257 Taxman 239 (Bom)(HC) Editorial: Order in Dharmakumar C. Kapadia v. ACIT ( 2016) 65 taxmann.com 61 ( Mum) (Trib) is affirmed
S. 55 : Capital gains – Cost of improvement – Cost of acquisition -Tenancy rights- Acquired tenancy rights by inheritance i.e. from his father before 1-4-1981, in view of provisions of section 49(1)(iii), benefit of indexation of cost of acquisition could not be granted while computing capital gain arising from sale of said rights- Cost to be taken as nil, as the assessee has not paid any purchase price for acquisition of the same . [ S. 48 ,49(1)(iii), 55 (2)(b), 55(3) ]