The Hon’ble Finance Minister, Arun Jaitley had presented the Union Budget 2016, on 29 February 2016. The Finance Bill, 2016 had proposed certain changes consisting of substantive and procedural changes to reduce the litigation and to bring clarity in the Income-tax Act. There were many judicial rulings that spurred amendments by the Finance Bill, 2016.
Monday, March 7, 2016
Market value of property as on 1/4/1981 can be taken as its cost even if only possession was acquired before 1/4/1981
a) Govt. of Tamil Nadu assigned property to the assessee with subject to certain conditions.
b) Assessee acquired possession of the property much before 1st April 1981 by paying entire consideration thereof but due the various conditions imposed by the Tamil Nadu Government, sale deed in favour of assessee was executed in April 1994.
c) Later on in year 2003, assessee sold the property and claimed capital gain loss by taking fair market value (FMV) of property as on 1st April 1981 as its cost of acquisition.
d) CIT took the view that assessee couldn’t take FMV of property as on 1st April 1981 as its cost of acquisition for computation of capital gain as he became the legal owner of the property in 1994 when the sale deed was executed. Accordingly, CIT directed AO to compute capital gain by taking date of acquisition of property as 19.4.1994.
e) Aggrieved by the order of CIT, assessee filed the instant appeal before the tribunal.