ITA No. 1063/Del/2020 involves a complex dispute over the calculation of capital gains tax arising from the sale of an inherited property, emphasizing the legal nuances in assessing the cost basis and period of holding.
Kulvinder Singh Kohli inherited a property, which was originally purchased by his father and later divided among heirs. The property was sold, and the calculation of capital gains became a subject of contention due to discrepancies in the cost basis used and the lack of supporting documentation for the declared acquisition costs.
The case was escalated to the Income Tax Appellate Tribunal after the Commissioner of Income-tax Appeals upheld an ad hoc adjustment to the cost basis proposed by the Assessing Officer, leading to a higher than expected tax liability for Kohli. The Tribunal examined the documentation and the legitimacy of the cost basis and period of holding as declared by Kohli.
The Tribunal focused on the interpretation of Section 49 read with Section 55 of the Income Tax Act, which pertains to the cost of acquisition of assets inherited or acquired through a will. The Tribunal questioned the adjustments made by the lower authorities and stressed the importance of adhering to legislative provisions for fair tax assessment.
The case highlights the critical aspects of determining the cost basis for inherited properties and the importance of proper documentation to substantiate claims during capital gains computation. The Tribunal’s decision underscored the need for precise and equitable tax assessments, aligning closely with statutory guidelines.
ITA 1063/DEL/2020: Dispute on Capital Gains Calculation from Inherited Property
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform