LTCG to be Computed from Taxpayer’s First Year as Property Holder: ITAT Notes Error in Indexation Year [Read Order]
ITAT allowed the contention by the appellant for years of indexation. The first time the property was held by the assessee is to be taken for computation of the cost of acquisition.
![LTCG to be Computed from Taxpayer’s First Year as Property Holder: ITAT Notes Error in Indexation Year [Read Order]](https://images.taxscan.in/h-upload/2026/01/29/2122448-ltcg-computed-from-taxpayers-first-year-property-holder-itat-notes-error-indexation-year-taxscan.webp "LTCG to be Computed from Taxpayer’s First Year as Property Holder: ITAT Notes Error in Indexation Year [Read Order]")
The Income Tax Appellate Tribunal ( ITAT ) has, in a recent case, noted that while computing long term capital gain, the indexation must be calculated using the cost of inflation index for the year in which the taxpayer first held the property. The tribunal has observed this error indexation year in the mentioned case. Briefly, the facts state that the assessee sold a property...
The Income Tax Appellate Tribunal ( ITAT ) has, in a recent case, noted that while computing long term capital gain, the indexation must be calculated using the cost of inflation index for the year in which the taxpayer first held the property. The tribunal has observed this error indexation year in the mentioned case.
Briefly, the facts state that the assessee sold a property in which his share amounted to INR 22,79,776/-. The stamp valuation authority valued it at INR 68,38,000/-. The Assessing Officer made an addition of INR 2,16,465/- as while computing long term capital gain the indexed cost cost the year 1996 - 97 was taken.
This contention by the CIT(A) was the primary issue, where the year of cost of acquisition 1996-97 was confirmed against the claim of the assessee, that was 1985-86.
The appellant, Adil Noshirvan Shethna, argued through his counsel that he had claimed cost of inflation index for the year in which the assessee first time held the property. In furtherance, the said property was passed on after the death of the earlier owner as the appellant was one of their heirs through will.
The bench, consisting of Dr. B. R. R. Kumar (Vice President) and Suchitra Kamble (Judicial Member), held that the appeal should be allowed as the assessee had rightly indexed the cost of indexation from the year 1985-86.Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
