Meaning of “adjusted”, “cost of improvement” and “cost of acquisition”
Meaning of "adjusted", "cost of improvement" and "cost of acquisition".
( 1) in relation to a capital asset being goodwill of a business shall be taken to be nil; and
( 2) in relation to any other capital asset,—]
( i) where the capital asset became the property of the previous owner or the assessee before the 87[1st day of April, 87a[ 1974]], 87b[ and the fair market value of the asset on that day is taken as the cost of acquisition at the option of the assessee,] means all expenditure of a capital nature incurred in making any additions or alterations to the capital asset on or after the said date by the previous owner or the assessee, and
( ii) in any other case, means all expenditure of a capital nature incurred in making any additions or alterations to the capital asset by the assessee after it became his property, and, where the capital asset became the property of the assessee by any of the modes specified in 88[sub-section (1) of] section 49, by the previous owner,
but does not include any expenditure which is deductible in computing the income chargeable under the head "Interest on securities", "Income from house property", "Profits and gains of business or profession", or "Income from other sources", and the expression "improvement" shall be construed accordingly.
( a) in relation to a capital asset, being goodwill of a business,—
( i) in the case of acquisition of such asset by the assessee by purchase from a previous owner, means the amount of the purchase price; and
( ii) in any other case, shall be taken to be nil;
( b) in relation to any other capital asset,—]
( i) where the capital asset became the property of the assessee before the 91 [1st day of April, 91a[ 1974], means the cost of acquisition of the asset to the assessee or the fair market value of the asset on the 91[1st day of April, 91a[ 1974]], at the option of the assessee;
( ii) where the capital asset became the property of the assessee by any of the modes specified in 92[sub-section (1) of] section 49, and the capital asset became the property of the previous owner before the 91[1st day of April, 91a[ 1974]], means the cost of the capital asset to the previous owner or the fair market value of the asset on the 91 [1st day of April, 91a[ 1974]], at the option of the assessee;
( iii) where the capital asset became the property of the assessee on the distribution of the capital assets of a company on its liquidation and the assessee has been assessed to income-tax under the head "Capital gains" in respect of that asset under section 46, means the fair market value of the asset on the date of distribution;
94 (v) where the capital asset, being a share or a stock of a company, became the property of the assessee on—
( a) the consolidation and division of all or any of the share capital of the company into shares of larger amount than its existing shares,
( b) the conversion of any shares of the company into stock,
( c) the re-conversion of any stock of the company into shares,
( d) the sub-division of any of the shares of the company into shares of smaller amount, or
( e) the conversion of one kind of shares of the company into another kind,
means the cost of acquisition of the asset calculated with reference to the cost of acquisition of the shares or stock from which such asset is derived.]
(3) Where the cost for which the previous owner acquired the property cannot be ascertained, the cost of acquisition to the previous owner means the fair market value on the date on which the capital asset became the property of the previous owner.