M & Sons., a Hindu Undivided Family (HUF), had purchased a land for ₹ 1,50,000 in 2002-03. In the previous year (PY) 2006-07, a partition takes place and the coparcener, B, gets this plot valued at ₹ 200,000. In PY 2

Computation of Capital Gains for AY 2019-20 Particulars Amounts (₹) Period of Holding 2002-03 to 2018-19 i.e. Long Term Capital Gain Full Value of Consideration 15,00,000 Less: Indexed Cost of Acquisition (Note 1) (4,00,000) Less: Indexed Cost of Improvement (Note 2) (5,42,636) Long Term Capital Gains 5,57,364 Note: The cost of acquisition for the land, in case of partition of HUF would be the cost of the previous owner. Indexed Cost of Acquisition is (₹1,50,000/105)*280 = ₹4,00,000. Indexation is done from the previous year of acquisition by HUF i.e. PY 2002-2003.(As decided in the case of CIT V Manjula J. Shah - [2013] 355 ITR 474). If this case is not followed then Indexation shall be done from PY in which asset was held by the assessee i.e. PY 2006-2007 Indexed Cost of Improvement is (₹2,50,000/129)*280 = ₹5,42,636