Law:

Section:

Section 49 of the Income-tax Act, 1961 - Capital gains - Cost with reference to certain modes of acquisition - Assessment year 1988-89 - There was an HUF consisting of karta, his wife and their two sons - HUF owned an immovable property which came to be divided amongst members of HUF - In process of partition, karta and his wife (assessees in instant case) took one half share each of immovable property as property admitted of such physical partition - At that time, karta had paid certain amount to one of his sons for acquisition of his one-fourth share in immovable property and, similarly, his wife had undertaken to pay a like amount to other son - Thereafter, both assessees, in their respective returns, while computing capital gains on sale of their respective share in immovable property, claimed deduction of aforesaid amount in hands of each one of them being cost of acquisition of house property - Same was disallowed by Assessing Officer holding that property being of HUF, the only cost of acquisition, which could be allowed under provisions of section 49, was cost of acquisition in hands of original owner from whom property had been received on partition - Whether in instant case, cost of acquisition in hands of previous owner, viz., HUF, as proportionately available in hands of each of assessees, would be governed by provisions of section 49(1)(i), whereas amount paid by each of assessees to other two members of HUF would be termed to be cost of acquisition to assessees under section 48, being cost of acquisition of additional interest or additional share acquired by them at time of partition - Held, yes FACTS There was an HUF consisting of the karta, his wife and their two sons. The HUF owned an immovable property which came to be divided as part and parcel of the total partition which took place amongst the members of the HUF and in that process, Karta and his wife (the assessees in the instant case) took one half share each of the immovable property as the property admitted of such physical partition. At the time of partition, the karta's wife had undertaken to pay the amount of Rs. 14,33,000 to one of her two sons for acquisition of his one-fourth…

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