In case of transfer by gift, will, trust, etc indexed cost to be determined with reference to holding by previous owner

Arun Shungloo Trust vs. CIT (Delhi High Court)

The settlor acquired property before 1.4.1981 and he settled in on trust on 5.1.1996. The assessee-trust sold the property and computed the indexed cost of acquisition on the basis that it “held” the property from the time the settlor had held it. The AO accepted that the settlor’s cost of acquisition had to be treated as the assessee’s cost of acquisition but held that the settlor’s period of holding could not be treated as the assessee’s period of holding. This was upheld by the Tribunal. On appeal by the assessee to the High Court, HELD reversing the Tribunal: