Cost of acquisition includes amount paid to acquire fractional ownership in property

In Lalitaben Hariprasad v. CIT (2009) 23 DTR (Guj) 371 the assessee a HUF consisting of karta and his wife having one-half share in an immovable property, further acquired the other half portion from two sons by paying Rs.14.33 lakhs each. It was found that the assessee’s HUF had undergone partition which was accepted by the Revenue and recorded in terms of Section 171 of the Act. The Assessing Officer declined to treat the amounts paid as additional cost of acquisition. The court held that the partition of HUF was already recorded by the Assessing Officer and the payment made for acquiring additional fraction of ownership in the property is to be treated as cost of acquisition. The contention of the Revenue that the amounts paid to the sons as self created charge was negatived by the court. Thus the decision went in favour of the assessee. Precedent for the decision could be found in Narendra N.Chauhan v. CIT (2003) 261 ITR 185(Guj).