Report No. 12
50. Determination of statutory cost.-
The statutory cost of an asset shall be determined as follows-
(1) Where the capital asset became the property of the assessee by any of the modes specified in section 49(i) [clause (i) of section for statutory cost with reference to modes of acquisition], the statutory cost of the asset shall be-
(a) the cost of acquisition of the asset to the assessee , as increased by the (b) cost of any improvements made thereto, incurred and borne by the assessee; or
[Section 12B(2)(ii), part]
(b) where the capital asset became the property of the assessee before the 1st day of January, 1954, then, at the option of the assessee, the fair market value of the asset on the 1st day of January, 1954, as increased by the cost of any improvements made thereto on or after the 1st day of January, 1954 incurred and borne by the assessee.
[Section 12B(2), 3rd proviso part.]
(2) Where the capital asset became the property of the assessee by the mode specified in section 49 (ii) [clause (ii) of section re: statutory cost with reference to modes of acquisition], the statutory cost of the asset shall be determined as follows-
[Section 12B(3), main para., earlier half, part]
(i) where the capital asset became the property of the assessee before the 1st day of April, 1956, the statutory cost of the asset shall be the highest of the following-
[Section 12B(3), Proviso (i), part]
(a) the cost of acquisition of the asset to the previous owner thereof, as increased by the cost of any improvements made thereto after its acquisition by the previous owner or the assessee, incurred and borne by the previous owner or the assessee, as the case may be; or
[Section 12B(3), main para., earlier half, part]
(b) the fair market value of the asset on the date on which, it became the property of the assessee, as increased by the cost of any improvements made thereto after its acquisition by the assessee, incurred and borne by the assessee; or
[Section 12B(3), proviso (i), part]
(c) where the capital asset became the property of the previous owner before the 1st day of January, 1954, the fair market value of the asset on the 1st day of January, 1954, as increased by the cost of any improvements made thereto on or after the 1st day of January, 1954, by the previous owner or the assessee, incurred and borne by the previous owner or the assessee, as the case may be;
[Section 12B(2), 3rd proviso, part]
(ii) where the capital asset became the property of the assessee on or after the 1st day of April, 1956, the statutory cost of the asset shall be the fair market value of the asset on the date of the partition, as increased by the cost of any improvements made thereto on or after the date of the partition, incurred and borne by the assessee.
[Section 12B(3), proviso (ii)]
(3) Where the capital asset became the property of the assessee by any of the modes specified in section 49(iii) [clause (iii) of section regarding statutory cost with reference to mode of acquisition], the statutory cost of the asset shall be determined as follows:-
(i) where the capital asset became the property of the assessee before the 1st day of April, 1956, its statutory cost shall be determined in accordance with the provisions of clause (i) of sub-section (2);
[Section 12B(2), 3rd proviso part; section 12B(3), main para., earlier half part;
[section 12B(3), proviso (i), part]
(ii) where the capital asset became the property of the assessee on or after the 1st day of April, 1956, the statutory cost of the asset shall be-
(a) the cost of acquisition of the asset to the previous owner thereof, as increased by the cost of any improvements made thereto after its acquisition by the previous owner or the assessee, incurred and borne by the previous owner or the assessee, as the case may be; or
[Section 12B(3), main para., earlier half, part]
(b) where the asset became the property of the previous owner before the 1st day of January, 1954, then, at the option of the assessee, the fair market value of the asset on the 1st day of January, 1954, as • increased by the cost of any improvements made thereto on or after the 1st day of January, 1954, by the previous owner or the assessee, incurred and borne by the previous owner or the assessee, as the case may be.
[Section 12B(2), 3rd proviso, part]
(4) Where the capital asset became the property of the assessee, whether before or after the 1st day of January, 1954, by any of the modes specified in section 49 (iv) [clause (iv) of section re: statutory cost and mode of acquisition], the statutory cost of the capital asset shall be-
(a) the cost of acquisition of the asset to the previous owner thereof, as increased by the cost of any improvements made thereto after its acquisition by the previous owner or the assessee, incurred and borne by the previous owner or the assessee, as the case may be; or
[Section 12B(3), main para., earlier half, part]
(b) where the asset became the property of the previous owner before the 1st day of January, 1954, then, at the option of the assessee, the fair market value of the asset on the 1st day of January, 1954, as increased by the cost of any improvements made thereto on or after the 1st day of January, 1954, by the previous owner or the assessee, incurred and borne by the previous owner or the assessee, as the case may be.
[Section 12B(2), 3rd Proviso, part]
Explanation.-Where the cost of acquisition of a capital asset to the previous owner cannot be ascertained, the fair market value on the date on which the capital asset became the property of the previous owner shall be deemed to be the cost of acquisition thereof to the previous owner for the purposes of this section.
[Section 12B(3), main para., latter half]
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