Meaning of "adjusted", "cost of improvement" and "cost of acquisition" - Section 55

(1) For the purposes of sections 48 and 49, -

(a) [Omitted by the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986, with effect from 1st April, 1988] ;

(b) "cost of any improvement", -

(1) in relation to a capital asset being goodwill ¹⁰[or any other intangible asset] of a business or a right to manufacture, produce or process any article or thing ¹[or right to carry on any business] ⁵[or profession] ¹⁰[or any other right] shall be taken to be nil; and

(2) in relation to any other capital asset, -

(i) where the capital asset became the property of the previous owner or the assessee before the ⁶[1st day of April, 2001], means all expenditure of a capital nature incurred in making any additions or alterations to the capital asset on or after the said date by the previous owner or the assessee, and

(ii) in any other case, means all expenditure of a capital nature incurred in making any additions or alterations to the capital asset by the assessee after it became his property, and, where the capital asset became the property of the assessee by any of the modes specified in sub-section (1) of section 49, by the previous owner,

but does not include any expenditure which is deductible in computing the income chargeable under the head "Interest on securities", "Income from house property", "Profits and gains of business or profession", or "Income from other sources", and the expression "improvement" shall be construed accordingly.

(2) For the purposes of sections 48 and 49, "cost of acquisition", -

⁹[(a) in relation to a capital asset, being goodwill of a business or profession, or a trade mark or brand name associated with a business or ¹²[profession, or any other intangible asset or a right] to manufacture, produce or process any article or thing, or right to carry on any business or profession, or tenancy rights, or stage carriage permits, or loom ¹¹[hour, or any other right]--

(i) in the case of acquisition of such asset by the assessee by purchase from a previous owner, means the amount of the purchase price; and

(ii) in the case falling under sub-clauses (i) to (iv) of sub-section (1) of section 49 and where such asset was acquired by the previous owner (as defined in that section) by purchase, means the amount of the purchase price for such previous owner; and