55. Meaning of “adjusted”, “cost of improvement” and “cost of acquisition” .
(1)For the
purposes of 5[sections 48 and 49],-
6* * * * *
7[(b) “cost of any improvement”, - (1)in relation to a capital asset being goodwill of a business 8[or a right to manufacture,
produce or process any article or thing] 9[or right to carry on any business 10[or professio n]] 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 11[1st day of April, 2001 ], 12*** 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 t he 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
13[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.