Law:

Section:

Section 48(i) of the Income-tax Act, 1961-Capital, gains-Mode of computation-Assessee, owner of certain land which was in possession of two tenants, entered into agreements for its sale to third party which insisted on getting vacant possession of land-Whether amount paid by assessee to tenant s to get land vacated allowable as deduction in computation of capital gains under section 48(i)-Held, on facts, yes Facts When the assessees entered into agreements for sale of the aforesaid lands, there were two tenants in occupation of those lands and the prospective purchasers insisted upon getting vacant possession of the land. Consequently, the assessees had to pay Rs. 9,500 to each of the tenants to get the land vacated. The assessees claimed that the payments made by them to the tenants in order to secure vacant possession was expenditure incurred wholly and exclusively in connection with the transfer of the properties within the meaning of section 48(i) and hence it should be allowed as a deduction in the computation of capital gains. The Tribunal, having found that the purchasers of the lands from the assessees insisted on vacant possession being rendered as part of the conditions of purchase of the land, allowed the assessee's claim. On reference: Held Having regard to the facts and findings recorded by the Tribunal, it was clear that the expenditure of Rs. 19,000 was incurred wholly and exclusively in connection with the agreement of sale which preceded the transfer and in fulfilment of a condition of sale. The Tribunal was, therefore, quite right in bringing the expenditure under section 48(i). Section 48(i) of the Income-tax Act, 1961-Capital gains-Mode of computation-While effecting partition of hindu undivided family's land, assessees agreed to set apart Rs. 25,000 for marriage expenses of their sister-Whether said amount allowable as deduction in computation of capital gains realised on sale of said land-Held, on facts, no Facts At the time of partition of the aforesaid lands, the assessees agreed to set apart a sum of Rs. 25,000 for the marriage expenses of their sister. Each of the assessees claimed that in computing the capital gains realised on the…

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