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2012 (11) TMI 985 - GUJARAT HIGH COURTRelinquishment of tenancy rights - whether deductible expenditure for computation of capital gains u/s 48 - held that:- Revenue Authorities and the Tribunal have held that the expenditure was not incurred wholly and exclusively in connection with the transfer of the capital assets. sale deed was not a tripartite agreement and the amount expended by the assessee separately would not fall within the expression wholly and exclusively incurred in connection with the transfer. Karta of the assessee HUF and his brother were the directors of the said Company. The said Company was shown to be the tenant of substantial portion of the building. The Company, however, created a sub-tenancy on the same property in favour of the Bank of Baroda. Payment of Rs.15,00,000/- made to the Company by the assessee was only for reducing its tax liability and not for the purpose of executing the transaction of sale. Sect 48(1) of the Act provides for mode of computation and deduction while charging capital gain. Clause-I thereof in particular provides for a payment from the value of consideration received or accrued as a result of transfer of capital asset, expenditure incurred wholly and exclusively in connection with such transfer. The expenditure cannot be stated to be incurred wholly and exclusively in connection with such transfer - no error in order of Tribunal - In the result, the question is answered in the negative - decided against the assessee.
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