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2014 (3) TMI 58 - AT - Income TaxDisallowance as deduction while computing LTCG - Expenditure incurred in connection with the transfer – elocation of hutment dwellers - Held that:- The genuineness of payment has not been disputed by the authorities below and even the purpose of payment is also not question by the AO as well as CIT(A) - The disallowance has been made on the ground that the transfer/development agreement does not speak about such payment - When the payment is undisputedly made towards relocation of hutment dwellers then it is certainly for the purpose of removing the encumbrances in the title of the owners in respect of the land in question – it is obligatory on the part of the owners/transferers of the land to ward off any charge and encumbrances arises in the property –thus, there was no substance in the argument of the revenue that in the absence of any specific mention in the agreement such payment is not allowable deduction - The payment has been made for removal of encumbrances in respect of the property in question being relocation of the hutment dwellers - this falls under the category of expenditure incurred in connection with transfer of the property – Decided in favour of Assessee. Benefit of indexation of cost of acquisition – Held that:- The decision in CIT Vs Manjula J. Shah [2011 (10) TMI 406 - BOMBAY HIGH COURT] followed – The AO has not disputed the fact that the property in question has been inherited by the assessee from his father - for the purpose of determine the indexed cost of acquisition it has to be computed by applying the deeming fiction contained in Explanation 1(i)(b) to Section 2(42A) as well as provisions of section 49(1) of the Income Tax Act - thus, the order of the CIT(A) set aside – Decided partly in favour of Assessee.
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