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2015 (9) TMI 999 - AT - Income TaxDisallowance of deduction of compensation paid to the tenant against capital gain within the ambit of section 48 - Held that:- There was clear cut clause in the agreement that on 30th November, 2000, the tenant will hand over the business asset to the assessee. It has not been shown before us that the assessee had entered into a further such agreement or such an agreement subsisted at the time of selling of the property. As noted by the CIT(A) before the date of the agreement of sale with the third party, the assessee already entered into a cancellation of tenancy agreement and paid the amount of compensation. This amount of compensation is definitely far high and excessive without bringing any material on record to show that how the tenant has been put to adverse situation or a huge loss have suffered to the tenant or tenant could have dictated the term for seeking such a huge compensation for vacating the premise. This is more so here in this case when the main Director of both the companies is common. Under facts and circumstances as noted by the AO & CIT(A), we find that such a compensation amount paid by the assessee cannot be claimed as deduction while computing the long-term-capital-gain, therefore, finding given by the CIT(A) is confirmed and accordingly ground raised by the assessee are dismissed. - Decided against assessee. Disallowance of interest - Held that:- The assessee’s interest income has already been held to be taxable under the head “income from other sources” and whatever amount which are attributable or is having direct nexus for earning of interest income has been allowed by the Assessing Officer. Over and above, we are of the opinion that so far as office expenses, telephone expenses and other expenses which are necessary for maintaining of corporate office, the same can be held to be allowable. Looking to the fact that overall interest income is less as compared to the expenditures claimed, therefore, in the interest of justice, we feel that out of the balance administrative expenses (after the disallowance by the Assessing Officer as well as CIT(A) at ₹ 7,48,108/-), we further allow the expenses of ₹ 2 lakhs, which can be held to be sufficient for the earning of the interest income. Accordingly, the balance amount of expenses of ₹ 5,46,000/- is confirmed - Decided partly in favour of assessee.
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