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2015 (3) TMI 979 - AT - Income TaxRevision u/s 263 - gains arising out of the sale of property was required to be offered for tax as per special provisions of section 50A of the Act and not as long-term capital gain as offered by the assessee - deduction of ₹ 31.05 crores wrongly claimed in the computation was also required to be disallowed - Held that:- A perusal of the assessment order clearly shows that the assessee is offering income under the head "income from house property". The assessee is claiming depreciation only on 1/6th portion which was used by it as its office and the remaining 5/6th portion lease rental income is offered under the head "income from house property". The assessment order clearly shows that the Assessing Officer has thoroughly examined this fact and has also made an addition of ₹ 4,31,298 under the head "income from house property". Now, coming to the claim of deduction as cost of improvement, the hon'ble jurisdictional High Court in CIT v. Shakuntala Kantilal [1991 (3) TMI 123 - BOMBAY High Court] has held that the expenditure incurred in removing encumbrances to transfer is deductible under section 48 of the Act. The court has observed that in so far as clause (i) of section 48 is concerned, the expression used by the Legislature in its wisdom is "the expenditure incurred wholly and exclusively in connection with such transfer". The expression "in connection with such transfer" is wider than the expression, "for the transfer". The High Court further observed that any amount the payment of which is absolutely necessary to effect the transfer will be an expenditure covered by this clause. Thus, the allowability of the claim of deduction is also supported by the judicial decision. Thus view of the learned Commissioner is also not correct because the Tribunal, Mumbai Bench, in Chemosyn Ltd. v. Asst. CIT [2012 (9) TMI 804 - ITAT MUMBAI] has allowed the expenditure incurred by the company towards purchase of its own shares at premium from minority group as per the directions of the Company Law Board as business expenditure because the order passed by the Company Law Board is always considered to be in the interest of company and not in the interest of shareholder/family members same as in the present case wherein Company Law Board directed that the petitioner should be given an option to go out of the company on return of her investment in the shares of the company, if she desires company/respondent should purchase the shares on valuation to be made by an independent valuer based on the balance-sheet of the respondent-company as on March 31, 1982 in case the petitioner is willing to go out of the company, then on an application made by her, a valuer will be appointed by this Board in consultation with both parties. Thus the observations of the learned Commissioner that the expenditure incurred for payment to shareholders are not deductible in any other manner is also incorrect in the light of the above decision of the Tribunal. Thus set aside the impugned order passed by the learned Commissioner under section 263 and restore that of the Assessing Officer passed under section 143(3) of the Act. - Decided in favour of assessee.
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