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2017 (12) TMI 1259 - AT - Income TaxComputation of capital gains - claim of compensation to tenants as allowable expenditure u/s. 48(1) - Held that:- Assessee has paid certain amounts by way of cheque and certain amounts withdrawals from bank, much before the assessment year, the facts of which was also confirmed during the course of survey in the statements. Therefore, payment to tenants cannot be doubted. To that extent, we are not in agreement with the order of Ld.CIT(A), wherein he did not allow the amount stating that the agreements were entered in 18-07-2007 and there was no basis for claiming the expenses as compensation paid to tenants in the year 2009. If capital gains are to be taxed in the AY. 2008-09 on the basis of the sale agreement, the compensation could not have been paid, but assessee would be within her rights to claim that as a deduction from the sale value. Since assessee offered capital gains in the impugned assessment year [the actual sale is in the next assessment year and agreement of sale in previous assessment year] then, the compensation paid to tenants in the year 2009 would be relevant claim in AY. 2009-10. Looking at any aspect, the claim of compensation to tenants is allowable expenditure u/s. 48(1). Therefore, reversing the findings of CIT(A), since the capital gains were taxed in the impugned assessment year, the claim is allowable in this assessment year. For the reasons stated above, assessee’s grounds are allowed. Coming to Revenue appeal, as seen from the facts of the case, assessee has not sold the property ultimately. GPA holder registered the document and difference in price was accounted by the company as ‘income’. On that reason, the order of CIT(A) cannot be faulted and there is no merit in Revenue’s contentions. Like-wise, the payments of commission to the parties is also established and nothing was brought on record to counter the findings of Ld.CIT(A) on the issue. Even with reference to indexed cost of acquisition, it is purely a matter of fact and Ld.CIT(A) has analysed in detail in para 8.4 and 8.5 of the order which was extracted above. The entire order was passed by CIT(A) after giving due opportunity to AO on all the issues and after obtaining a report through the Addl.CIT, Range-11, Hyderabad, being forwarded on 23-07-2013. When due opportunity was given to AO, it is not understandable how Revenue could contend that CIT(A) has not given opportunity under Rule 46A. We do not find any merit in any of the grounds raised by Revenue, accordingly all the grounds of Revenue are rejected.
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