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2012 (10) TMI 666 - ITAT HYDERABADScope of 'Transfer' u/s 2(47)(v) - chargeability of capital gains in respect of the land not 'transferred' but only given for development - Held that:- In present case, owners have entered into an agreement for development of the property and certain rights were assigned to the developer who in turn had made the substantial payment and consequently entered into the property and thereafter if the transferee has taken steps in relation to construction of the flats, then it is to be considered as transfer u/s. 2(47)(v). The fact that the legal ownership continued with the owners to be transferred to the developer at a future distant date really does not affect the applicability of S2(47)(v). If the transferee was undisputedly willing to perform its part of the contract, and if the possession and control of the property is already vested with the transferee and the impugned development agreement has been duly acted upon and it is still in operation, it has to be decided that there is a transfer u/s. 2(47)(v). Entering into the property and handing over of the possession was instantaneous thus entire conspectus of the case has attracted the provision of S. 45 on fulfilment of conditions laid down in section 53A of the Transfer of Property Act. Accordingly, issue relating to transfer of property u/s. 2(47)(v) is decided in favour of the Department See Chaturbhuj Dwarkadas Kapadia of Bombay v. CIT [2003 (2) TMI 62 - BOMBAY HIGH COURT ] Dis-allowance of interest expenditure on ground of fund being used for non-business purpose – diverted to sister concern - Held that:- Once the assessee claims any such deduction in the books of accounts, the onus will be on the assessee to satisfy the Assessing Officer that whatever loans were raised by the assessee, the same were used for business purposes. There should be nexus of use of borrowed funds for the purpose of business to claim deduction under Section 36(1)(iii). That being the position, there is no escape from the finding that interest being paid by the assessee to the extent the amounts are diverted to sister concern on interest free basis are to be disallowed – Decided against assessee.
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