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TMI Blog2001 (7) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee, the following question has been referred for the opinion of this court under section 256(1) of the Income-tax Act, 1961 (for short 'the Act") by the Income-tax Appellate Tribunal, Delhi Bench "A", New Delhi (in short "the Tribunal") "Whether, on the facts and in the circumstances of the case, the interest of Rs. 13,630 paid by the assessee on the delayed payments of unearned incre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opment Officer (in short "the LDO") for permission to transfer the leasehold rights. In terms of her letter dated july 30, 1970, the LDO by letter dated November 17, 1970, indicated that the permission to sell the leasehold rights could be granted if the assessee was willing to pay to the Government unearned increase amounting to Rs. 4,54,319 within thirty days from the date of issue of the letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pay to the LDO to get a permission to transfer the leasehold rights, was allowable. It was also submitted that the expenditure was incurred in connection with the transfer and as such was admissible under section 48(i) of the Act. The stand of the Revenue was that payment of interest was simply for delayed payment of the unearned increase and, therefore, could not be treated to be a part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. Section 48(i) of the Act at the relevant point of time read as follows : "48. Mode of computation and deductions.-The income chargeable under the head 'Capital gains' shall be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely : (i) expenditure incurred wholly and exclusively i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transfer it does not qualify for deduction unless it is wholly and exclusively in connection with the transfer. The Tribunal was, therefore, right in its conclusion that the payment of interest was in the shape of damages for late payment of unearned increase. That being so, the interest paid cannot be treated as expenditure incurred wholly and exclusively in connection with the transfer. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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