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TMI Blog1982 (1) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... s case for assessment years 1969-70 and 1970-71 ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the payments made to the two former tenants, M/s. Dunlop India Ltd., and M/s. Harrison and Company, should be allowed as deductions in the computation of capital gains as an expenditure incurred wholly and exclusively in connection with the transfer of the capital asset within the meaning of section 48(i) of the Income-tax Act, 1961 ? 3. Whether, on the facts, and in the circumstances of the case, the Tribunal was right in holding that the assessee's share in the marriage expenses of his sister cannot be allowed as a deduction in the computation of capital gains of the proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoked the provisions of s. 52(2) of the Act, and substituted for the actual amount realised, on the sale of the properties, the fair market value of the properties. He then worked out the capital gains assessable to tax, on the difference between the cost of the properties and their market value at the time of sale. The Tribunal, on appeal, held that s. 52(2) does not enable the ITO to disregard the reality of the consideration for the transfer of a capital asset merely on the score that it is less than what the ITO regards as the fair market value of the property on the date of sale. According to the Tribunal, s. 52(2) can be invoked only in cases where there is a clear understatement of the sale price in the document, that is to say, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as paid and the tenants vacated the properties, and in turn vacant possession was rendered by the assessee to the purchasers. In the assessment to capital gains on the sale of the properties in question, the assessee claimed that the payments made by them to the tenants in order to secure vacant possession was expenditure incurred wholly and exclusively in connection with the transfer of the properties, within the meaning of s. 48(i) of the Act. The Tribunal upheld this claim in appeal. The department's contention is that this item of expenditure cannot come in for reckoning under s. 48(i). We do not accept this contention as well founded. The finding of the Tribunal is that the purchasers of the property from the assessees insisted on va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ITO on the main ground that there was nothing in the partition deed under which the provision of Rs. 25,000 towards the marriage expenses of the assessees' sister was to be a charge on any of the items of properties, allotted to the assessees. On a reference to the partition deed, what the Tribunal says is correct. But we would not like to uphold the decision of the Tribunal on this ground alone. There is a more pertinent ground for the disallowances. The claim of the assessees to deduct the provision for the marriage expenses of the sister, as an admissible item of expenditure, has been put forward on the terms of the partition deed, and not under any specific statutory provision relating to the taxation of capital gains. Section 48 c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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