| COURT: | ITAT Mumbai |
| CORAM: | Amit Shukla (JM), D. Karunakara Rao (AM), G. S. Pannu (VP) |
| SECTION(S): | 45, 48, SARFAESI Act |
| GENRE: | Domestic Tax |
| CATCH WORDS: | application of income, capital gains, cost of acquisition, Diversion of income by overriding title, mortgage, SARFAESI Act |
| COUNSEL: | Aarti Sathe, P.J. Pardiwalla, Sunil Hirawat |
| DATE: | September 5, 2019 (Date of pronouncement) |
| DATE: | October 5, 2019 (Date of publication) |
| AY: | 2010-11 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 48 Capital Gains: The payment towards discharge of outstanding loan liability out of the sale proceeds of mortgaged property is a mere application of income and not a diversion of sale proceeds by overriding title. The assessee cannot claim such application as deduction for the purpose of computing Capital Gain in terms of s. 48 of the Act. The legal position prevailing prior to SARFAESI Act is also germane even after the enactment of SARFAESI Act | |
I thus agree with the view taken by the learned Judicial Member that the consideration from sale of property to the extent of principal component of loan adjusted by the bank cannot be treated as ‘diversion of income by overriding title’ and was thus not deductible from the total consideration accrued to the assessee from sale of property. In my considered opinion, so far as the instant dispute is concerned, the legal position prevailing prior to SARFAESI Act is also germane even after the enactment of SARFAESI Act
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