| Question And Answer | |
|---|---|
| Subject: | Whether payment to unauthorised occupant for vacating the land is allowable as deduction as cost of improvement ? |
| Category: | Income-Tax |
| Querist: | ca vinay v kawdia |
| Answered by: | Research Team |
| Tags: | Capital Gains, cost of improvement, payment to unauthorised occupant |
| Date: | May 19, 2021 |
Whether payment made to the tenant for vacating the land in his possession just before its sale is allowable as cost of improvement or expenditure incurred in connection with transfer. Whether the position would be different if the tenant is in the nature of unauthorised occupant of land?
In CIT v. Eagle Theatres (2012) 205 Taxman 449 (Delhi)(HC) the Court held that the amount paid to tenant for vacating the premises is allowable as deduction while computing the capital gains In CIT v. Mohd. V. Shaffiulla (2012) 210 Taxman 613(Karn.)(HC) the Court held that the payments to remove slum dwellers held to be allowable against short term capital gains The burden is on the assessee to show the genuineness , if the tenant is in the nature of unauthorised occupant of land does not make any difference .