The assessee paid \u20b92 crore to a society having a subsisting claim over the title of the property under a settlement agreement to remove the encumbrance and complete the sale. The Tribunal held that the payment was incurred wholly and exclusively in connection with the transfer and was allowable as a deduction under section 48. The purchaser directly paid \u20b97 crore to banks to discharge the mortgage created over the property by the assessee as guarantor. The Tribunal held that the amount never accrued to or was received by the assessee because of the overriding title of the banks. Accordingly, it could not be taxed as sale consideration and was allowable as a deduction while computing capital gains under section 48.\u00a0 \u00a0(AY. 2020-21).<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 48: Capital gains-Mode of Computation-Payment made to settle a rival title claim and remove an encumbrance is deductible while computing capital gains. Amount directly paid by the purchaser to banks for discharge of mortgage is deductible and cannot be taxed in the hands of the assessee. [S. 45, 48(1)] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[21],"tags":[],"class_list":["post-62247","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-gbZ","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/62247","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=62247"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/62247\/revisions"}],"predecessor-version":[{"id":62248,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/62247\/revisions\/62248"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=62247"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=62247"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=62247"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}