Tribunal grants indexation, full brokerage, solicitor fees, and tenant payment in partial Revenue appeal

The Tribunal allowed the assessee's claims for indexation benefits from 1981, full brokerage, and partial solicitor fees. It also allowed the full payment to the tenant for vacating the premises. The Revenue's appeal was partly allowed.

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Issues Involved:
1. Entitlement to indexation benefits from 1981.
2. Deduction of expenses incurred on transfer of property.
3. Allowability of payment to tenant for early termination of Leave and Licence.

Summary:

Issue 1: Entitlement to Indexation Benefits from 1981
The Revenue challenged the indexation benefits allowed from 1981. The assessee claimed the cost of acquisition from 1981, supported by a valuation report. The AO agreed to the cost but limited the indexation to the year the assessee became the owner (2008), citing CBDT Circular No.636. The CIT(A) followed the Bombay High Court decision in CIT vs. Manjula J Shah (355 ITR 474), allowing indexation from 1981. The Tribunal upheld this, dismissing Revenue's ground, stating the indexed cost of acquisition should be computed from the year the previous owner first held the asset.

Issue 2: Deduction of Expenses Incurred on Transfer of Property
The assessee claimed deductions for brokerage, solicitor's fees, and amounts paid to the occupier. The AO allowed an ad-hoc 2% of the sale consideration, amounting to Rs.37,00,000/-, and disallowed specific expenses, including CA fees and valuation fees. The CIT(A) allowed full deductions for brokerage and solicitor fees, stating the AO accepted the genuineness of expenses. The Tribunal found the brokerage of Rs.42,36,500/- fully allowable, given the services rendered. For solicitor fees, the Tribunal allowed Rs.18,07,258/-, considering the relevant services related to the property transfer.

Issue 3: Allowability of Payment to Tenant for Early Termination of Leave and Licence
The assessee paid Rs.10,00,000/- to the tenant for early termination of the agreement to vacate the premises. The AO allowed Rs.3,61,452/- on an ad-hoc basis. The CIT(A) held the payment necessary for the transfer of the property. The Tribunal agreed, directing the AO to allow the full Rs.10,00,000/- as a deduction.

Conclusion:
The Tribunal allowed the assessee's claims for indexation from 1981, full brokerage, and partial solicitor fees. It also allowed the full payment to the tenant for vacating the premises. The Revenue's appeal was partly allowed.

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