Agreed seller-borne stamp duty and registration charges may qualify as transfer expenses when computing capital gains.

Stamp duty and registration charges borne by the seller under the agreed terms of a property sale may be treated as transfer expenses when computing capital gains. The allocation of these charges depends on the mutually agreed terms of the transaction, and there is no absolute rule requiring the buyer to bear them in every case. Where payment is supported by challans and properly accounted for, the expenditure is neither voluntary nor gratuitous, but forms part of the agreed cost of facilitating the transfer. Accordingly, seller-borne stamp duty and registration charges may be allowed as deductible transfer expenses in capital-gains computation.

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Issues: Whether stamp duty and registration charges borne by the seller pursuant to the sale agreement are allowable as transfer expenses in computing capital gains.

Analysis: The sale agreement provided that the seller would bear the stamp duty and registration charges. The payment was supported by challans and the settlement of the assessee's share with the co-owner. Transfer expenses are governed by the mutually agreed terms of the property transaction, and there is no absolute rule that such charges must always be borne by the buyer. The expenditure was therefore not voluntary or gratuitous but formed part of the agreed cost of facilitating the transfer.

Conclusion: Stamp duty and registration charges of Rs. 43,69,849 borne by the assessee are allowable as transfer expenses for computing capital gains.

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