TaxTMI 
TaxTMI 
2004 (10) TMI 34
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....bunal was justified in holding that the assessee is liable to pay capital gains tax on a share of 25 per cent, of the total sale consideration in respect of property No. 22, Darya Ganj, New Delhi? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was not entitled to deduction under section 48 of the Income-tax Act, 1961, in respect of the amount claimed to have been paid and received by Shri B.N. Soi from the sale proceeds of property No. 22, Darya Ganj, New Delhi?" So far as question No. 1 is concerned, it refers to transfer of a property bearing No. 22, Darya Ganj, New Delhi. The sale deed of this property which was executed on May 30,1994 is at page 93 of the paper bo....
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.... the said property in entirety. The said award was made a rule of the court by an order dated April 17,1965. The assessee, thereafter in 1968, threw this property in to the hotch potch of Shri Ashok Soi, Hindu undivided family of which he was the karta. The vendors-party No. 1 only were the members of the said Hindu undivided family. The recitals further indicate that the said Shri Ashok Soi remained the owner of the aforesaid entire built-up property with its roof with free-hold underneath admeasuring about 3,085 sq. yds. etc. (It should, however, have been indicated that after 1968, Shri Ashok Soi held the property as karta). The recitals further indicate that in view of the disputes raised by Smt. Bulbul Soi, a suit bearing Suit No. 180 ....
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....3% (3) Plaintiff No. 3 24.2/3% (4) Defendant No. 1 16.2/3% (5) Defendant No. 2 12%" It is specifically stated therein that the payment to defendant No. 2 (in the said suit), namely, Shri B.N. Soi, the confirming party and the father of the assessee, as aforesaid was to be made in full and final settlement of all his claims. Reading the aforesaid clause, it is clear that son, daughter-in-law and grand sons agreed to pay something out of their shares of the sale proceeds to the confirming party not because he was the owner of the property but towards settlement of his claims and no further. The sale deed at page 96 of the paper book also clearly indicates that the vendors-party No. 1 are the absol....
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....s. under the sale henceforth after the execution/registration of this 'sale deed'." Reading this document, it is very clear that the deed was executed by vendor-party No. 1, namely, the assessee, his wife and their two sons and it is they who have conveyed the title of the property in favour of the vendee. There is nothing to indicate that the father of the assessee conveyed anything to the vendee. He was merely a confirming party as indicated in clause (10) which reads as under: "(10) that the 'confirming party/party No. 3' shall have no objection in the sale of the aforesaid property thus have joined/signed this 'sale deed' in token of acceptance in the sale of the aforesaid property." At this juncture, it is also required to be noted ....
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.... We are in agreement with the views expressed by the Tribunal that the capital gain is required to be computed on the basis of equal shares of the owners. Therefore, the answer of question No. 1 is required to be given in favour of the Revenue and against the assessee. So far as question No. 2 is concerned, learned counsel submitted that the amount paid to Shri B. N. Soi by the assessee was in the nature of expenditure incurred wholly or exclusively in connection with such transfer and, therefore, would be entitled to get the deduction under section 48(i) of the Act. It would be considered as an expenditure wholly and exclusively in connection with the transfer. The amount was required to be paid in view of the statement made by the family....