1998 (10) TMI 39

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....he question referred to us at the instance of the Revenue is as follows : "Whether, on the facts and in the circumstances of the case, the amount paid for discharging the debts due on mortgage of the property in connection with the transfer of the property should be deducted in computing the capital gains arising from the transfer of the property?" The assessee who is an individual sold the ....

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....wholly and exclusively in connection with the transfer under section 48 of the Act was deductible. The Tribunal held that what has to be kept in view was the concept of real income and if the assessee had lost part of the income because of the burden on the property, it is only the benefit that was actually received by the assessee that would go into the computation of capital gains. That view ....

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....akes the payment directly to the mortgagee, instead of the vendor doing so, after receiving the money from the vendee, does not make any difference for the purpose of determining consideration for the sale and the extent of capital gain. The Supreme Court in the case of RM. Arunachalam v. CIT [1997] 227 ITR 222, had an occasion to consider the question as to whether the sum paid by the assessee....

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.... his acquiring the same." It is undisputed that in this case, a mortgage had been created by the vendor-assessee and the amounts paid to the other creditors by the vendee was for the discharge of the debts which had been incurred by the assessee. The amount was paid as part of the consideration to the sale. The distinction that was sought to be made by the Tribunal between the case where the mo....