1980 (3) TMI 79

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....respondent) by the impugned order (Ex. P-3) held that the petitioner was not entitled, in computing the capital gains, to deduct the expenditure incurred by him for the purpose of prosecuting in a civil court his claim for enhancement of the compensation. The Commissioner held that such expenditure was not incurred in connection with the transfer of a capital asset. Section 45 of the I.T. Act, ....

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....ure incurred wholly and exclusively in connection with such transfer ; ....... In computing the capital gains, the expenditure incurred wholly and exclusively in connection with the transfer cf the capital asset has to be deducted. The question is whether the expenditure incurred for the purpose of litigation pursuant to a reference under s. 20 of the Land Acquisition Act is an expenditure whol....

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....cope of s. 48(1) of the I.T. Act. But if the expenditure was incurred subsequent to the transfer, s. 48(1) will have no application. In other words, what is important in terms of s. 48(1), according to counsel, is the time at which the expenditure was incurred. In answer to this seemingly technical contention, Shri C. N. Ramachandran, appearing for the petitioner, has brought to my notice the d....

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....cess of transfer by compulsory acquisition is completed only upon the determination of the compensation. If the amount awarded by the Collector is accepted by the owner without question, the proceedings come to an end. If, however, the owner challenges the award, the question disputed, namely, the amount payable, will have to be determined judicially. It is only upon a final determination of that ....