Capital gain

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 February 2016 sir ,
whether amount paid to tenant to vacate the premises will amount to cost of improvement for capital gain purpose? If yes, then whether indexation of the same is aalowed??
Thanx in advance

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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01 February 2016 It is not cost of improvement but an 'expenditure incidental to sale' which can be deducted from sale consideration while computing capital gains.
Inference- Naozar Chenoy Vs. CIT [1998] 234 ITR 95 [AP].

But Karnataka High Court said it is 'cost of improvement'. Citation - Mrs. June Perrett Vs.. ITO (2008) 298 ITR 268.

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