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Cost of Acquisition-Capital Gain

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Mr. X has got a land and he wants to sell the land. But some part of land is acquired by Anti-Social elements and rest by poor people constructing the huts. To vacate the land Mr. X incurs certain expenditure. Can he claim the same as expenses in connection with transfer???? Give me cross refrence of Section as well as case if any.....

Replies (2)

CA Dhiraj Ramchandani

CA M. com

10823 Points Joined November 2008

I think such expenses is not allowable...

But let others reply too

Amir

Learner

4016 Points Joined December 2009

Dear Dhruvesh,

Bhai I hope u r not playing with us like Balaji Bhai does.........:)

Compensation paid to tenants for vacating premises - Where the assessee sold a property to the Bombay Municipal Corporation, and paid compensation to the hutment dwellers for vacating the land, the amount so paid was allowable as ‘cost of improvement’ in the computation of capital gains, since by eviction of the hutment dwellers the value of the land increased - CIT v. Miss Piroja C. Patel [2000] 242 ITR 582 (Bom.).