Deal cancellation compensation expense cannot be claimed from Capital Gain

Kodanda Ramaiah Varadhi Vs ITO (ITAT Visakhapatnam) Ld. A.R. argued that the assessee had entered into the agreement for sale of agricultural property with M/s. VPL Projects Pvt. Ltd. for a consideration of Rs.40 lakhs and received Rs.30 lakhs on 10.1.2007, which was paid to the vendor of the impugned property. Subsequently, the sale transaction entered with M/s. VPL Projects Pvt. Ltd. could not be materialized, therefore, the assessee had to pay a sum of Rs. 6 lakhs towards compensation. Since the funds were utilized for the purpose of acquiring the property, the Ld. A.R. argued that the comp...