1. The learned Counsel for the assessee submitted that the land, in question, was near Musi river and in the illegal occupation of five people who were cultivating the land since long and refused to vacate the same inspite of the assessee’s husband and his brothers selling the property to M/s. Metro Cash & Carry India Pvt. Ltd. In order to hand over the peaceful possession of the property to the purchaser, the assessee’s husband had to pay certain amounts to the occupants and the same was claimed as expenditure. The learned Counsel for the assessee submitted that at least the expenditure in support of which, the affidavits have been filed may be allowed as an expenditure. Similarly, with regard to the payment made to the village elders, he prayed that it is a common practice that the village elders are settling such disputes and are paid some amounts towards village development activity. Therefore, according to him, all these expenditure is for transfer of the property and is to be allowed as expenditure in relation thereto.
2. The learned DR however, relied upon the orders of the authorities below.
3. Having regard to the rival contentions and the material on record, we find that the undisputed facts are that the assessee’s husband along with his brothers has sold the land to M/s. Metro Cash & Carry India Pvt. Ltd, Bangalore and has gained LTCG therefrom. As regards the expenditure claimed by the assessee for getting the illegal occupants evicted from the land, the AO has accepted the payment to one of the occupants of the land, since he was produced before him. Therefore, it is clear that the land was not in peaceful possession of the assessee’s husband and AO has accepted this fact. The assessee has claimed that she has claimed to have paid to 5 persons out of which, payment to one person has been allowed. The disallowance of payment to others is on the ground that the assessee has not been able to produce those parties for cross verification. No doubt, the onus is on the assessee to produce the parties. We find that the assessee has filed the affidavits of two persons but the AO has not accepted the same but also has not held that the payment is genuine. Therefore, to the extent of payment which is supported by affidavits, we direct the AO to allow the same. Similarly it is also not uncommon that village elders intervene and settle the land disputes to safeguard the law and order and protect the peaceful atmosphere of the village. The assessee has claimed to have paid for the village development. Therefore, we direct that 50% of the claim i.e. up to Rs.1.50 lakhs be allowed. The assessee gets relief accordingly.