Compensation paid to tenant for vacation of land allowable as deduction from Capital Gains

Trimm Exports Private Limited Vs DCIT (Karnataka High Court) The issue which arises for consideration in this appeal is whether an amount of Rs.1 Crore paid as compensation by the appellant to the lessee can be claimed as expenses incurred in connection with transfer of the capital asset. The assessee was the owner of land measuring 1,07,810 square feet. Out of the aforesaid land, the assessee had executed a lease deed in favour of the lessee on 22.02.1996 for a period of 40 years in respect of land measuring 29,845 square feet. The assessee in the previous years had offered income to tax unde...