Interest paid for loan taken to pay compensation as part of family arbitration award cannot be claimed as deduction u/s 48

Sanjay Atchut Poy Raiturcar Vs ITO (ITAT Panaji)

ITAT Panaji held that payment of interest on loan taken for paying compensation to the family members of the assessee pursuant to an arbitral award on family settlement has nothing to do with LTCG on sale of the said capital asset. Accordingly, payment of such interest cannot be claimed as deduction u/s 48.

Facts- AO made a single addition towards disallowance of interest claimed against the capital gains amounting to Rs.20,55,704/- in the hands of the

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