What is expenditure on transfer?
Expenditure incurred wholly and exclusively in connection with the transfer of a capital asset is deductible from full value of consideration. The expression “expenditure incurred wholly and exclusively in connection with such transfer” means expenditure incurred which is necessary to effect the transfer. Examples of such expenses are brokerage or commission paid for securing a purchaser, cost of stamp, registration fees borne by the vendor, traveling expenses incurred in connection with transfer, litigation expenditure for claiming enhancement of compensation awarded in the case of compulsory acquisition of assets. One should also keep in view the following propositions:
- Vague claim for expenses is not allowable
- Expenditure in connection with transfer need not necessarily have been incurred prior to passing of title.
- If a sum has already been subject-matter of deduction under other heads, the same cannot be allowed as deduction under section 48.