Dcit., Circle-16(1), Hyderabad, ... vs Shri Y Harish Chandra Prasad, Hyderabad on 31 August, 2017
For the sake of clarity, we reproduce the ratio laid down by the
Hon'ble Court, which is as under:
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The Commissioner Of Income-Tax vs M/S.Bradford Trading Company (P) Ltd on 18 September, 2002
V.Lakshmi Reddy vs The Income Tax Officer on 15 November, 2010
In fact, in the decision relied upon by the appellant, the distinction in respect of point of law has been decided by this Court relating to the claim for deduction of money paid against the discharge of mortgage by the vendee, as decided in CIT vs. Vajrapani Naidu reported in (2000) 241 ITR 560, wherein the decision of the Supreme Court in Arunachalam vs. CIT reported in (1997) 227 ITR 222 came to be followed, was distinguished by making a specific reference to the facts involved in the case covered by 261 ITR 222 (Commissioner of Income-tax vs. Bradford Trading Co. Ltd.
Shri K.Srikanth, Chennai vs Acit, Chennai on 19 May, 2020
It was submitted by learned CIT-DR
that the decision of Hon'ble Madras High Court in the case of Bradford
Trading Company Private Limited(supra) is different and not applicable to
the facts of the case in the instant case. It was submitted that approbation
and reprobation is not allowed as in the original return of income filed with
the department , the assessee has declared sale consideration to the tune
of Rs. 15 crores while it was claimed at Rs. 12 crores in the return of
income pursuant to orders passed by Hon'ble Madras High Court in writ
proceedings. It was submitted that sale consideration was not considered
at Rs. 15 crores by the AO but was considered at Rs. 12 crores and hence
learned CIT had rightly invoked proceedings u/s 263 of the 1961 Act and
brought to tax remaining Rs. 3 crores.
Renu Agarwal, Agra vs Assessee on 28 December, 2012
In this case, it is held by the Bombay High Court that the expression
used in Section 48 of the Act, viz., "expenditure incurred wholly and
exclusively in connection with such transfer" has wider connotation than the
expression, "for the transfer". Similar view has been taken by the Madras
High Court in the case of Commissioner of Income Tax vs. Bradford
Trading Co. P. Ltd. [261 ITR 222].
Zarah Rafique Malik,Mumbai vs Ito (Int Tax) Ward-3(2)(1), Mumbai on 10 March, 2026
The Madras Court in CIT Vs Bradford Trading Co. (P) Ltd 261 ITR 222, was
concerned with the allowability of an amount paid to get over difficulties in the
sale of the property. The court holds that unless such amount was paid, the
transfer of property could not have taken place and hence such payment has an
intimate connection to the transfer of the asset. Payment of the amount to end
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ITA 5159/Mum/2025
Zarah Rafique Malik
the litigation in respect of the property concerned was purely in the interests of
the assessee. Hence such expenses are allowable under section 48 of the act.
Deputy Commissioner Of Income Tax ... vs M/S A M Builders And Developers , ... on 6 April, 2023
ix. Miss Dhun Dadabhoy Kapadia v. CIT (1967) 63 ITR 651 (SC)
x. CIT v. Bradford Trading Co. (P.) Ltd. (2003) 261 ITR 222 (Mad.)
5.5 The ld. A.R. submitted that if the compensation was not paid,
then the assessee could not have sold the property to M/s. Titan
Company Ltd. The compensation paid paved an easy path for the
assessee to enable the transfer of the property to its desired
purchaser. It was an obligation cast on the assessee to ensure that
the property transferred is free of encumbrance and transfer a good
title to the purchaser. Therefore, the amounts paid towards the
cancellation of the agreements were essential for the transfer is
wholly and exclusively incurred in connection with the transfer of
property and consequently, the same is required to be allowed as cost
as per the provisions of section 48 of the Act. In so far as the
submission of the learned Department representative is concerned,
the ld. A.R. submitted that the authorities filed are in respect of
encumbrance created by way of mortgage, which is not the case of
the respondent assessee and thus is not applicable.
Kaushalya Devi (Deceased) Through ... vs Commissioner Of Income Tax on 20 April, 2018
Calcutta High Court followed the judgment of the Bombay High
Court in Shakuntala Kantilal (supra) and Madras High Court in Bradford
Trading Company Private Limited (supra).
Digivision Electronics Ltd., Chennai vs Assessee
8. Before the ld. CIT(A), the assessee contended that the said
expenditure should be construed as an expenditure in connection
with transfer of property and relying on the decision of the Hon'ble
Madras High Court in the case of CIT Vs. Bradford Trading Company
P. Ltd. reported in 261 ITR 222 [Mad] submitted that cost of
removing an encumbrance is a deductible cost unless it is self
created.
Jamshed Ali Molla, Kolkata vs Acit, Circle-30, Kolkata, Kolkata on 16 November, 2018
Mr. Bharadwaj, learned Advocate appearing for the assessee/respondent, has drawn
out attention to a judgment of the Madras High Court in the case of Commissioner of
Income Tax vs. Bradford Trading Company Private Limited, reported in 2003 (261) ITR
222 (Madras). An almost identical situation had arisen before the Madras High Court.
The facts briefly were that the assessee had entered into an agreement with one Buhari,
agreeing to allow the latter to participate in the hotel business. The assessee
subsequently sold the hotel to ITC and settled the matter with Buhari at a sum of Rs. 2
lakhs. The Madras High Court following an earlier judgment of the Bombay High
Court, held as follows:
Acit, Ajmer vs Rekha Sharma, Ajmer on 23 July, 2019
He has also relied upon the decision in case of CIT Shakuntala Kantilal
190 ITR 56 as well as the decision of Hon'ble Madras High Court in case
of CIT vs. Bradford Trading Co. Pvt. Ltd. 261 ITR 222 and submitted
that the Hon'ble High Courts have taken a consistent view that the
amount paid for removing encumbrance and settlement of claim is
expenditure incurred in connection of transfer of capital assets
4
ITA No. 945/JP/2016
ACIT vs. Smt. Rekha Sharma
deductable U/s 48 of the Act. He has supported the order of the ld.
CIT(A).