V.S.M.R.Jagadish Chandran v. CIT

227 ITR 240Supreme Court of India1997#7757 most cited

What is V.S.M.R.Jagadish Chandran v. CIT authority for?

Where a successor discharges a mortgage created by a previous owner, the amount paid to clear the mortgage debt is considered the cost of acquiring the mortgagee's interest in the property, deductible as the cost of acquisition under section 48 of the Income-tax Act.

14

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2011 to 2026.

Also referred to as

V.S.M.R. Jagadish Chandran v. CIT · 227 ITR 240 · SC · 1997 · Section 48 · cost of acquisition · mortgage debt · mortgagee's interest · successor discharging mortgage

Sections most often in play

Section 143(2)Section 144BSection 48Section 139(4)Section 142(1)Section 143(3)Section 147Section 151

Judgments citing V.S.M.R.Jagadish Chandran v. CIT

Sivasundar Selvakumari, Chennai vs. ITO, Ncw-1(6), Chennai

In the result, the appeal of the assessee is allowed

ITA 3154/CHNY/2025[2016-17]Status: DisposedITAT Chennai04 Mar 2026AY 2016-17

Bench: Shri S.S. Viswanethra Ravi & Shri S. R. Raghunatha

For Appellant: Shri. G. Baskar, AdvocateFor Respondent: Shri. N. Balakrishnan, CIT
Section 139(4)Section 144BSection 147Section 194ISection 45

…the Assessee before us, the amount paid by the Assessee to clear that encumbrance has to be treated as part of cost of acquisition or cost of improvement under section 48/49 of the Act.” The finding of the Hon’ble SC in V.S.M.R. Jagadishchandran Vs.CIT(1997) 227 ITR 240 (SC) (Annexure-4) is also relevant to the case: “It has been held that where a mortgage was created by the previous owner during his time and the same was subsisting on the date of his death, the successor obtains only the mortgagor’s interest in the property and by discharging the mortgage debt, he acquires the mortgagee’s interest in the proper…

Incometax Officer, Ward-3(1), Visakhapatnam vs. Surendra Nath Gubbala, Visakhapatnam

ITA 482/VIZ/2024[2020-21]Status: DisposedITAT Visakhapatnam10 Oct 2025AY 2020-21

Bench: Us:

Section 143(3)Section 144BSection 48

…me income in the hands of the assessee. The Tribunal in its order had distinguished the judgments of the Hon’ble Supreme Court in the case of, viz. (i). V.S.M.R 40 ITA No.482/Viz/2024 & CO No.03/Viz/2025 Surendra Nath Gubbala Jagdishchandran Vs. CIT (1997) 227 ITR 240 (SC); and (ii). CIT Vs. Attli N. Rao (2001) 252 ITR 880 (SC). It was observed that in neither of those cases, the Hon’ble Apex Court was considering a situation pertaining to loss of a capital asset on account of a guarantee given for a third party loan. Rather, in both the said cases, the encumbrance was created by the owner of the capital asset…

M.Paramasivam, Coimbatore vs. ACIT Ncc-1, Coimbatore

In the result, the appeals filed by the assessees for the assessment

ITA 721/CHNY/2019[2014-15]Status: DisposedITAT Chennai23 Feb 2022AY 2014-15

Bench: Shri Mahavir Singh, Hon’Ble & Shri G. Manjunatha, Hon’Bleआयकर अपील सं./Ita Nos.719/Chny/2019 िनधा"रण वष" /Assessment Year: 2013-14

For Respondent: Mr. AR.V.Sreenivasan
Section 131Section 147Section 148

…hat "the decision of the Kerala High Court in the case of Smt. Thressiamma Abraham (1997) 227 ITR 802 (Kerala) relied upon by the appellant was no longer good law after the judgments of the Supreme Court in the case of V.S.M.R.Jagadish Chandran Vs. CIT (1997) 227 ITR 240" a. The said judgment of the H'ble SC is distinguishable in so far as that, in the said case, the Assessee created Mortgage of the Property for his own benefit; whereas here in this case the assessee only stood as Guarantor for the loans availed by the Company and did not get derive benefit and only LOST his property. 4. The Ld. CIT(A) has assu…

M.Paramasivam, Coimbatore vs. ACIT Ncc-1, Coimbatore

In the result, the appeals filed by the assessees for the assessment

ITA 720/CHNY/2019[2013-14]Status: DisposedITAT Chennai23 Feb 2022AY 2013-14

Bench: Shri Mahavir Singh, Hon’Ble & Shri G. Manjunatha, Hon’Bleआयकर अपील सं./Ita Nos.719/Chny/2019 िनधा"रण वष" /Assessment Year: 2013-14

For Respondent: Mr. AR.V.Sreenivasan
Section 131Section 147Section 148

…hat "the decision of the Kerala High Court in the case of Smt. Thressiamma Abraham (1997) 227 ITR 802 (Kerala) relied upon by the appellant was no longer good law after the judgments of the Supreme Court in the case of V.S.M.R.Jagadish Chandran Vs. CIT (1997) 227 ITR 240" a. The said judgment of the H'ble SC is distinguishable in so far as that, in the said case, the Assessee created Mortgage of the Property for his own benefit; whereas here in this case the assessee only stood as Guarantor for the loans availed by the Company and did not get derive benefit and only LOST his property. 4. The Ld. CIT(A) has assu…

P.Sulochana, Coimbatore vs. ACIT Ncc - 1, Coimbatore

In the result, the appeals filed by the assessees for the assessment

ITA 719/CHNY/2019[2013-14]Status: DisposedITAT Chennai23 Feb 2022AY 2013-14

Bench: Shri Mahavir Singh, Hon’Ble & Shri G. Manjunatha, Hon’Bleआयकर अपील सं./Ita Nos.719/Chny/2019 िनधा"रण वष" /Assessment Year: 2013-14

For Respondent: Mr. AR.V.Sreenivasan
Section 131Section 147Section 148

…hat "the decision of the Kerala High Court in the case of Smt. Thressiamma Abraham (1997) 227 ITR 802 (Kerala) relied upon by the appellant was no longer good law after the judgments of the Supreme Court in the case of V.S.M.R.Jagadish Chandran Vs. CIT (1997) 227 ITR 240" a. The said judgment of the H'ble SC is distinguishable in so far as that, in the said case, the Assessee created Mortgage of the Property for his own benefit; whereas here in this case the assessee only stood as Guarantor for the loans availed by the Company and did not get derive benefit and only LOST his property. 4. The Ld. CIT(A) has assu…

Perfect Thread Mills Ltd, Mumbai vs. DCIT 8(2), Mumbai

In the result, appeal filed by the assessee is dismissed

ITA 4964/MUM/2013[2010-11]Status: DisposedITAT Mumbai05 Sept 2019AY 2010-11

Bench: Shri G.S.Pannu Vice Presedent,(As) Shri D. Karunakar Rao & Shri Amit Shukla, Sh. Pawan Singh & Shri Rajesh Kumarperfect Thread Mills Ltd Vs Dcit, 8(2), Mumbai 201, Millenium Plaza Behind Sakinaka Telephone Exchange, Andheri Kurla Road, Andheri (E), Mumbai- 72 Pan: Aaacp6449E Appellant Respondednt

Section 13(2)Section 143(3)Section 255(4)Section 48

…diture incurred wholly and exclusively in connection with such transfer of capital asset. This proposition of law has been well settled by the Hon'ble Apex Court in two cases; R M Arunachalam vs CIT (1997) 227 ITR 222; and VSMR Jagdish Chandran vs CIT (1997) 227 ITR 240. A clear distinction has been drawn by the Apex Court that, where the previous owner had created a mortgage on the property in question and the assessee had inherited the said property along with the mortgage, in that event the assessee would be entitled to the deduction of the amount spent in getting mortgage discharged as cost of acquisition…

Smt. Nancy Thumboo Chetty, Bangalore vs. Income Tax Officer, Ward-1(2), Bangalore

In the result, the appeals are treated as partly allowed for statistical purpose

ITA 1921/BANG/2017[2006-07]Status: DisposedITAT Bangalore15 Mar 2019AY 2006-07

Bench: Shri N.V. Vasudevan & Shri G. Manjunatha

For Appellant: Shri B.S. Balachandran, AdvocateFor Respondent: Shri Biswarajan Sasmal, CIT
Section 147Section 148Section 54

…n the decision of the Delhi Bench of the Tribunal in the case of Addl.CIT Vs. Glad Investments Private Limited (2006) 102 ITD 227. However, now on being convinced by my Chartered Accountant and in view of the Supreme Court decision reported in 227 ITR 222 and 227 ITR 240 in the cases of R.M. Arunchalam Vs. CIT and V.S.Malhotra V/s CIT respectively, explained to me, I compute my Capital Gains for A.Y.2006-2007 as under:-“ Sale consideration received Rs. 11,61,00,000/- Less: Indexed cost of acquisition (at Rs.200 /sft for 1981) Rs. 3,91,64,778/- Balance Rs. 7,69,35,222/- Less: Deduction U/s.54 Rs. 2,21,00,000/…

Sri Rajkumar Thumboo Chetty, Bangalore vs. Income Tax Officer, Ward-1(2), Bangalore

In the result, the appeals are treated as partly allowed for statistical purpose

ITA 1920/BANG/2017[2006-07]Status: DisposedITAT Bangalore15 Mar 2019AY 2006-07

Bench: Shri N.V. Vasudevan & Shri G. Manjunatha

For Appellant: Shri B.S. Balachandran, AdvocateFor Respondent: Shri Biswarajan Sasmal, CIT
Section 147Section 148Section 54

…n the decision of the Delhi Bench of the Tribunal in the case of Addl.CIT Vs. Glad Investments Private Limited (2006) 102 ITD 227. However, now on being convinced by my Chartered Accountant and in view of the Supreme Court decision reported in 227 ITR 222 and 227 ITR 240 in the cases of R.M. Arunchalam Vs. CIT and V.S.Malhotra V/s CIT respectively, explained to me, I compute my Capital Gains for A.Y.2006-2007 as under:-“ Sale consideration received Rs. 11,61,00,000/- Less: Indexed cost of acquisition (at Rs.200 /sft for 1981) Rs. 3,91,64,778/- Balance Rs. 7,69,35,222/- Less: Deduction U/s.54 Rs. 2,21,00,000/…

Smt. Ranjini Thumboo Chetty, Bangalore vs. Income Tax Officer, Ward-1(2), Bangalore

In the result, the appeals are treated as partly allowed for statistical purpose

ITA 1919/BANG/2017[2006-07]Status: DisposedITAT Bangalore15 Mar 2019AY 2006-07

Bench: Shri N.V. Vasudevan & Shri G. Manjunatha

For Appellant: Shri B.S. Balachandran, AdvocateFor Respondent: Shri Biswarajan Sasmal, CIT
Section 147Section 148Section 54

…n the decision of the Delhi Bench of the Tribunal in the case of Addl.CIT Vs. Glad Investments Private Limited (2006) 102 ITD 227. However, now on being convinced by my Chartered Accountant and in view of the Supreme Court decision reported in 227 ITR 222 and 227 ITR 240 in the cases of R.M. Arunchalam Vs. CIT and V.S.Malhotra V/s CIT respectively, explained to me, I compute my Capital Gains for A.Y.2006-2007 as under:-“ Sale consideration received Rs. 11,61,00,000/- Less: Indexed cost of acquisition (at Rs.200 /sft for 1981) Rs. 3,91,64,778/- Balance Rs. 7,69,35,222/- Less: Deduction U/s.54 Rs. 2,21,00,000/…

Kapil Rajkumar Jain, Mumbai vs. ITO WD 1(3), Mumbai

In the result, this appeal by the assessee stands dismissed

ITA 3392/MUM/2016[2011-12]Status: DisposedITAT Mumbai13 Mar 2018AY 2011-12

Bench: Shri Shamim Yahya, Am & Shri Ram Lal Negi, Jm आयकर अपील सं./I.T.A. No. 3392/Mum/2016 ("नधा"रण वष" / Assessment Year: 2011-12) Kapil Rajkumar Jain Ito, Ward 1(3), बनाम/ 601, Paramount, H. N. Estate, Thane G.B. Road, Patlipada, Vs. Thane (W)-400 607 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Afipj 4486 N (अपीलाथ" /Appellant) (""यथ" / Respondent) : अपीलाथ" क" ओर से / Appellant By : Shri Kapil R. Jain ""यथ" क" ओर से/Respondent By : Shri Ram Tiwari

For Appellant: Shri Kapil R. JainFor Respondent: Shri Ram Tiwari
Section 48

…आयकर अपील"य अ"धकरण “डी” "यायपीठ मुंबई म"। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI RAM LAL NEGI, JM आयकर अपील सं./I.T.A. No. 3392/Mum/2016 ("नधा"रण वष" / Assessment Year: 2011-12) Kapil Rajkumar Jain ITO, Ward 1(3), बनाम/ 601, Paramount, H. N. Estate, Thane G.B. Road, Patlipada, Vs. Thane (W)-400 607 "थायी लेखा सं./जीआइआर सं./PAN/GIR No. AFIPJ 4486 N (अपीलाथ" /Appellant) (""यथ" / Respondent) : अपीलाथ" क" ओर से / Appellant by : Shri Kapil R. Jain ""यथ" क" ओर से/Respondent by : Shri Ram Tiwari सुनवाई क" तार"ख / : 02.01.2018 Date of Hearing घोषणा क" तार"ख / : 13.0…

P.Sukumar, Chennai vs. ITO, Salem

In the result, the appeal filed by the assessee is dismissed

ITA 442/CHNY/2013[2009-10]Status: DisposedITAT Chennai17 Mar 2017AY 2009-10

Bench: Shri N.R.S. Ganesan & Shri D.S. Sunder Singhआयकर अपील सं./Ita No.442/Mds/2013 "नधा"रण वष" / Assessment Year : 2009-10 Shri P. Sukumar, Bangalore Auto Diesel Works, The Income Tax Officer, Omalur Main Road, V. Ward – I(1), Salem – 636 004. Salem. Pan : Agups 0835 P (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Shri S. Sridhar, AdvocateFor Respondent: Shri R. Durai Pandian, JCIT

…capital gain and the tax thereon has to be computed.” 8. (supra) runs totally contrary to the judgment of Apex Court in Attili N. Rao (supra). 9. The Apex Court had an occasion to consider identical facts in V.S.M.R. Jagdishchandran (Decd.) v. CIT (1997) 227 ITR 240 as 10 I.T.A. No.442/Mds/13 well. The Apex Court found that where the mortgage was created by the assessee himself, then the expenditure incurred by the assessee to repay the mortgage debt cannot be held to be the cost of acquisition or cost of improvement allowable under Section 48(ii) of the Act. Therefore, it is obvious that wherever there wa…

Minaxi Kishore Mehta, Mumbai vs. Asst CIT 21(1), Mumbai

In the result, appeal filed by the assessee is dismissed

ITA 7871/MUM/2011[2008-09]Status: DisposedITAT Mumbai13 Apr 2016AY 2008-09

Bench: Shri R.C.Sharma & Shri Pawan Singhassessment Year: 2008-09 Mrs. Minaxi Kishore Mehta, Ito Ward 21(1), B-21, 3Rd Floor, Paritosh Kapole Bandra, Mumbai. Society, Vile Parle, West, Vs. Mumbai-400049. Pan: Aajpm2912L (Appellant) (Respondent)

For Appellant: Shri Firoz B. AndhyarujinaFor Respondent: Shri U.B.Jakke (DR)
Section 2(47)Section 48Section 56

…sale consideration received by applicant and not a diversion at source by virtue of any overriding title over the property. This view is also supported by the ratio of the decisions in case of Motilal chandami lal Jain 190 ITR 1(SC), V S M R Jagadishchandran 227 ITR 240(SC), Sunil J Kinariwala 259 ITR 10(SC), Shree Changdeo Sugar mills Ltd 44 SOT 479(mum).” 5. We have perused the material available on record and considered the rival contentions of the parties. Authorised Representative (AR) of the assessee has argued that the assessee has received only a sum of Rs. 6.25 Crores which was offered to tax by the as…

ITA 1287/2011 vs. Eagle Theatres

ITA/1287/2011HC Delhi21 Dec 2011
Section 260A

…hat payment to the stall owner for vacating/relinquishing his right to operate and manage the canteen/refreshment stall cannot be regarded as “cost of improvement”. He relies upon V.S.M.R. Jagadishchandran versus Commissioner of Income Tax, [1997] 227 ITR 240 (SC). In the said case, the assessee had sold a house and plots in the assessment year 1975-76. The house which was sold was mortgaged by the assessee, which was repaid/discharged by the buyer out of the sale proceeds. Therefore, the amount payable by the buyer to the mortgagee was treated as a part of the sale consideration. The assessee…

CIT vs. Eagle Theatres

ITA - 1287 / 2011HC Delhi21 Dec 2011
Section 260A

…hat payment to the stall owner for vacating/relinquishing his right to operate and manage the canteen/refreshment stall cannot be regarded as “cost of improvement”. He relies upon V.S.M.R. Jagadishchandran versus Commissioner of Income Tax, [1997] 227 ITR 240 (SC). In the said case, the assessee had sold a house and plots in the assessment year 1975-76. The house which was sold was mortgaged by the assessee, which was repaid/discharged by the buyer out of the sale proceeds. Therefore, the amount payable by the buyer to the mortgagee was treated as a part of the sale consideration. The assessee…

V.S.M.R.Jagadish Chandran v. CIT (227 ITR 240) — Cited in 14 Judgments | BharatTax