“Section 55(2)(b)(i)”
The decision most relied on for Section 55(2)(b)(i) is CIT v. Mythreyi Pai (152 ITR 247), cited in 44 judgments on BharatTax.
Leading authorities on Section 55(2)(b)(i)
Expenditure incurred towards the purchase of shares is a capital expenditure and therefore, interest expenditure incurred on such purchases is not eligible for deduction under Section 36(1)(iii) of the Income Tax Act.
A notice issued under Section 153C of the Income Tax Act, 1961, can be quashed if it is not based on any incriminating material found during a search.
When assessing income from undisclosed sources found during a search, the Assessing Officer can proceed under section 153C based on incriminating material found in the possession of a third party, even if the assessment is limited to specific block periods.
Compensation paid to hutment dwellers for vacating land is an allowable expenditure in computing capital gains, as it relates to the transfer of the asset. Such payments are considered a cost of acquisition or improvement under Section 48 read with Section 55 of the Income-tax Act, 1961.
The actual cost of acquisition for capital gains purposes cannot be the fair market value (FMV) as provided under Section 55(2)(b) of the Income-tax Act. The FMV of an asset on a specified date, if chosen by the assessee, determines the cost of acquisition, not the other way around.
Provisions related to capital gains under Section 55(2)(b) and 55(3) do not apply in certain circumstances, particularly when capital gains are not the primary issue or when the subject matter falls outside the scope of these sections. This is supported by decisions of the Supreme Court and High Courts.
