Karnataka High Court rules on the deductibility of expenses incurred towards transfer of capital assets while computing capital gains under Section 48 of the Income-tax Act (‘ITA’)

The Hon’ble Karnataka High Court in its recent ruling1 has held that payments made by the Assessee as part of the conditions attached to the Share Purchase Agreement (‘SPA’) and which are not directly connected with transfer of shares by the Assessee shall not be allowed as a deduction while computing capital gains under Section 48 of the ITA.