Separate compensation for transferred rights taxed as income from other sources; notional rent reduced, while unsupported deductions failed.

A receipt described in a deed of nomination as compensation for transferring accrued rights was treated as a separate, severable payment from the stated sale consideration and was assessed as income from other sources, not long-term capital gains. The notional rent for the specified units was retained only after reduction on the basis adopted in the assessee's husband's connected case, resulting in partial relief on that issue. The addition for interest income and the claim for Chapter VI-A deduction were sustained because no supporting evidence showed prior accounting of the income or substantiation of the deduction claim. The appeal succeeded only to the limited extent of the revised notional rent.

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Issues: (i) Whether the amount received under the deed of nomination as compensation for transferring accrued rights was assessable as long-term capital gains or as income from other sources; (ii) whether the notional rent adopted for the specified units required interference; (iii) whether the addition relating to interest income and the claim for deduction under Chapter VI-A were liable to be sustained.

Issue (i): Whether the amount received under the deed of nomination as compensation for transferring accrued rights was assessable as long-term capital gains or as income from other sources.

Analysis: The sale deed and the deed of nomination executed on the same date showed a clear bifurcation between the stated sale consideration and the separate compensation paid for transferring rights accrued in favour of the first party. The stated compensation was not treated as part of the capital sale consideration but as a distinct receipt arising from transfer of rights.

Conclusion: The amount was rightly assessed as income from other sources and not as long-term capital gains, and the finding was against the assessee.

Issue (ii): Whether the notional rent adopted for the specified units required interference.

Analysis: The estimation adopted in the connected case of the assessee's husband was taken as a reasonable basis for the assessee's case as well. On that footing, a reduced notional rental value was determined for the relevant units.

Conclusion: The addition was sustained only to the extent of the revised notional rent, and the issue was partly in favour of the assessee.

Issue (iii): Whether the addition relating to interest income and the claim for deduction under Chapter VI-A were liable to be sustained.

Analysis: No supporting evidence was produced to show that the interest income had already been accounted for elsewhere or that the deduction claim was substantiated. The claim remained unsupported before the lower authorities as well as before the Tribunal.

Conclusion: The additions were confirmed and the findings were against the assessee.

Final Conclusion: The appeal succeeded only on a limited issue relating to notional rent, while the remaining additions and disallowances were upheld.

Ratio Decidendi: A receipt specifically described as compensation for transfer of rights, when severable from the stated sale consideration, is assessable according to its true character; unsupported factual assertions cannot displace an otherwise sustainable assessment.

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