Surrender of tenancy rights yields a capital receipt, not income from other sources, even where cost of acquisition is disputed.

Tenancy rights are capital assets, and consideration received on their surrender is a capital receipt that falls within the capital gains scheme if chargeable at all. The Revenue cannot re-characterise such a receipt as income from other sources merely because the cost of acquisition is not accepted or cannot be satisfactorily established. A receipt arising from the transfer or extinguishment of a capital asset remains outside the residuary head under section 56, and the addition under income from other sources was deleted.

---

---

Issues: Whether consideration received on surrender of tenancy rights is taxable under the head "Capital Gains" or can be brought to tax under the residuary head "Income from Other Sources".

Analysis: Tenancy rights are capital assets and surrender of such rights gives rise to a capital receipt. The receipt, if chargeable at all, falls within the scheme of capital gains. The absence or non-acceptance of the claimed cost of acquisition does not permit the Revenue to re-characterise the receipt under the residuary head. A capital receipt arising from transfer or extinguishment of a capital asset cannot be taxed under section 56 merely because the computation under the capital gains provisions is disputed or fails on the facts.

Conclusion: The addition made under the head "Income from Other Sources" was rightly deleted, and the Revenue's challenge fails.

Ratio Decidendi: A receipt arising from surrender of tenancy rights, being a capital receipt from transfer of a capital asset, cannot be taxed under the residuary head of income even if the cost of acquisition is not satisfactorily established.

---