1993 (7) TMI 140

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....Calcutta. The assessee paid the principal and had the decree assigned in its name. Thereafter, the owner of the property granted a lease of the property for 33 years on 25th December, 1968 in consideration of the interest payable on the loan. In the previous year ended 31-5-1982 corresponding to the assessment year 1983-84, the owner sold 8 grounds out of the 22 grounds of land. Since the assessee had leasehold rights for the remaining period of 17 years, the purchaser of the property gave the assessee a sum of Rs. 1,50,000 for surrendering that leasehold right. The assessee claimed that this was a capital receipt and since there was, no cost of acquisition, it was not liable to be taxed. The ITO treated the amount paid by the assessee for ....

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.... and the claim was made that the capital gains cannot be brought to tax. However, the Allahabad High Court held that the amount could be characterised as a casual and non-recurreing receipt and since it is not exempt under section 10(3), proviso (i), it will be taxable under that section. It was submitted that since the facts of this case are similar to that case, the capital gains which cannot be taxed under section 45 must be taxed under section 10(3). This was resisted by the assessee by pointing out that section 10(3) is not a charging section but in fact an exempting section. It was submitted that what otherwise would be chargeable would be exempt under section 10(3) if it were of casual and non-recurring nature. It was pointed out tha....