2011 (11) TMI 399

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....he substantial question of law mentioned above pertains to taxation of Rs. 65,51,000/-, which was received by the respondent-assessee on surrender of tenancy rights in property bearing No. 56, Jor Bagh, New Delhi on 7th May, 1992. The assessee had acquired tenancy rights in the property in 1979 from the owner Radha Krishan & Sons. The consideration for surrender of tenancy rights was paid pursuant to an agreement between the respondent-assessee, the owner-landlord Radha Krishan & Sons and M/s SCAL Investment Limited, Madras.   3. The Assessing Office in his order dated 12th March,1997 held that the aforesaid amount was actually compensation received by the assessee for vacating the premises in favour of the purchaser and was taxable....

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....sp; 6. The question of law raised in the present appeal is no longer res integra and is covered by the judgment of the Supreme Court in the case of Commissioner of Income Tax versus D.P. Sandu Bros. Chembur (P) Ltd., (2005) 2 SCC 584 wherein dealing with the similar issue, it has been held as under:-   "7. That the tenancy right is a capital asset, the surrender of the tenancy right is a "transfer" and the consideration received therefor a capital receipt within the meaning of Section 45 has not been questioned before us and must in any event be taken to be concluded by the decision of this Court in A. Gasper v. CIT. Normally the consideration would therefore be subjected to capital gains under Section 45. XXXXX 11. ......I....

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....lls specifically under one head, it has to be charged under that head and no other. In other words, income derived from different sources falling under a specific head has to be computed for the purposes of taxation in the manner provided by the appropriate section and no other. It has been further held by this Court in East India Housing and Land Development Trust Ltd. v. CIT that if the income from a source falls within a specific head, the fact that it may indirectly be covered by another head will not make the income taxable under the latter head. (See also CIT v. Chugandas and Co.) 14. Section 14 of the Income Tax Act, 1961 as it stood at the relevant time similarly provided that "all income shall, for the purposes of charge of inco....