TaxTMI 
TaxTMI 
2013 (12) TMI 1101
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....s erred in law and in facts in upholding the order passed by the Assessing Officer under section 143(3) of the Income-tax Act, 1961, which is illegal and bad in law. 2. The learned Commissioner of Income-tax (Appeals) has erred in law and in facts in concurring with the assessment of Rs. 85,00,000 received from surrender of tenancy/occupancy rights as 'income from other sources' instead of the declared head of income, i.e., 'long-term capital gain'. 3. Without prejudice to the above, the learned Commissioner of Income-tax (Appeals) ought to have held that the receipt is not taxable being consideration received for relinquishment of tenancy occupancy rights having no cost of acquisition. &....
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....the assessee sold the "right of possession" in the property to one Shri Rajan Kirtanlal Shah, 701, Landmark, Tagore Road, Santacruz (West), Mumbai -400 054 for a sum of Rs. 84 lakhs vide an unregistered agreement dated August 14, 2006 and claimed status of tenancy rights and computed capital gains in accordance with the provisions of amended section 55(2) of the Act. The assessee invested the gains in a residential house and claimed the benefits of section 54 of the Act. Finally, the assessee did not pay any tax on the receipt of Rs.84 lakhs. The Assessing Officer did not accept the said claim of the assessee and mentioned that the assessee was never a tenant, he was merely occupying the premises illegally and therefore, he does not have th....
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....um of Rs. 84 lakhs as income from the "capital gains" but also confirmed the taxability of the same under the head "Income from other sources" and consequent denial of deductions under section 54F of the Act. Aggrieved with the same, the assessee filed an appeal before the Tribunal with the above referred ground. 6. During the proceedings before us, learned counsel argued stating that the assessee has been in possession of the said property since 1975 and acquired the rights to remain in the property and transferred the said rights which constitutes tenancy rights to Shri Rajan Kirtanlal Shah for a sum of Rs. 84 lakhs vide agreement dated August 14, 2006 and these facts are undisputed. The Commissioner of Income-tax (Appeals) has also conf....
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....ally, right to remain in possession being one of the different shades of tenancy right, constitutes a capital right in the asset and the same is liable to be taxed under the head "Capital gains" as per the amended provisions of section 55(2) of the Act. Further, he drew the analogy of the facts with that of the Cadell Weaving Mill Co. (P.) Ltd. (supra) and mentioned that this is also a case where the lease agreements were renewed after 1975 and the assessee continue to occupy the premises legally. That the assessee was also having a right to remain in possession and the hon'ble High Court in the absence of amended provisions of section 55(2) held it as a "personal right". It is a fact that the assessee never paid any rent since 1975. 7. Pe....
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....ayment. In our opinion, the Assessing Officer and the Commissioner of Income-tax (Appeals) missed very important facts emanating from the said agreement dated August 14, 2006. Considering the above lacunae in the order of the Commissioner of Income-tax (Appeals), we find the matter must be set aside for readjudication by him after hearing the assessee and also after taking into consideration the contents of the above described agreement dated August 14, 2006. The Commissioner of Income-tax (Appeals) shall also consider the below mentioned discussion while passing a speaking order on the grounds extracted above. 9. We find from the facts narrated above that the assessee certainly earned some right in the property, legal or otherwise. The As....
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....al Shah, who is undisputedly not the landlord. It is unknown if Shri Shah has surrendered the right in favour of the M/s. Amur Real Estate (P.) Ltd. In our opinion, the transaction between the assessee and the landlord is not the same qua the transaction between the assessee and Shri Rajan Kirthanlal Shah or M/s. Amur Real Estate (P.) Ltd. and the consideration received by the assessee shall have different treatments in sofaras the tax treatments are concerned. Considering the fact the lower authorities have not appreciated the facts properly in the adjudication, for want of basic facts, we are unable to provide conclusive adjudication here in this appeal. 10. Regarding the applicability of the judgment in the case of Cadell Weaving Mill C....