TaxTMI 
TaxTMI 
2011 (4) TMI 1425
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....e income for relinquishment of tenancy rights has been taxed under the provisions of the Income Tax Act 1961 (hereinafter referred to as `the Act'). It relates to the assessment year 1989-1990. 2. A brief statement of facts essential for the disposal of the writ petition may be indicated. The petitioner is a partnership firm and was at the relevant point of time engaged, inter alia, in the business of manufacture of tiles, other cement products, pipes, etc. It had taken a portion of a premises on rent situate on Exhibition Road in the township of Patna, from one Smt. Jayanti Roy, widow of Col. Niranjan Roy, and other ex-owners. In fact, it was a sprawling premises and was taken on rent by the present petitioner and three other partnershi....
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....r, the petitioner had preferred appeal which was allowed in part by the learned Commissioner of Income Tax by his order dated 7.12.92 (Annexure-4). Aggrieved by this order, the petitioner preferred appeal before the learned Tribunal which was allowed by order dated 9.8.94 (Annexure-5). In other words, the aforesaid declaration made by the petitioner with respect to the income received on account of relinquishment of tenancy rights was accepted by all the three authorities. 2.2) The petitioner received notice under the provisions of section 148 of the Act, calling upon the petitioner to show cause as to why the assessment proceedings be not re-opened, particularly with respect to the income received from relinquishment of tenancy....
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....ission, therefore, the petitioner cannot be dissimilarly treated. Learned counsel lastly submits that the position has with the insertion of section 55(2) in the Act, with effect from 1.4.1995, the legal position has perhaps changed as a result of which the income in question may not be taxed with effect from the date of insertion. 4. Learned Senior Standing Counsel for the Department submits that the Supreme Court has by its order dated 26.10.98, passed in Civil Appeal no.524 of 1999 (Eastern Asbestos Products v. The Commissioner of Income Tax, Patna & Ors.), already framed the following issues for the determination of this Court:- "(i) Whether the impugned notice satisfies the condition precedent or not. (ii) If the c....
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....ate order to be passed regarding notice under section 146 of the Income -tax Act 1961? (iv) Whether the order of the re-assessment under the provisions of section 147 of the Act is prima-facie illegal and without jurisdiction inasmuch as the particulars of receipt on account of relinquishment of tenancy rights were duly disclosed in the original return of income? (v) Whether the order of re-assessment is prima-facie illegal and without jurisdiction inasmush as there is no omission or failure on the part of the assessee to disclose material facts relevant to an assessment? (vi) Whether the re-assessment under the provisions of section 148 of the Act is illegal and without jurisdiction inasmuch as the findings there....
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....tionale and intelligible nexus between the reasons and the belief? (xii) Whether an order of re-assessment is illegal and without jurisdiction as the condition precedent to the issue of notice under the provisions of section 147 read with section 148 of the Act are not satisfied?" 6. We have perused the materials on record and considered the submissions of the learned counsel for the parties. It appears from a perusal of the agreement dt. 15.10.88 that the petitioner, M/s Eastern Asbestos Products (the petitioner in the analogous CWJC No.7515 of 1997), M/s Ashirvad Enterprises, and M/s Poddar Industrial Corporation, were four partnership firms engaged in same or similar business, and were occupying different portions of the same....
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....ncome derived from relinquishment of tenancy right is capital receipt and cannot, therefore, be subjected to payment of income tax. 8. Consequently, CWJC No.12950 of 2001 succeeds. The impugned order dated 25.1.2001, passed by the learned Deputy Commissioner of Income Tax, is hereby set aside. 9. CWJC No.3003 of 1999, as stated here inabove, challenges issuance of notice under section 148 of the Act, calling upon the petitioner to show-cause as to why the assessment proceedings be not re-opened, and the income received by it for relinquishment of tenancy rights be not taxed. In view of the foregoing discussion, quashing the order of assessment, the impugned notice has become infructuous and has to be quashed. CWJC No.3003 of 1999 also....