TaxTMI 
TaxTMI 
2018 (4) TMI 1415
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....ive grievance of the revenue read as under:- 1. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in deleting the addition of Rs. 3.11 crores, treated by the AO as income from other sources and directing to consider the same as Mong term capital gain' and to allow the cost of acquisition without appreciating the fact that the assessee company had transferred the ownership rights of the property in 1972 to M/s. Star Steel Limited itself by handing over the possession of the property under lease of 98 years and the receipt of Rs. 3.11 crores was a lumpsum receipt received by the assessee for no litigation and to refrain from causing delay and creating legal complications. 2. On the fac....
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....ame, the A.O. noticed that the assessee was the owner of a plot of land which was given on a long term lease of 98 years to M/s. Star Steel Limited (SSL). The A.O. further noticed that SSL who had the possession of the land, created a charge on the said plot of land as security for availing various credit facilities from banks, financial institutions, etc. SSL suffered heavy losses in its business and was referred to the BIFR. It was subsequently recommended for the winding up of SSL. The Official Liquidator was appointed. In accordance with the directions/order of the Hon'ble High Court of Gujarat, the Official Liquidator went through the necessary procedures to effect the sale of said plot of land for which leasehold rights were held by S....
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....s and the submissions, the ld. CIT(A) was convinced that the receipt of Rs. 3.11 croress cannot be taxed as income from other sources. 10. Aggrieved by this, the revenue is before us. The ld. D.R. strongly supported the findings of the A.O. Per contra, the ld. counsel for the assessee reiterated what has been stated before the lower authorities. 11. We have given a thoughtful consideration to the orders of the authorities below and with the assistance of the ld. counsel we have gone through the related documentary evidences brought on record in the form of a paper book in the light of Rule 18(6) of the ITAT Rules. There is not dispute that by the lease deed dated 11.07.1972 lease of the land in question was granted to SSL. The content....
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....cts * The assessee entered into a memorandum of understanding (MoU) with 'D' Ltd. and 'E' Ltd. for the purchase of 500 sq. mtrs of a land or a residential flat not exceeding 300 sq. ml for a sale consideration of Rs. 4,28,00,000. * At the time of entering into the MoU a sum of Rs. 68,00,000 was paid by the assessee and the balance amount was to be paid in two instalments; the first instalment when the layout plan was sanctioned by the competent authority and the second instalment at the time of possession of the plot. * On 22-5-1998 the assessee entered into a supplementary MoU by which plot No. A-1 measuring 500 sq. mtrs was allotted to the assessee. On 27-8-1998 appropriate authority issued a no ....
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....The transaction was reported to the revenue; a no objection certificate was issued. No doubt, the MoU did not assign a particular defined plot of land. A supplementary deed was later entered into, and the assessee was consequently allotted a plot. [Para 12] Income from relinquishment of right in a property has to be assessed as capital gain * The decision in J.K. Kashyap v. Asstt. CIT [2008] 302 ITR 255/171 Taxman 390 (Delhi) is an authority for the proposition that even when an assessee becomes entitled to an undefined and undivided share in a property, through an agreement, which he later relinquishes, the gain has to be assessed as income from capital gain, and not as income from other sources. [Para 13] * The ....
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.... 16. Grievance raised vide ground no. 2 is squarely covered in favour of the assessee and against the revenue by the decision of the Hon'ble Supreme Court in the case of Textool Company Ltd. 35 taxmann.com 639. The Hon'ble Supreme Court was seized with the following question of law: "...Whether on the facts and in the circumstances of the case, the Appellate Tribunal is right in allowing the deduction of Rs. 55,84,754/- being the payment made by the assessee company directly to Life Insurance Corporation towards Group Gratuity Fund under Section 36 (l)(v) of the Income Tax Act, 1961?" 17. And the Hon'ble Suprme Court held as under:- 8. Having considered the matter in the light of the background facts, we are of the opin....