2019 (8) TMI 440

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....are that one Jeewan Lal Virmani was the owner of about 5077 square yards of plot which he gave on lease for 99 years to M/s ESS ESSMetals and Electricals through one BansariLal Pasricha in the year 1975. Subsequently assessee purchasing the same under three sale deeds dated 13.6.1997, 26.4.2007 and 19.10.2010 respectively from the children of Jeewan Lal after his death. Subsequently, on 9.2.2015 the property was sold to M/s HH Buildtech Private Ltd. for sale consideration of Rs. 35 crores, out of which the assessee received Rs. 18 crores and M/s ESS ESS Metals and Electricals received Rs. 17 crores towards the surrender of leasehold rights and cost of construction/Malba of the leased land to the vendee. 3. Assessee filed the return of....

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....se both the assessee and M/s ESS ESS Metals and Electricals held their rights in the property in different capacities and, therefore,it was proper for the division of the sale consideration between them in the ratio of Rs. 18 crores and Rs. 17 crores respectively. Ld. CIT(A), therefore, allowed the appeal and granted relief to the assessee. 6. Revenue is, therefore, in this appeal before us challenging the deletion of the addition under the head 'long-term capital gain' and 'short-term capital gain' stating that all the ownership rights, along with title and interest, of the immovable property were vested in the assessee alone and, therefore, any payment made toM/s ESS ESS Metals and Electricals is not only excessive but unwarranted. ....

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....d Electricals had to receive Rs. 17 crores. 10. In the circumstances, the admitted facts prove that in respect of the land that was sold in favour of M/s HH Buildtech Private Limited both the assessee and M/s ESS ESS Metals and Electricals have rights in different capacities. M/s ESS ESS Metals and Electricals held the leasehold rights for 99 years and since the lease was in the year 1975 and the assessee purchased the property between 1997 and 2010, the rights acquired by the assessee must be understood to be subject to the leasehold rights. It is, therefore, clear that the Assessing Officer was inclear error in holding that the assessee had become the sole owner of the property, which is factually and legally incorrect. Assessee was no....