TaxTMI 
TaxTMI 
2020 (12) TMI 217
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.... this appeal. After perusing the petition for condonation of delay, we are convinced that the assessee was prevented by sufficient cause in filing the appeal in time. Hence, we condone the delay and admit this appeal. 3. The assessee is an individual and filed her return of income for the Assessment Year 2016-17 on 28/06/2016, declaring total income of Rs. 6,21,37,340/-. In this return of income, she declared income from rent from house property and long term capital gains from sale of tenancy rights, in addition to interest from fixed deposits. Her case was selected for scrutiny and notice u/s. 143(2) of the Act was issued. The Assessing Officer completed the assessment u/s. 143(3) of the Act on 23/12/2015, determining the total income of....
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....f having tenancy rights. He further pointed out that the assessee had claimed that she would be entitled to interest after 10 years on the construction loan given by her to the landlord of Rs. 8,00,000/- but the supplementary deed shows that the interest would accrue to the assessee after 10 years. He argued that the assessee had not admitted any interest income thereon or furnished evidence of repayment of the construction loan. He argued that the assessee has not paid any price for purchasing of tenancy rights and hence the cost of acquisition is anyway -NIL-. He pointed out that the supplementary agreement dt. 08/04/1994 between the landlord and the tenant was not a registered document, and that the daughter-in-law of the landlord was th....
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....set. He submitted that these being old documents, the assessee required certain time to collate the same and that loan payment receipts etc. for the previous years were produced before the ld. CIT(A). He relied on the order of the ld. CIT(A) and prayed that the same may be upheld. 7. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:- 8. The ld. Counsel for the assessee submitted that the Article of Agreement dated 08/12/1994 specifies that "For the purpose of obtaining the said tenancy rights in respect of the said Flat the tenant hereby agrees to pay to the landlord Rs. 8,00....
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....sessee had not paid any price for purchasing the tenancy rights, is not true. 8.1. On these facts, the issue is whether the transfer of tenancy rights is transfer of capital asset or not. 9. The Hon'ble Calcutta High Court in the case of A. Gasper vs. CIT reported in (1979) 117 ITR 581 (Cal.)., has held as follows:- "21. In view of the aforesaid facts, the contention of Mr. Banerjee, namely, that the monthly tenancy of the assessee was not a transferable property must fail both in law and in fact. It must also be held that the monthly tenancy of the assessee was a capital asset as defined in Section 2(14) of the I.T. Act, 1961. 22. Section 2(47) of the I.T. Act, 1961, says that "transfer, in relation to capital asset, includes the....
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.... consideration money is to be received for transfer of a capital asset and, further, Section 2(47) of the Act says that the word "transfer", in relation to a capital asset, includes "the extinguishment of any rights therein". 9.1. This judgment was affirmed by the Hon'ble Supreme Court vide order dated 21/08/1991 reported in [1991] 192 ITR 382 (SC). 10. The Hon'ble Supreme Court in the case of CIT vs. D.P. Sandu Bros. Chembur (P) Ltd. [2005] 142 Taxman 713 (SC), held as follows:- "Section 45 of the Income-tax Act, 1961 - Capital gains - Chargeable as - Assessment year 1987-88 - Respondent/assessee surrendered its tenancy right to lessor prematurely in consideration of which it received a sum of Rs. 35 lakhs - Assessing Officer h....
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....ins on the ground that no purchase price was paid for the tenancy. A loan of Rs. 8,00,000/- was given as construction loan which was refundable. In the articles of agreement dt. 08/12/1994 at page 4.4., it is stated as follows:- "For the purpose of obtaining the said tenancy rights in respect of the said Flat the tenant hereby agrees to pay to the landlord Rs. 8,00,000/- by way of construction loan and the same shall be paid as under:- (i) Rs. 8,00,000/- against possession of the flat. This loan is directly linked to the tenancy rights and it is, in a way, consideration for obtaining the rights. Even if the assessee has not paid any amount for purchase of tenancy rights, the nature of rights would remain tenancy right and this is a ca....