1983 (9) TMI 4

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.... in the circumstances of the case, the Tribunal was justified in refusing to entertain the alternative ground of the Department that capital gains on the transfer of the leasehold rights should be brought to tax in these proceedings in respect of the receipt of Rs. 2.5 lakhs ? " The facts behind the legal formulations are as follows : The assessee is the daughter of Sri Humayun Mirza, who was the owner of the property known as " Cubbon Lodge ", No. 3, Rajbhavan Road, Bangalore. On June 29, 1967, he made an oral gift of the property in favour of his minor daughter, Maryam Mirza, and the gift was accepted by her mother on behalf of the minor daughter. The assessee attained majority on January 12, 1970. While she was a minor, on May 22, ....

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....rulings reported in [1939] 7 ITR 536 (Pat) (CIT v. Visweshwar Singh) and [1941] 9 ITR 313 (Pat) - (Province of Bihar v. Maharaja Pratap Udai Nath) to hold that the receipt was of a capital nature. That the salami received by the assessee or her father is a capital receipt is clear from the above rulings. It was for the Department to make out a case that the amount paid in lump sum represented the lease rent and not the consideration for parting with the property. In the absence of any material in this regard, we confirm the order of the Appellate Assistant Commissioner that the receipt of Rs. 2.5 lakhs was of a capital nature and not a revenue nature. " It will be seen from the above order that the Tribunal rested its conclusion solely o....

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....e paid is premium or salami but the periodical payments made for the continuous enjoyment of the benefits under the lease are in the nature of rent ; the former is a capital receipt and the latter a revenue receipt. Parties may camouflage the real nature of the transaction by using clever phraseology and, therefore, it is not the form but the circumstances of the transaction that matter. The nomenclature used may not be decisive or conclusive but it helps the courts, having regard to the other circumstances, to ascertain the intention of the parties (See CIT v. Panbari Tea Co. Ltd. [1965] 57 ITR 422 (SC). " It will be seen from the above pronouncement that the onus is on the Revenue to show that what was stipulated in the lease is not de....