1985 (10) TMI 38

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....he case, the Tribunal was correct in holding that the assessee had entered into the tenany agreement in the course of his business and the compensation received for termination of such agreement would be revenue in nature ? " The reference relates to the assessment year 1970-71, the relevant previous year having ended on March 31, 1970. The assessee is an advocate. He entered into an agreement with the Indian National Press (Bombay) Pvt. Ltd. for obtaining on monthly tenancy ground floor premises in a building on Dalal Street, Fort, Bombay. The assessee filed a suit in the City Civil Court at Bombay (being Suit No. 4978 of 1962) for specific performance of the said agreement. While the suit was pending, the assessee came to learn that....

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....sed to take the said premises unless it was in regard to a business-making proposition. The assessee, on the other hand, contended that no business had ever been carried on by him; that a trade name was fixed at the time of obtaining the tenancy; that the compensation had been received for not obtaining the tenancy; and that the tenancy right had not been obtained in the regular course of business. The Tribunal found that it could not, in view of the said statement in the plaint, accept the assessee's oral plea that he had never carried on business. The fact that the assessee, when he came to know that the Bank of Baroda was interested in the said premises, had approached the Indian National Press (Bombay) Pvt. Ltd. and requested it to nego....

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.... for the cancellation or variation of such an agreement would be capital receipt. The judgment of the Delhi High Court in Bawa Shiv Charan Singh v. CIT [1984] 149 ITR 29, was also cited by Mr. Khatri. Therein, it was held that a monthly tenancy or a leasehold right is a capital asset. The judgment mentions a similar view taken by the Calcutta High Court in the case of A. Gasper v. CIT [1979] 117 ITR 581. Mr. Jetly, learned counsel for the Revenue, submitted that the question as to whether the tenancy which the assessee had agreed to obtain was a capital asset or not had not been referred by the Tribunal to the court in this reference and that, therefore, we should not go into this question. The question that has been referred is as to....