TaxTMI 
TaxTMI 
2022 (3) TMI 38
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....te Tribunal, "B" Bench, Kolkata (the 'Tribunal' in short) in ITA No.1915/Kol/2019 for the assessment year 2016-17. The revenue has raised the following substantial question of law: (i) Whether on the facts and circumstances of the case the Learned Income Tax Appellate Tribunal is justified in treating the receipts of compensation of Rs. 10,00,00,000/- for vacating tenancy to be assessable as "Capital Gains" instead of income under the head "Profit and Gains of Business or Profession? We have heard Mr. Smarajit Roy Chowdhury, learned standing counsel appearing for the appellant/revenue and Mr. J.P. Khaitan, learned senior standing counsel, assisted by Mr. Saumya Kejriwal, leaned Counsel, appearing for the respondent/assessee. ....
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.... the tenancy and also permitted to assign the tenancy to any other person and the landlord was not entitled to terminate the tenancy on any ground except non-payment of rent. The assessee by agreement dated 18th February, 2016 transferred the flat in favour of any or other person and received a total consideration of Rs. 10 crores. The assessee claimed benefit of LTCG. The assessing officer while completing the assessment by order dated 23rd December, 2018 rejected the claim of the assessee on the ground that the assessee could not furnish any evidence of rental payment regarding the claim of tenancy and she did not furnish details of interest income on the amount of Rs. 8 lakhs paid as construction loan. The assessing officer further held ....
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....ee. There is no dispute that the assessee had surrendered tenancy rights during the year for a consideration of Rs. 10,00,00,000/-. This income was shown as Capital Gains. The ld. A.O. has treated the said income as business income. It may be recalled that vide an Agreement dated 13.05.1992, the assessee Smt. Shikha Roy had obtained tenancy rights, copy of the agreement given during the course of hearing, which stated that the Article of Agreement would be read as 08.12.1994 from Mr. Naresh H. Thanawala, who was the landlord. The assessee, Smt. Shikha Roy, and her son Shri Jayanta Roy had obtained the tenancy rights of flat no.1 in Jai Hind Co-operative Housing Society Limited at Juhu for a monthly rent of Rs. 2,650/-. As per the Tenancy Ag....
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....be assessed to tax under profits and gains of profession or would be assessed to tax under capital gains. After noting the terms and conditions of the agreement, the PCIT concluded that the consideration received by the assessee against the surrender of tenancy right is assessable as capital gain and, accordingly, allowed the appeal and reversed the order passed by the assessing officer. The revenue carried the matter in appeal before the Tribunal. The Tribunal on its part re-examined the conditions of the agreement and as to how the parties understood the nature of transaction and found that the payment of Rs. 8 lakhs was rightly claimed as cost of acquisition in computation of capital gain and the finding of the assessing officer that ....