1978 (7) TMI 92

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f Rs. 50,000. The valuer's report submitted by the assessee recorded that the total area of the premises leased out was 9,825 sq. ft. Under cl. 2 of the deed the rent of the premises was fixed at Rs. 1,500 per month for the first two years and, thereafter, at an increased rate of Rs. 100 per month after every nine years till the expiry of the lease, i.e., after 99 years. The ITO rejected the assessee's claim that the said sum of Rs. 50,000 received as premium or salami constituted capital receipt and was not tax- able as income. The ITO found that the property was situated in a predominantly business area where the market rent was quite high varying between 75 p. to Re. 1 per square foot. The stipulated rent was lower than the prevail....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....o the lessor Rs. 40,000 as compensation if the present building had to be demolished. For the above reasons the AAC accepted the contentions of the assessee and allowed his appeal. From the order of the AAC the revenue preferred a further appeal to the Tribunal. The Tribunal found that the said sum of Rs. 50,000 had been paid by way of salami or premium and had been so recorded in the deed. The Tribunal also found that the other provisions in the deed justified the low rate of rent. The Tribunal concluded that the said sum of Rs. 50,000 received by the assessee as salami was a capital receipt and not liable to tax. At the hearing learned counsel for the revenue did not advance any contention except what had been stated by the ITO. ....