Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Income Tax Act 1961 (Pi |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Income Tax Act, 1961 (Prior to 1995 Amendment)-Sections 10(3), 14, 45 and 56-Capital Gains Tax - Liability-On the amount received against surrender of tenancy rights-Stand of Revenue before Court that the cost of acquisition was incapable of being ascertained-Liability negated by Courts below-On appeal, held: Though cost of acquisition of tenancy right is ascertainable assessee not liable to tax in view of the stand of Revenue-The income being capital receipt and assessable only under Item E of Section 14, cannot be taxed under Section 10(3) either-If the income is included in any one of the heads, it cannot be brought to tax under the residuary provisions of Section 56. Respondent-assessee entered into lease agreement with lessor for 50 years. He prematurely surrendered the tenancy rights to the lessor and in lieu of that received an amount. The amount was credited to reserve and surplus account in the Assessee's return for the assessment year 1987- 88; But the same was disallowed by Revenue holding that the amount was taxable as "income from other sources" under Section 10(3) r/w Section 56 of Income Tax Act, 1961. In Assessee's appeal Revenue Authority held him liable to pay capital gains on the amount. Tribunal in view of amendment to Section 55(2) of the Act in 1995 held that the assessee did not incur any cost to acquire the leasehold rights and that if at all any cost had been incurred it was incapable of being ascertained. Therefore, since the capital gains could not be computed as envisaged in Section 48 of Income Tax Act, Capital gains earned by the assessee was not exigible '' to tax. Appeal of Revenue was dismissed by High Court. On appeal, Revenue contended that surrender value of tenancy rights ~ was chargeable to capital gains under Section 45; and that even if it was , not chargeable, the same was liable to be taxed as "income from other sources" under Section 10(3) r/w Section 56 of the Act. The connected appeals also raised identical issue. |
Judge | Hon'ble Ms. Justice Ruma Pal |
Neutral Citation | 2005 INSC 55 |
Petitioner | Commissioner Of Income Tax, Mumbai |
Respondent | D.p. Sandu Bros. Chembur (p) Ltd. |
SCR | [2005] 1 S.C.R. 895 |
Judgement Date | 2005-01-31 |
Case Number | 2335 |
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