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2013 (2) TMI 556 - ITAT MUMBAIIncome from transfer of tenancy rights - taxable as capital gain or income from other sources - held that:- the consideration paid by the new tenant is consent of the landlord for the transfer of tenancy rights between the new and old tenants. Thus, in our opinion, the amount of Rs 7.26 lakhs is the ‘consideration for consent’. Generally, in matters of the tenancy rights disputes, it is the tenant who gets the financial benefit and the same flows from the pockets of the Landlord in lieu of the surrender of the said tenancy rights by the tenant and certainly the land lords does not receive, which is the case in the instant appeal. Therefore the taxation principles relating to the tenancy rights should not apply in this case. It cannot be inferred that the new tenant received merely rental rights and there is no transfer of any capital rights to the new tenant by the land lord. Therefore Rs 7.26 lakhs is neither a capital receipt nor a rental receipt. In that sense, the argument of the Ld Counsel that some of the capital rights, out of the bundle of rights relating to the immovable property, are transferred to the new tenant does not hold water. There is no time gap between the vacation of the property by the old tenant and grant of rental rights to the new tenant. - there is no evidence to infer that the house is in vacant possession of the assessee even after the alleged end of the tenancy - Therefore, the views of the AO as well as the CIT(A) on this issue require to be sustained as the amount of Rs 7.26 lakhs, the consideration for consent, does not involve any transfer of capital rights attached to the property on the facts of this case and the amount constitutes a windfall gain to the assessee. Amount is taxable as Income from other sources - decided against the assessee.
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