TMI Blog2012 (12) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... s not allowable - In favor of revenue Disallowance on account of expenses incurred for conducting the activity of nursery school - Assessing Officer disallowed 25% of the expenditure for want of evidence to prove the same – Held that:- Assessee failed to produce any evidence to prove the claim of expenses – disallowance upheld - ITA No. 3144/Mum/2010 - - - Dated:- 8-6-2012 - SHRI VIJAY PAL RAO, SHRI N K BILLAIYA, JJ. Assessee by Shri K Gopal Revenue by Shi M Rajan ORDER PER VIJAY PAL RAO, JM This appeal by the assessee is directed against the order dated 4.12.2009 of the Commissioner of Income Tax (Appeals) for the Assessment Year 2006-07. 2 There is a delay of 37 days in filing the present appeal by the assessee. The assessee has filed a petition for condonation of delay along with an affidavit stating that the assessee was out of India and thereafter, the mother of the assessee was hospitalised; therefore, the assessee could not take necessary steps to file the appeal within the time limit. 3 We have heard the ld AR of the assessee as well as the ld DR and considered the relevant material on record. We are satisfied with the reasons expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, the said receipt is capital receipt and hence not taxable. 7.1 The ld AR of the assessee has submitted that the assessee s right to stay, occupy and possess the matrimonial house is by virtue of the marriage of the assessee with her husband and therefore, there is no cost of acquisition of the said right in the matrimonial home. In support of his contention, the ld AR has relied upon the decision of the Hon ble Gujarat High Court in the case of Commissioner of Income-tax v. Manoharsinhji P. Jadeja reported in 281 ITR 19 (Guj). The ld AR has further submitted that the Assessing Officer has also took the cost of acquisition of capital asset at nil. Therefore, in the absence of cost of acquisition, the receipt against surrender of right is not taxable under the head capital gain . The ld AR has further submitted that since the issue raised by the assessee goes to the root of the matter and a legal issue; therefore, in support of this issue, the assessee has filed the additional evidence which is relevant for deciding the issue. 7.2 The ld AR has relied upon the decision of the Hon ble jurisdictional High Court in the case of Nirmala L. Mehta v. A. Balasubramaniam, Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and submitted that only in the case where the Income Tax Authorities have decided the case without giving sufficient opportunities to the assessee to adduce the evidences, the assessee maybe allowed to produce such additional evidences. The ld DR has submitted that it is not the case of the assessee that the assessee was not given appropriate opportunity to file the evidence; therefore, the assessee is not entitled to produce any additional evidence at this stage on merits. The ld DR further submitted that as per the amended provisions of sec. 55, the cost of tenancy right is taken at nil and therefore, there will be no effect, even there is no actual cost of acquiring the tenancy right and accordingly, the amount received by the assessee on surrender of the same will be taxed as capital gain. He has relied upon the orders of the authorities below. 7.6 Alternatively, the ld DR has submitted that even, if the receipt is not taxable as capital gain, the same is taxable as income from other sources u/s 56 of the I T Act. 7.7 In rebuttal, the ld AR of the assessee has submitted that the issue raised by the assessee is a legal issue and to substantiate the right of the assessee, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute was regarding the right of occupation and possession of the property known as Palm Beach Bunglow situated at Juhu Tara Road, Mumbai 400 049. 9.1 In the interim order, the husband of the assessee was restrain in dealing with or create any third party right in respect of the property in question, being matrimonial home. The husband of the assessee subsequently filed an application seeking to withdraw the matrimonial suit, which was permitted by the Court vide order dated 9.6.2000. However, the interim order passed on 3.4.1996 ordered to be in force for further 5 weeks from 9.6.2000 in the modified form. As a result thereof, the husband of the assessee was retrained from disposing of or creating third party rights or initiating any steps regarding development of the property in question or inducting any third person for five weeks from 9.6.2000. The said order was then extended to 21.7.2000. In the meantime, on 20.7.2000, the assessee has also fled a suit no.2929 of 2000 u/s 6 of Specific Relief Act and sought a mandatory order and injunction against the husband for removal of newly erected four concrete walls,, newly placed padlocks/locks on the front entrance door and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same exclusively, and (ii) the Appellant will be allowed to run her pre-primary school without being required to pay any further rent or compensation for the said Palm l3each Property as at present without any hindrance frorr the said Mr. Vijay Thakkar of M/s. Manas Properties Private Ltd. or his/ their servants and agents. 7. The Appellant has subject to the provisions of Clause 6 hereof further given her no objection and consent to the said Mr. Vijay Thakkar of M/s. Manas Properties Private Ltd. developing the said property by demolishing the bungalow and constructing a new building utilising the entire permissible SI subject to the said Mr. Vijay Thakkar of M/s. Manas Properties Private Limited providing the Appellant permanent alternate accommodation in the new building of an equva1ent area on ownership basis and compensation for the period of construction. 9.4 The disputes between the parties were stand dissolved and comprised by this minutes of order dated 5.5.2005 and the suit filed by the assessee in 2995 of 2000 stands decreed in terms of the compromise. Accordingly, consequential order dt 6.5.2002 was passed. 9.5 It is clear from the minutes of order dated 5.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Capital gains is also sought to be supported by the amendment in section 55 of the Act. According to learned counsel for the Revenue the principle that a capital asset which does not have cost of acquisition does not fall within the charging section is now superseded by the amended provision of section 55 of the Act. However, it requires to be noted that by the Finance Act, 1987 with effect from April 1, 1988, the amendment to section 55 of the Act only ropes in taxability of goodwill on transfer of the same even if there is no cost of acquisition. Similarly, section 55 has been amended from time to time to enable the taxation of other assets wherein no cost of acquisition is envisaged ; tenancy rights, stage carriage permits and, loom hours by the Finance Act, 1994 with effect from April 1, 1995 ; right to manufacture, produce or process any article or thing by the Finance Act, 1997 with effect from April 1, 1988 ; trademark or brand name associated with business by the Finance Act, 2001 with effect from April 1, 2002 ; and right to carry on any business by the Finance Act, 2002 with effect from April 1, 2003. 30 Therefore, even if the amendment is taken into consideration s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of permanent alternate accommodation to be provided by the Landlord in the proposed new building to be constructed on the said property, the Tenant hereby surrenders and relinquishes free from all encumbrances, all her right, title, interest and claim into or upon the said property known as Palm Beach Property more particularly described in the Schedule hereunder written and delineated on the plan thereof hereto annexed arid marked as Annexure A and thereon shown surrounded by green coloured boundary line as tenant or otherwise in favour of the Landlord against receipt of the aforesaid compensation. 10 In view of the above discussion and in the facts and circumstances of the case, we hold that consideration received by the assessee against surrender of tenancy right is assessable as capital gain and therefore, we do not find any substance or merit in the fresh grounds/plea raised by the assessee and the same is rejected 11 Ground no.4 is regarding addition of Rs.43,35,154/- in the capital gain. 12 The assessee has estimated the cost of acquisition of the tenancy right at Rs.10 lacs which was rejected by the Assessing Officer as the Assessing Officer adopted cost of tena ..... 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