2010 (7) TMI 1004 - AT - Income Tax

Summary

Issues involved: Assessment of capital gains as income and the nature of the receipt.

Assessment of capital gains as income:
The appeal was filed by the assessee for the Assessment Year 2004-05, initially heard on 17.11.2009. The assessee had offered capital gains of Rs. 11,15,44,005 in the return of income. The Assessing Officer computed the income considering this declaration. The assessee contended before the CIT(A) that the amount should be treated as a capital receipt, not capital gains. The CIT(A) noted that the assessee voluntarily declared the amount as capital gains and claimed a loss in the computation of income. The Assessing Officer allowed this computation, leading to the dismissal of the assessee's ground. The assessee, aggrieved by this decision, appealed to the Tribunal.

Nature of the receipt:
The assessee's counsel referred to the Supreme Court's decision in Oberoi Hotel Pvt. Limited Vs. CIT (236 ITR 903), stating that compensation received for the loss of a source of income is a capital receipt. The Departmental Representative, however, supported the lower authorities' order and cited the Supreme Court's decision in Shelly Products & Another (261 ITR 367), emphasizing that filing a return of income amounts to an admission of tax liability. The Assessing Officer accepted the assessee's return and assessed the income accordingly. As there was no disagreement or disallowance by the Assessing Officer regarding the capital gains, the Tribunal found no basis for the assessee's grievance. The Tribunal held that the assessee's reliance on the Oberoi Hotel Pvt. Ltd. case would be relevant only if there was a grievance against the Assessing Officer's order, which was not the case. Consequently, the appeal of the Assessee was dismissed.