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2010 (9) TMI 825 - AT - Income TaxQuestion of taxability of income - CIT(A) dismissed the appeal on the ground that the appeal is not maintainable inasmuch as the assessee has, on his own, offered the income to tax - held that:- As held by the high court in Balmukund Acharya v. Dy. CIT (2008 -TMI - 32901 - BOMBAY HIGH COURT) merely because an assessee had offered something to tax, AO could not have declined to exercise his powers to give relief to the assessee by not taxing the same. It is in this perspective that the CIT(A) ought to have decided the appeal on merits, and the CIT(A) could not have rejected the same in limine. Order of the CIT(A) - held that:- The question that the CIT(A) ought to have adjudicated was whether the AO, in the course of exercise of his powers under s. 143(1)(a), could have held that the capital gains on sale of property ought not to have been included in the income liable to be taxed for that assessment year. The CIT(A) completely overlooked the limitations placed on the AO under s. 143(1)(a) and proceeded to decide the matter as if the AO had arrived at his impugned conclusion in a regular scrutiny assessment. The CIT(A) took a wrong path, though, for the reasons we will now set out, he reached the right conclusion anyway. Surrender of tenancy right - Taxability under the head capital gain where cost of acquisition is NIL - held that:- merely because an asset does not have a cost of acquisition, this fact per se cannot lead to the conclusion that the sale of such an asset will not lead to capital gains liable to be taxed. Capital gains on sale of premises - premises which was sold by the assessee had not cost the appellant anything in terms of money - Held that:- cost of acquisition may be 'nil' on the facts of a case but yet the cost of acquisition may have been incurred (such as by surrender of tenancy rights on the facts of this case) and it may be capable of being determined (market value of premises at the point of time when tenancy rights were surrendered), gains on sale of property, received on surrendering the tenancy rights, were taxable as capital gains in the hands of the assessee. The claim made by the assessee is ill conceived and devoid of any merits. We, therefore, approve the conclusions arrived at by the learned CIT(A) and decline to interfere in the matter, appeal is dismissed.
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