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2012 (9) TMI 608 - AT - Income TaxRelinquishment of tenancy rights - Income from other sources or Capital gains - non-allowance of relief u/s 54EC - assessee, partner in a firm called George Nainan & Co., surrendered his tenancy right on the property to the other partner of the firm - owners of the property had originally let out the property in to Mr. T who surrendered his tenancy rights on 10.10.82 and the landlord had entered into an agreement with George John and Shri Sunny Nainon on 3.10.1982 for the tenancy - Though the occupation of the premises was spilt between the partners namely Shri George John and Shri Sunny Nainon, the tenant of the property was in fact the firm and not the individual partners - Revenue contended that assessee was not the tenant and, therefore, there arises no question of relinquishment of tenancy right to other partner Held that:- Though in the lease deed, the lessee is Shri George Nainon and Co., it is in fact the partners who are occupying the premises individually. It is also not in dispute that even after 1982, the property was not occupied jointly and severally but was occupied individually and separately. Thus, the advantage of common occupation and enjoyment is absent. It is also worth noting that it was not necessary to mention that the tenancy right over the property could not be separated without mutual consent had it been the right of the firm. Thus the intention of the parties to hold the right of tenancy over the respective portion of the property was clear from the clauses of the lease deed itself. Thus in line with the said clause, when the assessee relinquished his right, it has resulted in capital receipt and thus the assessee has rightly claimed it to be a capital receipt and is also eligible for deduction u/s 54EC of the Act for the amount invested in NABARD capital gains Bonds - Decided in favor of assessee
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