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2013 (9) TMI 690 - AT - Income TaxCapital gains or Income from other sources - transfer of sub tenancy rights, deemed tenancy rights - Held that:- the assessee has been referred to as licensor. From the agreement deed it is clear that the assessee had incidental right of the premises through which the looms were to be used. The said right of the assessee has been recognised from the date of agreement till surrender of the said right. Even the original tenant and the original owner did not dispute such right of the assessee over the property. Now, the case of the Revenue is that the agreement dated June 13, 1972 did not provide any right to the assessee of sub-tenancy of the premises but it was only with respect to looms and machinery and user of the premises was only incidental. But the fact remains that incidental right to use the premises was provided by the agreement itself. The fact also remains that assessee has been referred to as licensee in the said agreement. The provisions of section 5(11)(bb) and 15A of the Rent Control Act have already been reproduced above. By virtue of amendment in 1973, i.e., subsequent to the date of agreement of the assessee that the licensees who are deemed to be tenant under section 15A were to be considered as tenant. Therefore, in any case, the assessee had acquired the status of tenant of the landlord. As per the provisions of section 55(2) tenancy right has been considered to be capital asset. Moreover, the definition of capital asset as per section 2(14) of the Act is wide enough to cover "property of any kind" and the type of right acquired by the assessee in the property used by it cannot in any manner be said to be less than "any kind of property" held by the assessee - assessee, in fact, was enjoying possession of the impugned property and for peaceful vacation thereof it had received the impugned amount which was described by both parties as amount paid for surrender of tenancy rights. The assessee had acquired the said right long back and the licensor to the assessee also had recognised the said right of the assessee. The right of the assessee was undisputed and the nature thereof was "property of any kind" which was held by the assessee and was to be termed as a capital asset within the meaning of section 2(14) of the Act. Tenancy rights have also been recognized as capital asset within the meaning of section 55(2)(a) of the Act - Decided in favour of assessee.
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