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2014 (3) TMI 727 - AT - Income TaxScope of the Term capital asset u/s 2(14) of the Act – Deletion made on account of LTCG earned - Receipt of compensation on relinquishment of right to obtain conveyance of land - Whether the CIT(A) has erred in holding that the rights held by the assessee were not 'property' u/s.6(e) of the Transfer of Properties Act and not a 'capital asset' as defined under the 1961 – Held that:- The decision in Baroda Cement and Chemicals Ltd. vs. CIT [1985 (12) TMI 55 - GUJARAT High Court] followed - compensation received cannot be treated as consideration because 'right to sue' is not a property under section 6(e) of the Property Act and thus did not become a capital asset under section 2(14) of the Act - There is a divergent view of High Courts on the issue - The Bombay High Court and Madras High Court are against the assessee, whereas the Gujarat High Court, Delhi High Court are in favour of assessee - The law is well settled if there is two views are possible, the view which is in favour of assessee is to be adopted – The decision in Pradip J. Mehta v. CIT [2008 (4) TMI 6 - Supreme Court] followed - It is well-settled that when two interpretations are possible, then invariably, the court would adopt the interpretation which is in favour of the taxpayer and against the Revenue - the order of the CIT(A) upheld – Decided against Revenue.
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