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2016 (3) TMI 243 - AT - Income TaxTransfer of tenancy rights to long term capital gains - deduction under section. 54EC to the extent of investment of the capital gain - Held that:- Taking into account the factual matrix and circumstances of the case on hand and the legal position on this issue espoused in section 2(14) and 2(47) of the Act and the ratio of the judicial pronouncements on the issue of grant of tenancy rights similar to the facts of the case on hand, inter-alia, laid down by the Hon’ble Apex Court in Parbani Tea Company (1965 (4) TMI 19 - SUPREME Court ), and R.K.Palshikar (HUF) (1988 (5) TMI 3 - SUPREME Court ) and Ratilal Tarachand Mehta(1976 (11) TMI 37 - BOMBAY High Court ) we concur with and uphold the finding of the CIT(Appeals) that the grant of tenancy rights by the assessee trust and the premium of ₹ 51.00 lakhs received in lieu thereof from the tenants is a capital asset in the hands of the assessee and is therefore liable for capital gains and is not advance rent exigible to tax under the head income from house property. Reopening of assessment - investment in NABARD for acquiring Bonds/Debentures - Held that:- Assessing Officer did not make any addition to the assessee’s income in respect of the investment of ₹ 25.00 lakhs made by it in NABARD Bonds/Debentures; which formed the sole basis of the Assessing Officer’s recorded reason to believe income had escaped assessment for initiation of proceedings u/s.147 of the Act (supra). In these circumstances, the Hon’ble Bombay High Court in the case of Jet Airways (I) Ltd. (2010 (4) TMI 431 - HIGH COURT OF BOMBAY ) has held that when no addition is made in respect of such income which formed the basis for the recorded reasons for belief of income escaping assessment, the Assessing Officer cannot make any other addition to the assessee’s income in respect of any other income which has escaped assessment. Since the Assessing Officer ostensibly accepted the assessee’s claims regarding the investment of ₹ 25.00 lakhs in investment in NABARD Bonds/Debentures and no addition has been made in this regard, the Assessing Officer ought to have dropped the re-assessment/ assessment proceedings initiated u/s. 147/148 of the Act for assessment year 2005-06. - Decided in favour of assessee
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