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2018 (4) TMI 700 - AT - Income TaxReceipt for relinquishment of right to sue the party - to be treated and taxed as business income OR capital receipts - Held that:- We are inclined to follow the findings of the Co-ordinate Bench in assessee’s own case for A.Y. 2009-10 [2018 (4) TMI 621 - ITAT AHMEDABAD] as held find no merit in the instant plea as the assessee has neither paid any consideration money nor carried out any development activity. It had merely obtained a licensee right to enter into possession into three parcels of land not creating any easement or interest therein as per Section 52 of the easement law. We further observe that the assessee developer could not have entered into full fledged possession in performance of the agreement in view of statutory bar u/s. 63 of the Bombay Tenancy and Agricultural Land Act, 1948 (applicable in Gujarat state). There is no material indicating the above lands being converted to non agricultural. The same sufficiently indicates that assessee’s license right existed on paper only. Hon’ble Bombay high court’s decision in Manoj B. Joshi’s case (2008 (7) TMI 1007 - BOMBAY HIGH COURT) holds that such an amount is not to be taxed as income u/s.2(24) of the Act. Assessee’s above development license acquired in its all three agreements does not amount to part performance requiring compulsory registration u/s.17 of the Registration Act. We therefore conclude in this view of all this evidence as well as legal position that the impugned compensation amount is not liable to be treated as income u/s.2(24) of the Act nor the same is taxable as capital gain for business income being in the nature of a capital receipt. - Decided against revenue
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