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2015 (6) TMI 768 - HC - Income TaxCompensation for surrender the tenancy right - Whether the assessee has not termed as tenant as per the Maharashtra rent control act? - whether amount received by assessee on account of transfer of capital assets occupied by assessee within the meaning of "capital gain" even otherwise the deed of surrender of tenancy stated that it is a compensation in connection with loss of business, profit and convenience and hardship due to shifting elsewhere? - Held that:- It is an undisputed position that the Respondent Assessee is in occupation of the subject premises consequent to Agreement dated 13th June, 1972 i.e. prior to 1st February, 1973. The impugned order on the basis of the clear provisions found in Section 2(11) and 15A of the Rent Control Act concludes that the Respondent Assessee is a deemed tenant of the subject premises. In fact, Section 15A of the Rent Control Act, inter alia, provides that notwithstanding anything to the contrary in any contract, where a person is in occupation of the premises on 1st February, 1973, he shall be deemed to have become the tenant of the landlord in respect of the premises or part thereof, in his occupation. Thus, it follows that if the owner of the subject premises were to seek eviction of the Respondent Assessee on the basis of the contract, it would fail in view of the clear position in to Section 15A of the Rent Control Act. Thus, the Respondent Assessee is a deemed tenant of the subject premises. Consequently, such tenancy being property would be a capital asset and amounts received on surrender of it would be capital receipts chargeable to tax under the head 'Capital gains.' The issue of tenancy being a capital asset is no longer res integra as the Apex Court in CIT v/s. D. P. Sandu Bros. Chembur [2005 (1) TMI 13 - SUPREME Court] has upheld the view of this Court in Union of India v/s. Cadell Weaving Mill Co. [2001 (2) TMI 105 - BOMBAY High Court ] wherein it has been held that tenancy right was a capital asset and surrender of the same was a transfer of a capital asset. - Decided against revenue.
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