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2019 (11) TMI 797 - AT - Income TaxCompensation received for loss on account of non-exercise of commercial exploitation/ development rights on account of 99 years lease to run the company - revenue or capital receipt - HELD THAT:- Admittedly, in the present case property was sold to the same party who was enjoying the property as lessee on long term lease of 99 years and the property was sold for a consideration not below the guideline value prescribed for stamp duty purpose. Provisions of Section 50C of the Act have no application. It is settled proposition of law that there cannot be any presumption of receipt of consideration over and above apparent consideration stated in registered sale deed. What is apparent should be believed to be real in the absence of any material to contrary on record. Apparently, the compensation was paid towards termination of long term lessee, in terms of MOU entered between parties on 29.03.2012. The Assessing Officer doubted the genuineness of the term of MOU. He should have examined the other parties to find out the purpose of the impugned payment, which the Assessing Officer had chosen not to do so. Therefore the MOU has to be believed and the amount received should be held to be compensation towards termination of long term lease. Then the question boils down to whatever compensation received on account of termination of long term lease of 99 years can be treated as revenue receipts and liable to tax. Any compensation received towards loss of source of income cannot be treated as Revenue receipts but capital receipts which is not liable to be taxed. - Decided in favour of assessee.
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