TMI Blog2001 (6) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... ties, it is necessary to bring in briefly the facts relating to the receipt of Rs. 99 lakhs. The assessee was provided a lease of godown measuring 4945 sq.ft. that was located in Sunmill Compound, Lower Parel, Bombay. The lease was so given by Mr. Francis Theodore D'Souza and Mr. Mahadeo Soma Tamboskar, who were partners in M/s. Crema Industries. The lessors in the instant case were lessees of the owner of the property, New Sunmill Co. Pvt. Ltd. The lessees of the owner of the property by means of an agreement dated 24th September, 1971 had leased out as a second lease in favour of the assessee. The lessees Mr. Francis Theodore D'Souza and Mahadeo Soma Tamboskar got their lease renewed for a period of 99 years on 27-1-1988. The second lessee, apparently the assessee, requested permission of the first lessee by means of letter dated 22nd January, 1993 to permit them to sublet a portion of the godown to the third lessee in the series. The first lessee accordingly on 29th January agreed to subletting by the second lessee, Le. the assessee. The assessee accordingly entered into a sub-lease with M/s. Turel Sales Corporation on 18th June, 1993 giving 3000 sq.ft. of the godown area for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31-3-94 Turel Garments 20,00,000 92/0250 4709 31-3-94 597658 31-3-94 Turel Garments 20,00,000 BBC/02 6-7-94 DA022853 6-7-94 Turel Sales 5,00,000 17 Corpn. BBC/02 6-7-94 DD083363 6-7-94 Turel Sales 4,00,000 19 Corpn. ---------- 99,00,000 -------------------------------------------------------------------------------- On 6th January, 1997 the first lessee called himself as the assignor, the assessee as the confirming party and third tenant in the series calling assignee. This has reference to the arrangement between the first tenant and the assessee dated 4th January, 1994 for the purpose of payment of compensation of Rs. 99 lakhs in lieu of alternative accommodation, the third tenant being allowed to continue as a tenant and paying rent to the first lessee. Clause (i) of the said agreement reads as under: 'By an agreement dated 19th July, 1994 the Assignor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, fences, trees, drains, ways, paths, passages, commons, gullies, wells, waters, water-course, lights, liberties privileges easements and appurtenances whatsoever to the said premises or any part thereof belonging or in anywise appertaining or usually held or occupied therewith or reputed to belong or be appurtenant thereto and all the estate, right, title, interest property, claim and demand whatsoever at law and in equity of them the assignor and Confirming Party of in and to the said premises or any part thereof to hold the said land hereditaments and premises hereby assigned unto the Assignees in perpetuity subject to the payment of ground rent of Rs. 500 reserved by the said Indenture of Lease dated the 27th January, 1988 and to the performance and observance of the covenants and stipulations therein contained and on the Lessee's part to be observed and performed and henceforth on the part of the Assignees ought to be observed and performed and also subject to the tenancy and occupancy rights of Turel Sales Corporation and also subject to the payment of rates, taxes, water charges, cess and other outgoings in respect of the said land, hereditaments and premises more particul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he first lessee would be in a position to assign his rights etc. in favour of the third tenant. The assessee who agreed to co-operate for allowing the transfer of rights etc. by the first lessee to the third tenant was compensated for such agreement for which the consideration amount is Rs. 99 lakhs. The assessee, as observed above, co-operated with the first lessee and it is on that basis the assessee was made confirming party so that there could be smooth transition in the assignment of the right, title, etc. in the said land in favour of the third tenant. The issue, therefore, is one of assignment of interest in favour of another, though it has been stated as surrender of tenancy rights. As observed earlier, in order to enable the first lessee to assign his interest in favour of the third tenant, the third tenant had to necessarily compensate the assessee to the extent of his interest in the tenancy and further compensate the first lessee for assigning his remaining interest. It is, therefore, one of assignment of right, title, interest, etc., in the property in favour of the third tenant. The word 'assignment" we referred to earlier means to give and when such action of giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses, could not be anything but a transfer of rights of tenancy in favour of another. The surrender of tenancy invariably has to be with the owner. That is not the case in the present appeal. The various case laws that had been cited before us and the decision of the Bombay High Court in Cadell Wvg. Mill Co. (P.) Ltd. v. CIT [2001] 249 ITR 265 would not have any relevance whatsoever because all those cases were with reference to surrender of tenancy rights. In the instant case it was a case of assignment of tenancy right in favour of one other tenant who got substituted in place of the second and the third tenant. 8. No doubt the CIT has proceeded by placing reliance on the decision of the Special Bench of the Tribunal in Cadell Wvg. Mill Co. (P.) Ltd. v. Asstt. CIT [1996] 217 ITR 51 (Bom.) which on a reference to the Bombay High Court got reversed. The CIT by placing reliance on the said decision of the Special Bench has directed to assess Rs. 99 lakhs as income of the assessee. A Special Bench of the Tribunal had held that the surrender of tenancy rights could be brought to tax as a casual or non-recurring income. This the Bombay High Court has reversed. 9. As observed earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X
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