TMI Blog2011 (5) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the transfer of the rights - Held that it should come under the head 'income from other sources' being rent received from this land - the ownership of that property would always remain with the assessee - Thus held that receipt cannot be treated as rent , because for receiving a rent, there has to be a relationship of 'landlord' and 'tenant' - it being intangible asset having no cost, cannot be taxed - it does not even come under residue clause provided in section 56(1) Keeping in view the case CIT v. Sandu Bros. Chembur (P.) Ltd. [2005 -TMI - 6153 - SUPREME Court] - Appeal of revenue dismissed. - ITA No. 1496 (Mad.) of 2010 - - - Dated:- 20-5-2011 - Hari Om Maratha, and N.S. Saini, JJ. Appearances: R. Srinivas for the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the net amount of Rs. 24,82,500/- was credited to the land account. The assessee treated the said sum as capital receipt and mentioned this fact in the return as under: "Note No. 5 : During the year, the assessee received a sum of Rs. 24,82,500/- [net of expenses] from M/s Paranjape Scheme Constructions Ltd., for providing easement right in private road situated on the eastern side of the land at Survey No. 143/1A of Pattanduru Agrahara Village, Krishnarajapuram Hubli, Bangalore East Taluk, Bangalore District and the same is credited to the land account as the receipt is in the nature of capital receipt." 3. The Assessing Officer issued notice to the assessee u/s 143(2) of the Income-tax Act, 1961 [the Act] proposing to treat the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d ought to have been confirmed by the Commissioner of Income-tax [Appeals] as income under the head 'income from other sources' being rent received from this land. In fact, a piquant situation has arisen in this case. M/s Paranjape Scheme Constructions Ltd. did not have egress or ingress to its property and that is why it encroached upon the property of the assessee. For that matter, the assessee was compelled to file civil suit to stop this company from trespassing upon his land. As per the court decree, resulted into by way of compromise between the parties, 'a right to easement' was granted to the company for which the assessee received Rs. 25 lakhs. As per this agreement, which we have gone through, the ownership of that property would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer and after discussing all aspects, he has finally gone with the claim of the assessee. We are also of the same view. This receipt cannot be treated as rent by any stretch of imagination, because for receiving a rent, there has to be a relationship of 'landlord' and 'tenant', between the parties. In this case, nobody is landlord and tenant. Assessee is not a landlord, rather, he is the owner of the property. Company is not tenant but is granted only a easement right and can use this piece of land for good without hindrance from assessee's side. There is no transfer of property, neither the company is a tenant, receipt has been gained by assessee by virtue of use of this property as per court decree by way of easement right. This ..... X X X X Extracts X X X X X X X X Extracts X X X X
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