TMI Blog2011 (11) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... 05 (1) TMI 13 - SUPREME Court), it has been held that the cost of acquisition of tenancy was capable of ascertainment but the Revenue had taken a contrary stand that the cost of acquisition was incapable of being ascertained. This is also the case of the Revenue in the present case. Therefore, decided against the Revenue - INCOME TAX APPEAL NO. 45/2000 - - - Dated:- 9-11-2011 - MR. JUSTICE SANJIV KHANNA, MR. JUSTICE R.V.EASWAR, JJ. For Appellant: Mr. Kamal Sawhney, Sr. Standing Counsel. SANJIV KHANNA, J.: By order dated 16th February, 2001, the following question of law was framed: Whether the Tribunal was right in holding that Section 10(3) of Income Tax Act, 1961 was applicable and that the amount received for surre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax under Section 10(3) of the Act. The Assessing Officer distinguished the judgment of this Court in the case of Bawa Charan Singh versus CIT, (1984) 149 ITR 29, on the ground that it relates to taxation under the head capital gains and not taxability under Section 10(3) of the Act. The Assessing Officer did state or hold that the receipts were also taxable under the head capital gains . 4. On appeal filed by the assessee, the Commissioner of Income Tax (Appeals) (CIT(A), for short) held that ₹ 5,000/- was exempt and not taxable under Section 10(3) but the balance amount of ₹ 65,46,000/- was taxable as casual income under Section 10(3) of the Act. 5. The assessee succeeded before the tribunal, where it was held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd before the High Court was that the cost of acquisition of the tenancy was incapable of being ascertained. In view of the stand taken by the Department before the High Court, we uphold the decision of the High Court on this issue. 13. Were it not for the inability to compute the cost of acquisition under Section 48, there is, as we have said, no doubt that a monthly tenancy or leasehold right is a capital asset and that the amount received on its surrender was a capital receipt. But because we have held that Section 45 cannot be applied, it is not open to the Department to impose tax on such capital receipt by the assessee under any other section. This Court, as early as in 1957 had, in United Commercial Bank Ltd. v. CIT held that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e heads, it cannot be brought to tax under the residuary provisions of Section 56. 16. There is no dispute that a tenancy right is a capital asset the surrender of which would attract Section 45 so that the value received would be a capital receipt and assessable if at all only under Item (E) of Section 14. That being so, it cannot be treated as a casual or non-recurring receipt under Section 10(3) and be subjected to tax under Section 56. The argument of the appellant that even if the income cannot be chargeable under Section 45, because of the inapplicability of the computation provided under Section 48, it could still impose tax under the residuary head is thus unacceptable. If the income cannot be taxed under Section 45, it cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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