9911796707
TMI Blog2012 (12) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... owing effective grounds in this appeal: 1. The Ld. Commissioner of Income Tax (Appeals) [hereinafter referred to as "CIT(A)"J has erred in confirming the action of the Assessing Officer in determining the total income of the appellant at Rs. 49,24,380/- without appreciating the facts and circumstances of the case. 2 The Ld. CIT(A) failed to appreciate that the amount of Rs. 1,40,00,000/- received by the appellant is capital receipt hence the same is not eligible to taxation. 3 The Ld. CIT(A) failed to appreciate that the amount of Rs. 1,40,00,000/- is a capital receipt as same is a compensation. Hence the same is not taxable as Long Term Capital Gain also. 4. Without prejudice to the above Ld. CIT(A) erred in confirming the Assessing Officer action to modify the computation of capital gains adopted by the appellant. Hence the addition of Rs. 43,35,154 is not at all justified and the same may be deleted. 5. The Ld.CIT(A) erred in confirming the disallowance of 1,01,962/- being 25% of the expenses incurred towards the conducting the activity of nursery school. The disallowance of Rs. 1,01,0962/- is not at all justified and same may be deleted. 6. The Appellant denies any liabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied upon the decision of the Hon'ble Delhi High Court in the case of Commissioner of Income-tax v. Bharat General Reinsurance Co. Ltd. reported in 81 ITR 303 and submitted that offering the income in the return of income would not operate as estoppel against challenging the validity of taxing the said income is exempt as per the provisions of the Act. 7.3 The ld AR has then referred the various decisions of the Hon'ble jurisdictional High Court in matrimonial disputes being the suit filed by the assessee as well as the assessee's husband in which certain injunction orders were passed by the High Court and thereafter, as per the consent of the parties, the disputes were compromised and settled. Thus, the ld AR has submitted that the assessee has surrendered her right in the matrimonial home, which was protected by the High Court by the interim order as well as confirmation of injunction order. The ld AR has referred the deed of surrender of tenancy dated 29.10.2005 and submitted that the assessee, being the wife of the previous owner of the property in question, surrendered the tenancy rights in favour of the builder/developer against compensation of Rs.1.40 crores. 7.4 As per th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rights of the assessee and the additional evidence is only the order of the Hon'ble High Court. 8 We have considered the rival contentions as well as the relevant material on records including the additional evidence filed by the assessee. Though, the issue of taxability of the receipt has been raised for the first time by the assessee before us, however, since the issue goes to the root of the matter and can be decided on the undisputed fact. Therefore, in view of the decision of the Hon'ble Supreme Court in the case of NTPC (supra), we admit the additional issue/plea raised by the assessee in the ground nos 2 & 3 for adjudication. The additional evidence filed by the assessee is only copies of notice of motion of Hon'ble jurisdictional High Court in the respective suits filed by the assessee and her husband, interim order, conformity order and consent terms order in the suits and the respective appeals filed by the parties before the High Court. Therefore, this additional evidence does not require any investigation at the level of the Assessing Officer ; but the same is relevant material to understand the dispute between the assessee and her husband and the terms of compromi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded for removal of; i) Newly erected four concrete walls, padlocks/locks on the front entrance door and the newly fixed iron framed grill door; (ii) Restrained from any manner directly or indirectly interfering with or obstructing the plaintiff and her daughter's use and occupation of the property in question including the first floor and the entire ground floor compound, lawn and the garden; iii) Restrained directly or indirectly transferring, selling, disposing of, alienating, creating third party rights, altering or dealing with in any manner whatsoever with the property in question etc. 9.3 Against the said interim order, the husband of the assessee filed an appeal no.713/2000 which was disposed vide order dated 5.10.2000 whereby the Hon'ble divisional Bench of the High Court modified the interim order passed by the Single Judge in Suit No.2959/2000 filed by the assessee resulting some stringent conditions were relaxed with respect to the liberty given to the husband to negotiate with third party for development of the property. However, the development, transfer or creating any third party right was allowed only with express permission of the High Court. Subsequently, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admitted the assessee as a tenant in the property in question for a rent of Rs.100/- per month during her life time. This right of the assessee was also continued in the new building and for equallant area to be constructed by the developer. 9.6 It is evident that the tenancy right of the assessee against the developer were created only by virtue of minutes of order dated 5.5.2005 and subsequent order of dated 6.5.2005. Even otherwise, the assesse's right to occupy and possession of the matrimonial house was culminated and transferred into tenancy right against the developer in the existing property and thereafter in the new developed property. 9.7 From the facts of the case as well as from the relevant material as produced by the assessee as additional evidence, it is clear that whatever the right the assessee has finally surrendered vide agreement dt 29.10.2005 is tenancy right of the assessee in the property in question and not any other right than the tenancy right as claimed by the assessee in the fresh/additional issue raised before us. 10 The decision of the Hon'ble Gujart High Court in the case of Manoharsinhji P Jadeja (supra) would not help the case of the assessee bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid section from time to time has roped in only specified assets as noted hereinbefore. In the circumstances, the amendment instead of working to the advantage of the Revenue goes to indicate that the Legislature does not want to bring within the purview of the tax net all assets (except the specified assets) which do not have cost of acquisition and the entire sale consideration cannot be treated as profits and gains chargeable under the head "Capital gains" by adopting the cost of acquisition as nil." 10.1 It is to be noted that in the case in hand, what has been transferred by the assessee is the tenancy right which is very much part of the capital asset as envisaged in sub.se 2(a) of sec. 55 as under: "55(2)(a): In relation to a capital asset, being goodwill of a business or a trade mark or brand name associated with a business or a right to manufacture, produce or process any article or thing or right to carry on any business, tenancy rights, stage carriage permits or loom hours: i) in the case of acquisition of such asst by the assessee by purchase from a previous owner, means the amount of the purchase price; and ii) in any other case not being a case falling under sub c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 & 3; accordingly, the same dismissed. 13 Ground no.5 is regarding disallowance of Rs. 1,01,962/- on account of expenses incurred for conducting the activity of nursery school. 13.1 We have heard the ld AR as well as ld DR and considered the relevant material on record. The assessee claimed total expenses of Rs. 4,07,846/- for running a nursery school. The Assessing Officer disallowed 25% of the expenditure amounting to Rs.1,01,962 for want of evidence to prove the same. 13. 2 On appeal, the Commissioner of Income Tax(Appeals) confirmed the addition made by the Assessing Officer because the assessee did not produce any evidence in support of its claim. The relevant part of the order of the Commissioner of Income Tax (Appeals) in para 4.1 & 4.2 are as under; 4.1. In this regard, the Ld. A.R. of the appellant has stated in the ground of appeal itself that the appellant had to leave Mumbai on 29th August, 2008 and had to stay with her daughter to look after her. Thereafter, she shifted her residence and books were not traceable. 4.2. This clearly establishes the fact that the appellant had no evidence to prove the expenses claimed. Under the circumstances, the A.O. was left wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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